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RESEARCH
INDIA REAL ESTATE
INDIA REAL ESTATE
RESIDENTIAL AND OFFICE
JULY - DECEMBER 2017
AHMEDABAD | BENGALURU | CHENNAI | HYDERABAD | KOLKATA | MUMBAI | NCR | PUNE
1
INDIA REAL ESTATE
Connecting
TABLE OF CONTENTS
ALL INDIA 12
People AHMEDABAD
BENGALURU
24
44
& Property,
CHENNAI 60
HYDERABAD 76
Perfectly.
KOLKATA 92
MUMBAI 102
NCR 120
PUNE 138
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RESEARCH INDIA REAL ESTATE
FOREWORD
Nearly half a decade from now would Nevertheless the near standstill triggered future new business districts are taking overseas home in India has been largely endorsement of the structural resilience in
perhaps be a good time to review the by demonetisation seems to have tapered shape across peripheral markets in big driven by fascination for exotic locations or our macro-economic architecture.
new wave of transformation that set with time. Stakeholders also appear metros. The steady expansion of new age perhaps as a safe shelter for our children
into India’s real estate sector in 2017. to be growing in confidence with the businesses such as co-working space studying aboard. But today resident The overall resurrection of the real estate
At a glance the year was probably one gradual acceptance of structural reforms providers is also one of the defining stories Indians investing in residential properties sector would depend upon the long –term
packed with uncertainty, volatility and such as the Real Estate (Regulation and of 2017. overseas are mostly doing so as sound impacts and benefits of the structural
long-term promise of new opportunities. Development) Act, 2016. The Industry investments. reforms brought into the sector over the
While a battery of reforms tested industry however, is still grappling to navigate its Going forward the government’s emphasis past 12-odd months.
stakeholders, the new paradigm of way through the new tax regime post the on housing and its efforts to mitigate risks We are also looking forward to the Union
transparency and consolidation achieved introduction of the Goods and Services though structural reforms is gradually Budget 2018-19 with respect to the Real
SHISHIR BAIJAL
CHAIRMAN AND MANAGING DIRECTOR in the process should pave the way for a Act. building confidence in consumers and big Estate Investments Trusts (REITs). It is time
healthy momentum in attracting buoyant market stakeholders such as institutional we cut down the long term capital gains
global capital in the near future. However, select markets wherein RERA funds. holding period for REITs from three years
has matured have witnessed developers to one year.
At the end of 2017, India’s residential sector re-launch projects at attractive prices A large number of these investors and
appears to have shrunk to a fraction of which led to an uptick in sales volumes in funds have made changes to the portfolio This would bring the investment
its size in less than a decade. Eight cities 2017. The strategic switch in developers’ allocation strategy allowing investment opportunity at a similar level with equity
covered in the report collectively saw approach has led to a price reduction is exposure to the Indian real estate. The investments. We strongly believe that the
just over 100,000 new residential units most markets. pension and private equity funds are much anticipated move is the missing
enter the market. Similarly, sales volumes investing in commercial assets (office part of the jigsaw puzzle that could have
were restricted to 228,000 units, again a Meanwhile the office leasing market spaces and malls) and also in under- undermined India’s REITs story.
fragment of its scale in the recent past. maintained its strong fundamentals construction residential properties.
although expansion concern for the Meanwhile, the Moody’s upgrade for
While the market has been on a steady
turbulence-hit technology sector is still There is also an uptick in capital India after 13-long-years has comes as
decline, the past 12-odd months were an
prevalent. While the struggle for new office movements aboard in form of overseas bright spark amid widespread cynicism
acid test of sorts for the real estate sector
blocks appears to be unceasing in the near residences. Traditionally, the desire for an about the economy. The recognition is an
in India.
4
5
RESEARCH INDIA REAL ESTATE
interest. Most importantly, it was aimed However, West Bengal has not enacted the been tracked as per four crucial stages
to allow a grievance resolution platform to RERA Act as on 30 November 2017. After as below, each of which has an equal
homebuyers. While consumers heaved a notification of rules, the immediate next weightage:
sigh of relief momentarily, on the ground step was the constitution of a “permanent”
realities are very different. Maharashtra real estate regulatory authority for a
is the only state that notified the real smooth transition. But this process is still
estate rules timely and subsequently underway across majority of states. Due
implemented it statewide by 1 May 2017. to challenges to create a large, web-based
Thereafter, in a bid to implement RERA at interface comprising state-level project
the eleventh hour, hasty notification of real information, the priority shifted to putting
estate regulations by many states came a registration mechanism for promoters
RERA IMPLEMENTATION SCORE
under the scanner for perceived dilution and agents first. As of 30 November 2017,
(Maximum score: 4)
of central guidelines. Delayed notification 60% of Indian cities under our review had
of real estate rules put consumers in started registration of real estate projects
a dilemma regarding ascertaining the through online mode. The Maharashtra
Total score
City name
eligibility of projects under RERA. A major government’s proactive establishment of
Stage IV
Stage III
Stage II
Stage I
bone of contention is the interpretation a real estate authority and an online portal
of the term “ongoing project” by some has put Mumbai and Pune far ahead of
states, which provide many relaxations other cities in terms of RERA compliance.
Ahmedabad 1 1 1 0 3
to builders. Consequently, homebuyers Recently, Maharashtra also designated
in states like Karnataka, Haryana, Tamil the Maharashtra Revenue Tribunal to be
Bengaluru* 1 1 1 1 4
Nadu, Telangana and Uttar Pradesh are the Appellate Tribunal to hear appeals
disappointed as a vast proportion of under- against the rulings of MahaRERA. While Chennai 1 1 1 0 3
construction projects will now not come the Karnataka government concurrently
within the purview of the Act. announced the establishment of both Delhi 1 1 0 0 2
the Interim Real Estate Authority and the
Interim Appellate Tribunal, the availability of Gurugram** 1 1 0 0 2
TIME TO PULL UP THE SOCKS detailed project level information still needs
work. NCR (comprising Delhi, Gurugram Hyderabad*** 1 1 0 0 2
It has been more than a year and a half
RERA:
and Noida) is the worst hit, as all the three
since RERA was envisaged for nationwide
state governments (Delhi, Haryana and Kolkata# 0 0 0 0 0
implementation. Initially, the following
Uttar Pradesh) have a low adoption rate of
timelines were prescribed by the Centre. Mumbai## 1 1 1 1 4
RERA across various parameters. Hence,
Notification of the Act at the respective most of the states will take further time
state latest by 31 October 2016 was the Noida 1 1 1 0 3
for a well-ordered RERA implementation.
REALITY OF REFORMS
first step towards setting up the machinery. In the absence of a permanent real estate
Pune## 1 1 1 1 4
regulator and appellate tribunal, the
efficacy with which consumer disputes can
-By Divya Grover be resolved remains a big question mark.
30 April 2017
CITY WISE PROGRESS STAGE I :
IS CONSUMER THE KING? Establishment of Appellate
Tribunal, latest by Except for West Bengal, most states have Real Estate Rules Notified
Due to the unregulated nature of India’s real estate sector, fundamental problems
Delayed associated with dispute resolution and delayed project deliveries had long skewed
notified the real estate regulations by now. STAGE II :
30 April 2017 This in itself was a long-winded process.
notification of real the balance in favour of supply-side stakeholders. Growing consumer agitation on
Establishment of the As a result, it prolonged the enforcement Establishment of Real Estate Regulatory
social media, increasing complaints against builders and outreach to quasi-judicial
estate rules put commissions forced the government to sit up and take notice of the aggrieved
Regulatory Authority, latest by of real estate reforms and delayed the Authority
recovery cycle in major Indian cities. As
consumers in a homebuyers’ plight. With this objective to safeguard consumers’ interests, the
31 October 2016 per the data available on the website of
STAGE III :
Government of India enforced the Real Estate (Regulation and Development) Act,
dilemma regarding 2016 nationwide on 1 May 2017. Date within which the Real the Ministry of Housing and Urban Poverty Functional Portal
Estate Rules had to be notified Alleviation (MHUPA), as of 30 November STAGE IV :
ascertaining For a sector that did not have any regulatory structure governing the behaviour by the state government 2017 only Maharashtra, Madhya Pradesh
Establishment of Real Estate Appellate
the eligibility of of its participants, this historic move was heralded as an inflection point that
26 March 2016
and Punjab have established a permanent
will change the manner in which real estate is transacted in India. Provisions Tribunal
Real Estate Regulatory Authority, while 15
projects under such as mandatory disclosures by promoters were targeted to weed out fly- The Real Estate (Regulation and others only have interim authorities. Since
Development) Act, 2016
RERA. by-night operators and bring financial discipline, which will spike investors’
published in the Official Gazette
different states are at a different stage in
after Presidential Assent RERA compliance, city wise progress has
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RESEARCH INDIA REAL ESTATE
STRENGTHENING REGULATOR real estate regulatory portals are of little use
PORTALS THE NEED OF THE HOUR in their current form. They require a massive
RERA IMPLEMENTATION SCORE (Maximum score: 4) upgrade in terms of: There is an
Technology is an enabler to RERA
compliance. Though access to registered a) addition of all registered projects to their
acute need to
implemented unimplemented
real estate agents on the regulators’ portal online repositories create a user-
has eased a lot of confusion about who is
authorised to sell real estate, most cities are b) addition of more data points to enhance
oriented technical
4
far behind in providing an end-to-end, web- transparency infrastructure that
based system for consumers despite having
functional portals. Lack of information on c) enhanced user interface on portals
can guide buyers
3 portals such as disclosure about registered that assist homebuyers and increase in due diligence
projects, promoter information, approvals, consumer experience
stage-wise completion updates and
and enable data-
ongoing litigation brings the consumers Central RERA stipulates that promoters driven decision
2 back to square one. These are requisite have to submit many documents for
information parameters for a consumer to registration. Data mining and analysis of the making.
assess project performance, which foster data hence collected must be available on
transparency in real estate data and instill the RERA website for consumers to assess
1 confidence. Maharashtra is the only state the developers’ past performance smoothly.
with detailed project level pages providing
relevant information such as number of PUBLIC VIEWING SCORECARD FOR
0 units along with carpet area, revised dates PROJECT-LEVEL PARAMETERS ON
of project completion, building wise break RERA PORTALS IN KEY CITIES
AHEMDABAD
BENGALURU*
CHENNAI
DELHI
GURUGRAM**
HYDERABAD***
KOLKATA#
PUNE##
NOIDA
MUMBAI##
up of configurations along with available
and sold units, copies of sanctioned Every state’s RERA portal prominently
building plans, amongst others. Consumers displays the RERA Registration Numbers
can search simply on the MahaRERA for each project. Based on the information
website by the developer’s name as well accessible for public viewing, we have
as RERA registration number to access developed a scorecard across the top cities
Source: Knight Frank Research, Ministry of Housing and Urban Poverty Alleviation
this information. While other state RERA taking into account pivotal information
websites do allow basic searchability, parameters regarding project-level data
Notes:
minute project level details are still not availability, promoter information and legal
*The Government of Karnataka has appointed Karnataka Appellate Tribunal as the Interim Appellate Tribunal
available in many states. There is an acute details and uploaded documents. If the
**Haryana is likely to set up the real estate regulatory authority by the end of this year. The Haryana government has been accepting registra-
need to create a user-oriented technical parameter information is available on the
tion applications offline, for now.
infrastructure that can guide buyers in due RERA website, it is scored as 1, indicating
***The Telangana government has notified the RERA rules and is in the process of setting up the authority.
diligence and enable data-driven decision transparency, else 0, indicative of non-
#West Bengal has drafted the West Bengal Housing Industry Regulation Act but it is yet to be notified.
making. For consumers used to accessing transparency as per the respective city.
##The Government of Maharashtra has recently designated the Maharashtra Revenue Tribunal to be the Appellate Tribunal to hear appeals
against MahaRERA. real estate information through third party
Both permanent and interim Real Estate Regulatory Authorities and Appellate Tribunals have been taken into account for progress. sources in the public domain, state level
8
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RESEARCH INDIA REAL ESTATE
RERA TRANSPARENCY SCORE (Maximum score: 15) Transparent Non-Transparent MOVING TOWARDS FULL Though things are falling into place, the
TRANSPARENCY IN REAL ESTATE pace of creating physical infrastructure
TRANSACTIONS like setting up regulator’s offices and For consumers used
City Ahmedabad Bengaluru Chennai Delhi Gurugram1 Hyderabad2 Kolkata3 Mumbai Noida Pune hiring officials can be quickened. All states
MahaRERA leads the country in terms of
to accessing real
need to invest heavily to create technically
dissemination of real estate information to superior and information-rich portals, which estate information
PROJECT-LEVEL INFORMATION
consumers as it is the first state in India to will serve as a primary source of real estate
adopt RERA. For other states, Maharashtra
through third party
information to all stakeholders. Until date,
Project name 1 1 1 NR NR NR NR 1 1 1
has evolved as a benchmark in gradual ambiguity remains as to when this exercise sources in the public
and seamless transition to the new order will be completed and the next one year
Project type 1 1 1 NR NR NR NR 1 1 1
of the day. One that is moving towards full
domain, state level
is crucial to the speedy implementation
Location 1 1 1 NR NR NR NR 1 1 1 transparency in real estate transactions. on all aspects. In the current scenario, real estate regulatory
In a span of less than 18 months, it has homebuyers will have to wait a little longer
completed the entire cycle of the RERA
portals are of little
Carpet area 1 1 1 NR NR NR NR 1 1 1 before rejoicing.
implementation process. However, for use in their current
No. of units 1 0 1 NR NR NR NR 1 0 1 several other states, which have failed to
keep pace in terms of RERA compliance,
form.
Configuration 1 0 1 NR NR NR NR 1 0 1 the newly formed (interim) authorities are
struggling to process the vast number
No. of booked units 0 0 1 NR NR NR NR 1 0 1 of applications received from real estate
developers and agents and instantly
Status 1 1 1 NR NR NR NR 1 1 1 generate RERA registration numbers. While
homebuyers in Hyderabad, Kolkata, Delhi
Completion date 1 0 1 NR NR NR NR 1 1 1
and Gurugram will have to wait longer
for accessing state level regulator data,
PROMOTER INFORMATION
those in Ahmedabad, Noida, Chennai and
Bengaluru will largely benefit once available
Promoter name 1 1 1 NR NR NR NR 1 1 1
information is supplemented with additional
Contact information 1 0 1 NR NR NR NR 1 1 1 data to provide a holistic project level
overview.
Past experience 0 0 1 NR NR NR NR 1 0 1
details
LEGAL DETAILS AND UPLOADED DOCUMENTS
Title report 0 0 0 NR NR NR NR 1 1 1
Encumbrances 0 0 0 NR NR NR NR 1 1 1
Project approvals 0 0 1 NR NR NR NR 1 1 1
TOTAL SCORE 10 6 13 NR NR NR NR 15 11 15
Source: Knight Frank Research, State RERA websites
Notes:
Scoring is done only based on the information available on the regulators’ websites as of 30 November 2017. They are subject to
change as different states update their RERA portals. Cities where documents may have been collected by authorities but not made
available on the regulator website have also suffered on the scoring.
States where RERA portals are not functional have been denoted as “Not Rated” (NR).
1Haryana is yet to set up the Real Estate Regulatory Authority’s portal.
2The Telangana government has notified the RERA rules and is in the process of setting up the authority.
3The West Bengal state assembly passed the West Bengal Housing Industry Regulation Bill 2017 in August 2017 but the website is yet
to go live.
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RESEARCH INDIA REAL ESTATE
INDIA MARKET SNAPSHOT
PARAMETER H2 2017 Change YoY 2016 2017 Change YoY
Launches (housing units) 40,832 -41% 1,75,822 1,03,570 -41%
Sales (housing units) 1,07,316 -2% 2,44,686 2,28,072 -7%
Unsold inventory (housing units) 5,28,494 -19% 6,52,996 5,28,494 -19%
Quarters to sell 11.2 - 11.3 11.2 -
Source: Knight Frank Research
• Deep in the grip of a market downturn, meltdown in market volumes can when seen in conjunction with the
the Indian residential market has be gauged from the fact that annual age of unsold inventory that has been
breached new lows in terms of supply supply levels in the Indian real estate progressively increasing across the 8
and sales for every successive year residential market are now just one major cities.
of this decade. Despite the massive fourth of those in 2015. The NCR is the
• Weighted average prices have fallen an
need for housing that India is facing, most affected market with its annual
average of 3% across cities with Pune
huge unsold inventories caused by supply volume at just 7% of its decadal
seeing the most decline at 7% YoY.
a prolonged focus of the developers high.
Even Mumbai residential prices have
on the wrong apartment ticket sizes
• While the de-growth in residential finally cracked and fallen 5% in 2017.
have brought the residential real estate
supply has been getting progressively Hyderabad and Ahmedabad saw prices
industry to its knees.
worse, that of demand has been move up 3% and 2% respectively
• Vast unsold inventory levels that relatively muted. Down 7% YoY, due to the high proportion of ready
peaked in 2014 at 0.72 Mn units approximately 0.23 Mn units were inventory in these markets and a more
forced developers to curtail supplies sold during 2017 compared to a little exacerbated supply crunch caused
INDIA
in a bid to lighten this inventory over 0.1 Mn units launched. Notably, by a 70% and 66% YoY fall in units
load. This course of action has seen Mumbai and Pune saw marginal growth launched during 2017 respectively.
reasonable success even in the in sales which can be attributed to the
• During the last four years, the growth
face of lacklustre demand as unsold 5% and 7% drop YoY in prices for 2017.
in residential prices in most of the top
inventory levels have fallen 24% since Also, the fact that Maharashtra is the
eight cities of India has been below
H2 2015. However, tumultuous events only state that has applied the RERA
RESIDENTIAL MARKET over the past 14 months that saw in letter and spirit has played a part in
retail inflation growth and the gap has
progressively increased since H1 2016.
the government aggressively push boosting consumer confidence.
This has in fact significantly improved
a culture of transparency through
• NCR and Mumbai saw sales numbers home affordability and average ticket
measures such as Demonetisation,
increase by 21% and 19% YoY sizes of housing units in most cities are
Goods and Services Tax (GST) and
respectively during H2 2017 but this now inching closer or are below the
the Real Estate (Regulation and
can be attributed to the extremely Knight Frank Affordability Benchmark
Development) Act, 2017 (RERA) have
While the de-growth in irrevocably altered the course of the
low sales during H2 2016 caused of 4.5 times the annual household
by the Demonetisation drive carried income of the city.
residential supply has been industry.
out by the government. The H2 2017
• The long awaited drop in prices is a
getting progressively worse, • Measures such as the RERA and the sales numbers of these cities are
healthy step toward market recovery
Pradhan Mantri Awas Yojana (PMAY) still significantly lower than previous
that of demand has been
-38% -78%
as this along with other measures such
that were expected to boost sentiments periods of H2 2015 and H2 2014 clearly
as reduction in unit sizes across cities
relatively muted. Down 7% of the home-buyer, have yet to make depicting an underlying declining trend.
will boost home-buyer affordability
any significant market impact on the
YoY, approximately 0.23 Mn buyer who has little incentive to buy
• The current QTS level stands marginally and eventually get buyers back to the
lower at 11.2 quarters at the end of market. The pace at which developers
units were sold during 2017 now as the unaffordably high prices
2017 compared to 11.3 quarters for the align themselves to the new regulatory
Decline in Sales in 2017, since the Decline in Launches in 2017, since the continue to weaken and fall.
compared to a little over 0.1 peak in 2011 peak in 2010
previous year; however this is more norms and launch new products in
• Clocking the largest percentage drop a function of the severe curtailment the right ticket sizes that appeal to the
Mn units launched in supply volumes during this decade, in housing units launched rather than homebuyer’s interests, will determine
2017 has definitely turned out to be a an uptick in sales and hence cannot the trajectory of the market going
seminal year for the Indian residential be interpreted as a sign of a healthy forward.
real estate market. The scale of the market. This is further substantiated
12
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INDIA REAL ESTATE
HOUSE PRICE TO INCOME RATIO
HOUSE PRICE TO INCOME RATIO
CITY 2010 2017
-70%
Mumbai 11.0 7.8
NCR 6.0 5.0
Bengaluru 5.6 4.4
Maximum YoY decline in Launches seen
in Hyderabad during 2017
Pune 4.6 3.4
Chennai 5.4 4.7
Hyderabad 5.7 5.0
Kolkata 5.7 3.5
Ahmedabad 4.3 3.5
Note: Knight Frank Affordability Benchmark is 4.5 times household income
Source: MOSPI, Knight Frank Research
CONSUMER PRICE INFLATION WELL ABOVE REAL ESTATE PRICE GROWTH
130
CPI
125
HYDERABAD
BENGALURU
120
MUMBAI
Index value (Q1 2013 = 100)
PUNE
115 AHMEDABAD
CHENNAI
110
KOLKATA
105
NCR
100
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
95
Note: November CPI used for Q4 2017
15
RESEARCH INDIA REAL ESTATE
RESIDENTIAL RESIDENTIAL
LAUNCHES AND SALES UNSOLD INVENTORY
LAUNCHES (IN UNITS) SALES (IN UNITS) UNSOLD INVENTORY (IN UNITS) QUARTERS TO SELL
% CHANGE (YOY)
AGE OF UNSOLD INVENTORY (IN QUARTERS)
AS ON 31 DEC 2017
6,926
-25%
H2 2017
20,465
21%
11,726
-56%
2017
37,653
-6%
-26%
Maximum YoY drop in Sales seen in Bengaluru
1,66,831
(-13%)
17.2
18.5
during 2017
NCR NCR
2,916 4,790 6,176 15,940
-44% -66% -32% -24%
26,884 7 39,252 12.1
H2 2017 2017 H2 2017 2017
(-29%) (5%)
7,800 15,741 6,038 14,147 10.3 12.1
5% -1% -17% -20%
AHMEDABAD KOLKATA AHMEDABAD KOLKATA
7,490 23,253
-23% -32%
4,800 12,705 1,15,964 7.6
H2 2017 2017
-58% -37% (-25%)
28,455 3.4
30,179 62,256 H2 2017 2017 15.6
19% 3% (-43%)
16,486 33,966 12.6
-2% 5%
MUMBAI MUMBAI
PUNE 940 3,511 PUNE
-84% -70%
H2 2017 2017 17,356 5
HYDERABAD HYDERABAD
6,342 14,243 (-38%)
-13% -8% 17.8
8,384 22,410
-37% -41%
H2 2017 2017
13,336 34,546 3,200 9,235 10.6
-34% -26% BENGALURU -33% -13% 1,09,112 BENGALURU
CHENNAI H2 2017 2017 CHENNAI 24,640 6.2
(-10%)
6,670 15,520 13.0 (-20%)
-14% -4% 14.2
All maps are for representational purpose not to scale
All maps are for representational purpose not to scale
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17
RESEARCH INDIA REAL ESTATE
RESIDENTIAL OFFICE MARKET
PRICING INDIA MARKET SNAPSHOT
WEIGHTED AVERAGE PRICE IN H2 2017 (INR/SQ.FT.)
PARAMETER H2 2017 Change YoY 2016 2017 Change YoY
12 MONTH CHANGE (YOY) 6 MONTH CHANGE (YOY)
New completions (mn sq ft) 12.5 13% 30.7 32.7 7%
Transactions (mn sq ft) 22.5 9% 41.6 41.7 0.1%
7.3%
Weighted Average Rental - - 68 72 3%
(INR/sq ft/month)
Stock (Mn sq ft) - - 599 631 5%
4,165
[-2%] [-2%] Maximum YoY decline in Prices seen in Pune in Vacancy (%) - - 13.5% 11.6% -
H2 2017
NCR Source: Knight Frank Research
• The Indian office space market has almost that of the IT/ITeS sector at 36%
been plagued by an abject lack of viable in the recently concluded period, on the SECTOR-WISE SPLIT OF
office space over the past four years back of increased take up by ecom- TRANSACTIONS
while demand has stayed dogged- merce and Co-working companies.
ly steady. This slide in office space
development has been arrested in 2017 • The Co-working phenomenon is
with supply growing by 7% in annual gathering speed in India and this can
2,820 3,395
[-5%] [-5%] terms with a much more pronounced be observed in the increasing quantum
[2%] [1.8%]
13% growth YoY during H2 2017. of space companies such as Coworks,
H2 2016
AHMEDABAD KOLKATA However, overall transactions continue Wework, Daftar India and Awfis which
to substantially exceed supply and this have been taking up space in Mumbai,
has pulled down the vacancy levels to Bengaluru, Pune and the NCR. Across
11.6% from 13.5% a year ago. the top 7 cities, such co-working space
7,717 providers have taken up around ap-
[-5%] [-4.1%] • Consistently falling since H1 2012, the proximately 1.3 Mn sqft of office space
4,508 vacancy level is at a decadal low. The during H2 2017, a significant growth
[-7%] [-7.3%]
abject lack of fresh office space is most over H2 2017.
MUMBAI 3,821
visible in the IT/ITeS sector dominat-
[3%] [3%]
PUNE ed markets of Bengaluru, Pune and • Rental growth has been strong across H2 2017
Hyderabad that currently have single markets with the exception of Mumbai
HYDERABAD digit vacancy levels at 3%, 6% and which experienced a 5% de-growth
5% respectively while Chennai stands due to increasing supply and vacancy
precariously poised at 10%. levels. Average rental values across the
4,589 seven cities grew at 3% YOY during H2
[-5%] [-5%] 4,525 • The IT/ITeS sector share in transactions 2017. While Mumbai saw flat YoY rental
[-3%] [-3.7%]
has increasingly been showing signs growth, Hyderabad and Bengaluru
BENGALURU of weakening in recent periods due to experienced the strongest rental growth H2 H2
CHENNAI Industry
macro headwinds in the form of a slow- at 8.5% and 9.2% YoY respectively. 2016 2017
down in spending as well as an inclina-
tion to insource by the USA and several BFSI 13% 14%
European countries. Losing ground
since H2 2016, it accounted for 37% of IT/ITeS 49% 37%
the transacted volume compared to the
49% in the previous period. Manufacturing 17% 14%
• The Other Services sector share has Other Services 21% 36%
jumped up from 21% in H2 2016 to Note: BFSI includes BFSI support services
All maps are for representational purpose not to scale
18
19RESEARCH INDIA REAL ESTATE
OFFICE OFFICE RENTAL
TRANSACTIONS WEIGHTED AVERAGE RENT IN H2 2017 (INR/SQ.FT./MONTH)
12 MONTH CHANGE 6 MONTH CHANGE
COMPLETIONS (MN SQ FT) TRANSACTIONS (MN SQ FT) % CHANGE (YOY)
2.3
-28%
H2 2017
3.2
-15%
4.1
-10%
2017
6.4
-12%
18%
YoY increase in Transactions in Pune during 2017
75
2.5%
0%
NCR NCR
0.7 2.9
-36% 75% -4.8%
H2 2017 2017 40
0.3 1.5 -
61% 54%
AHMEDABAD AHMEDABAD
2.8 10.4
-5%
115
190% 76%
H2 2017 2017
0.4 2.1
-71% -17%
-2% 5%
4.4
35%
7.5
6%
H2 2017 2017 63
2.7 4.5 3.3%
51% 18%
MUMBAI MUMBAI
PUNE 1.3 3.2 PUNE
8.5%
-48%
H2 2017
-46%
2017
51
HYDERABAD HYDERABAD 4.1%
3.3 5.7
4% -6%
9.2%
4.4
26%
8.1
-15%
63
H2 2017 2017
5%
0.8 1.8 4.5%
5.9 11.7 57
12% 3% BENGALURU 314% 243% BENGALURU
CHENNAI H2 2017 2017 CHENNAI 3.5%
2.6 4.5
-17% -12%
All maps are for representational purpose not to scale
All maps are for representational purpose not to scale
20
21RESEARCH INDIA REAL ESTATE
THE GIFT DREAM protests have been organized by the local While the sector took time to understand
population demanding to be included the policy measures introduced in 2017,
The Gujarat Finance Tec-City, more
in the automobile boom that the region and Ahmedabad was no different, most
commonly known as GIFT City, is India’s
is undergoing. This issue also made stakeholders in the city are of the view
first global financial services and IT hub
headlines during the campaigns in the that the future of the real estate sector
coming up near the Ahmedabad airport.
recently concluded Gujarat elections. The in Ahmedabad is going to be bright. The
This dream project coming up in the north
state has no doubt taken great strides in necessary systems and processes are
of Ahmedabad has run in trouble over
there in place and the fundamentals of
height of some of its buildings and may
the market are sound so there should be
need to trim down the height of some of
them. A study done by the International The hard work put no looking back. What makes the deal
sweet and attractive for Ahmedabad is that
Civil Aviation Organisation recommended
in by the state in compared to other urban markets it offers
heights ranging from 74 metres and 191
metres for 52 high rises in GIFT City this department is a plethora of real estate options and that
too at very competitive rates. As regards
against requests for heights from 68
evident from the the minor niggles that have cropped up, we
metres to 474 metres. A committee of
the aviation ministry has also approved fact that till the believe should get solved before they make
any serious dent on the flourishing real
the findings of this six-month study. The
end of November estate sector in the city.
need to trim down the height of some of
the buildings in GIFT City comes as curbs around 800 projects
on high rises need to be maintained near
and 300 real estate
airports in the interests of aviation safety.
We still await clarity on the matter and agents were
hope that this issue will get resolved soon,
registered with the
as it is one of the pet projects of Prime
Minister Narendra Modi. Scaling down the state authority.
size of GIFT City will however, dent the
image of this international financial hub
as was envisioned. If that happens then
attracting automobile giants to this stretch,
the real estate sector will have to bear the
it now needs to walk the extra mile to
brunt as not only within GIFT City but also
ensure that this niggle gets resolved before
in Ahmedabad. While the issue affecting
it gets out of control.
GIFT is a technical one, the flourishing real
estate sector in west Ahmedabad may start GEARED UP FOR RERA
feeling the heat for a very different reason.
For a state that is so efficiently managed,
SOCIAL UNREST we believe that the above-mentioned
ONLY A MINOR NIGGLE
issues should get settled soon. This
The automobile industry is one of the
efficient management has thrown up a
major drivers of real estate in Ahmedabad,
bright spark for the real estate sector,
especially in western part of the city.
in an otherwise dull period. Apart from
The Sanand-Viramgam-Hansalpur belt
-By Pankaj Anup Toppo Maharashtra and Madhya Pradesh, Gujarat
has emerged as a major auto hub in the
has been the front runner in putting in
western periphery of Ahmedabad. The
place systems and processes for the
drive through this automobile belt is dotted
5%
“The recent past has not been too generous towards Gujarat. The present moment and smooth implementation of the Real Estate
with dozens of companies manufacturing
the future is however, the time for Gujarat to move forward and Ahmedabad will lead that (Regulation and Development) Act, 2016
auto components and restaurants serving
march,” quipped one of the leading developers of Ahmedabad. Some may dismiss these in the state. The hard work put in by the
Japanese cuisine. “They even have menu
tall claims as the voice of a passionate citizen of Ahmedabad but one cannot deny the state in this department is evident from
cards printed in Japanese language,”
fact in the recent past Ahmedabad has emerged as one of the major urban centres to the fact that till end November around 800
stated one of the developers. While
44
have received undivided attention when it comes to urban development. All this to a great projects and 300 real estate agents were Increase in sales in H2 2017 over
growth of the automobile industry in this
extent has helped in the rapid growth of real estate in the commercial capital of Gujarat. registered with the state authority. Most H2 2016
belt has opened up a plethora of jobs—
What makes the real estate growth in the city more special is that it is not fuelled by the developers did speak about the teething
%
but not for the local population—which
IT industry but by industries like pharmaceuticals, financial services, textiles and of late, problems that they faced in getting their
is their major grouse. It is largely the
automobiles. The industrial push that Ahmedabad has witnessed has however, run into projects registered. They did take time to
migrant population that has benefitted
Dip in new launches in H2 2017 over a minor niggle and we hope that those issues will soon be ironed out before it starts to understand the details of the rules but are
from the boom in the automobile industry
H2 2016 affect the real estate in the city. There is however, a bright spark for the real estate sector in happy that this new system will benefit the
in this belt. In the recent past many
Ahmedabad. now sector in the long run.
22
23RESEARCH INDIA REAL ESTATE
AHMEDABAD MARKET SNAPSHOT
PARAMETER H2 2017 Change YoY 2016 2017 Change YoY
Launches (housing units) 2,916 (44%) 14,009 4,790 (66%)
Sales (housing units) 7,800 5% 15,956 15,741 (1%)
Price (wt. avg.) - 2% 2,770 2,820 2%
Unsold inventory (housing units) - (29%) 37,835 26,884 (29%)
Quarters to sell - - 8.6 7 -
Age of unsold inventory (in quarters) - - 10.6 10.3 -
Source: Knight Frank Research
in H2 2017. Apart from the 2 above- affordable housing projects is very it. “Previously we used to get around
mentioned locations in the south, micro evident in Ahmedabad. Markets of 600 walk-ins during the months of July
markets like Vastrapur and Shilaj in East and North Ahmedabad, which are and August, this number went down to
West Ahmedabad and Chandkheda in largely considered hubs for affordable below 300,” stated the gentleman.
North Ahmedabad saw the maximum housing projects witnessed close to
launches in the city. 60% of the sales in H2 2017. Even in • As already mentioned, even though
case of the entire year (2017), sales new launches are higher than what
• While South Ahmedabad saw the bulk from these 2 micro markets were close Ahmedabad witnessed in H1 2017,
of new launches, West Ahmedabad to 60%. This trend is in line with those it is still way below the historic high
AHMEDABAD
came a close second followed by East witnessed in H2 2016 and for the entire witnessed in H1 2011 and is 44% down
Ahmedabad and North Ahmedabad. year (2016). compared to H2 2016. The low level of
In H2 2017, there were few large scale new launches and steady sales has had
new launches of close to 1,000 units • Due to its proximity to business districts a bearing on the quarters to sell (QTS)
in South Ahmedabad, which tilted the along SG Highway and Sanand, and the existing unsold inventory. In H2
RESIDENTIAL MARKET scales in favour of this region. West Ahmedabad in recent years has
been a favourite among homebuyers,
2016, the QTS stood at 8.6 and this has
come down to 7 in H2 2017. At present,
• Of the total units launched in H2 especially from those with white collar the city has more than 26,800 unsold
• “This festive season has not been • Gujarat had put in place systems 2017, over 75% of the new launches jobs. Over the past one year, the sales units, which are in various stages of
festive for us,” stated one of the for smooth implementation of RERA happened below the ticket size of in West Ahmedabad have significantly construction. The unsold inventory in
developers during our meetings with by 1 July 2017. There were teething `5 mn. improved. Of the total sales in the Ahmedabad is less than two years old,
49%
them in the city. The sentiments problems and it took developers city, the share of West Ahmedabad in which is a sign of a very healthy market.
echoed by the concerned gentlemen, sometime to understand the new • The lack of available spaces and high H2 2017 was 24% compared to 21%
in short, gives a fair idea of what the law. In most cases, it did take time capital values in central Ahmedabad during the same period last year. On • East Ahmedabad is one of the better
performance of the residential property for developers to get their projects did not infuse much confidence in a year-on-year (YoY) comparison, the performing markets in the city, which
market was in Ahmedabad in H2 2017. registered, especially in the months of developers in this micro market. share of West Ahmedabad, in 2017, attests the homebuyers’ affinity towards
Decline in sales in 2017, since the July and August. Things have however, increased to 26% compared to 19% in affordable houses. This micro market
peak in 2012 • Even though the spark was missing now started to move at a much • While there is nothing much to 2016. has a low QTS of 7 and its age of
in the residential property market in smoother pace post September. cheer about, new launches, sales in inventory is 9.6. Affordable pricing
Ahmedabad, there is a glimmer of hope. Ahmedabad painted a very different • Even though sales have been steady in coupled with easy access to major
From a high of 27,246 units launched in • This explains the 55% spike in new picture. Sales remained largely steady. H2 2017, the months of July and August employment hubs and integrated
H1 2011, new launches were at its nadir launches in H2 2017 compared to H1 When compared to 2016, sales were were hard for developers, especially in development has helped this micro
in H1 2017 as only 1,874 units were 2017. Compared to H2 2016 however, marginally down in 2017, compared case of under-construction projects. market in attracting homebuyers.
89%
launched. New launches had taken new launches are down 44% and to H2 2016, were 5% and higher. In This was largely because of higher tax
a hit in H1 2017 due to lack of clarity compared to 2016, are down by 66%. fact, the sales in H2 2017 is down 19% rate under GST, something that the • In H2 2017, North Ahmedabad has the
on the Real Estate (Regulation and compared to the average sales of 9,677 developers were trying to understand highest level of inventory. This however,
Development) Act, 2016 (RERA). From • Bulk of the launches in Ahmedabad units recorded across H2 2013, H2 and their inability to communicate the should not be much of a concern
a low of 1,874 units in H1 2017 new happened in South Ahmedabad in 2014 and H2 2015. same in a manner that the homebuyer because its QTS is only 7.7 and the age
launches in H2 2017 moved to 2,916 locations like Kankaria and Juhapura. could understand. Explaining the of inventory is only 9.6.
Decline in launches in 2017, since the
units, an increase of 55%. In fact, South Ahmedabad saw 35% of • The affinity of homebuyers towards situation one of the developers aptly put
peak in 2011
the new launches in Ahmedabad city
24
25KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
LILAPUR
ZUNDAL KARAI
RESEARCH LAPKAMAN INDIA REAL ESTATE
TRAGAD
LIMBADIA
AMIYAPUR
SUGHAD
RESIDENTIAL
MEDRA
CHANDKHEDA
NIGAM NAGAR KOTARPUR RAIPUR
LAUNCHES AND SALES
RAKANPUR
OGNAJ
RANASAN
SANTEJA
BHAT
GOTA
544 1,501 ENASAN
-77% -70% GIDC NARODA
H2 2017 2017 LAUNCHES (IN UNITS) SALES (IN UNITS) % CHANGE (YOY)
2,589 5,134 NOBLE NAGAR
CHANDLODIA 18% 8%
SABARMATI
HANSOL BILASIYA
NORTH 585 1,330 VAHELAL
VIJAY NAGAR -34% -55%
CHANAKYAPURI
H2 2017 2017
1,899
NAVA NARODA 3,861
In fact, the sales
SOLA VILLAGE -35% -20%
in H2 2017 is down
19% compared to
MEGHANI
NARANPURA
NAGAR
EAST
MEMNAGAR KRISHNANAGAR
the average sales
THALTEJ DUBESHWAR
of 9,677 units
749 831 NIKOL
KATHWADA
recorded across
-22% -75% NAVRANGPUR
H2 2017 2017
25 70 H2 2013, H2 2014
1,876 4,045 -97% -96%
BOPAL
BODAKDEV 18% 32% H2 2017 2017
BAPUNAGAR
and H2 2015.
553
SHAHPUR 1,129 KUBADTHAL
WEST -17% -16%
ODHAV BHUVALDI
INDUSTRIAL
GIDC ESTATE
SPRING VALLEY CENTRAL INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2
32%
AMRAIWADI
MAHADEV
MAKARABA JUHAPURA NAGAR
1,013 1,058
984% 5%
H2 2017 2017 RAMOL
SARKHEJ GAM
Increase in sales in West Ahmedabad
883 1,572
ISANPUR MEMADPUR in 2017
3% -20%
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
SOUTH GERATNAGAR
MICRO-MARKET LOCATIONS
SANATHAL VATVA
PIPLAJ CENTRAL Paldi, Vasna, Navrangpura, Maninagar, Dudheshwar, Ambawadi
NAROLGAM
EAST Naroda, Vastral, Nikol, Kathwada Road, Odhav
VINZOL UNDREL
DHAMATVANA
VANZAR
NORTH Gota, New Ranip, Tragad, Chandkheda, Motera
SOUTH
VANCH Narol, Vatva, Vinzol, Hathijan
LAXMIPUR HATHIJAN
WEST S. G. Highway, Prahlad Nagar, Bopal, Thaltej, Science City Road
Source: Knight Frank Research
VISALPUR BADODRA
All maps are for representational purpose not to scale
HIRAPUR
ASLALI
26
27
GAMDIKHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
LILAPUR
ZUNDAL KARAI
RESEARCH LAPKAMAN INDIA REAL ESTATE
TRAGAD
LIMBADIA
AMIYAPUR
SUGHAD
RESIDENTIAL
MEDRA
CHANDKHEDA
NIGAM NAGAR KOTARPUR RAIPUR
UNSOLD INVENTORY
RAKANPUR
OGNAJ
RANASAN
SANTEJA
BHAT
GOTA ENASAN
7796 7.7 GIDC NARODA
UNSOLD INVENTORY (IN UNITS) QUARTERS TO SELL
(-29%)
CHANDLODIA
9.1 NOBLE NAGAR AGE OF UNSOLD INVENTORY (IN QUARTERS)
SABARMATI
HANSOL BILASIYA AS ON 31 DEC 2017
VAHELAL
NORTH
CHANAKYAPURI
VIJAY NAGAR
6452 7
(-29%)
SOLA VILLAGE
NAVA NARODA
9.6
MEGHANI
NARANPURA
NAGAR
EAST
MEMNAGAR KRISHNANAGAR
THALTEJ DUBESHWAR
KATHWADA
NIKOL
6721 8.2 NAVRANGPUR
(-32%)
BODAKDEV
12.3 1888 7.2
BOPAL BAPUNAGAR
SHAHPUR
(-29%)
7.6 KUBADTHAL
WEST ODHAV BHUVALDI
INDUSTRIAL
GIDC ESTATE
SPRING VALLEY CENTRAL INDUSTRIAL
AREA ODHAV
KHADIA
29%
NIYOJAN NAGAR
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
Movement in unsold inventory in
MAHADEV H2 2017 alone
MAKARABA JUHAPURA NAGAR
4032 8.8
RAMOL
SARKHEJ GAM (-24%) ISANPUR
11.5 MEMADPUR
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
SOUTH GERATNAGAR
SANATHAL VATVA
7
PIPLAJ
NAROLGAM
VINZOL UNDREL
DHAMATVANA
VANZAR
Quarters to exhaust unsold inventory
VANCH
LAXMIPUR HATHIJAN
VISALPUR BADODRA
All maps are for representational purpose not to scale
HIRAPUR
ASLALI
28
29
GAMDIKHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
LILAPUR
ZUNDAL KARAI
RESEARCH LAPKAMAN INDIA REAL ESTATE
MOTERA
TRAGAD
3,400-3,589 LIMBADIA
AMIYAPUR
[4%] [3%]
SUGHAD
RESIDENTIAL
MEDRA
CHANDKHEDA
NIGAM NAGAR KOTARPUR RAIPUR
PRICING
RAKANPUR
OGNAJ
RANASAN
SANTEJA
CHANDKEDA
GOTA
2,650-2,769 BHAT
ENASAN
[1%] [2%]
GIDC NARODA PRICE RANGE (IN ` SQ.FT.) 12 MONTH CHANGE (YOY)
NOBLE NAGAR
CHANDLODIA 6 MONTH CHANGE (YOY)
SABARMATI
HANSOL BILASIYA
VAHELAL
NORTH
VIJAY NAGAR
CHANAKYAPURI
NIKOL
NAVA NARODA 2,000-2,160
SOLA VILLAGE
[2%] [1%]
MEGHANI
NARANPURA
NAVRANGPURA NAGAR
EAST
KRISHNANAGAR
MEMNAGAR 5,400-5,555
[3%] [3%]
THALTEJ DUBESHWAR
KATHWADA
NIKOL
NAVRANGPUR
BOPAL
3,200-3,223
BODAKDEV AMBAVADI VASTRAL
[3%] 0%]
BOPAL 5,400-5,555 BAPUNAGAR
2,000-2,132
SHAHPUR
[4%] [4%] [3%] [1%] KUBADTHAL
WEST ODHAV BHUVALDI
INDUSTRIAL
PRAHLAD NAGAR GIDC ESTATE
SPRING VALLEY 5,480-5,513 CENTRAL INDUSTRIAL
AREA ODHAV
KHADIA
4%
[1%] [1%]
NIYOJAN NAGAR
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
Price change in H2 2017 in
MAHADEV Ambavadi
MAKARABA JUHAPURA NAGAR
ASLALI CIRCLE
1,280-1,354
[1%] [0%] RAMOL
SARKHEJ GAM
ISANPUR MEMADPUR
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
SOUTH GERATNAGAR
SANATHAL VATVA
4%
VATVA
PIPLAJ
1,450-1,551
[1%] [-1%]
NAROLGAM
VINZOL UNDREL
DHAMATVANA
VANZAR
Price movement in 2017 in Motera
VANCH
LAXMIPUR HATHIJAN
VISALPUR BADODRA
All maps are for representational purpose not to scale
HIRAPUR
ASLALI
30
31
GAMDIRESEARCH INDIA REAL ESTATE
OFFICE MARKET • Unlike other real estate markets, like
Bengaluru and Hyderabad, the office
of deals in H2 2017, compared to H2
2016, coupled with a massive increase
SECTOR-WISE SPLIT OF
market in Ahmedabad is not driven by in average deal size can be attributed
TRANSACTIONS
the IT/ITeS sector. In fact, in H2 2016, to companies taking up large spaces in
the IT/ITeS sector did not pick up any the city. The Bombay Stock Exchange
space in the city. However, in H2 2017 and Oracle India picked up considerable
AHMEDABAD MARKET SNAPSHOT the IT/ITeS sector picked up 14% of office space in GIFT, in H2 2017.
the transacted space in the city. Oracle
PARAMETER H2 2017 Change YoY 2016 2017 Change YoY India is the only major IT company that • Of the total transacted office space in
picked up space in GIFT City in H2 the city, the share of CBD West and H2 2016
New completions (mn sq ft) 0.69 -36% 1.67 2.92 75% 2017. PBD were almost equal. Among the
micro markets, GIFT in PBD accounted
Transactions (mn sq ft) .32 61% .95 1.46 53% • The office market in Ahmedabad is for all office space transacted in H2
largely driven by BFSI, Other Services 2017, thereby becoming the most
Weighted Average Rental - - 42 40 5% and manufacturing. In H2 2017, the important office market location
(INR/sq ft/month) largest share of the pie went to BFSI in Ahmedabad. Other important
followed by Other Services, IT/ITeS micro markets that witnessed major
Stock (Mn sq ft) - - 15.54 18.46 19%
and manufacturing. When compared transactions are SG Highway and CG
to H2 2016, after IT/ITeS sector, the Road in CBD West.
Vacancy (%) - - 19.6% 23.6% -
share of BFSI in transacted office space H2 2017
Source: Knight Frank Research has grown in H2 2017. The share of • Even though the office market in
Other Services has dipped marginally Ahmedabad is in its infancy, among
• The Ahmedabad office market mn sq ft space in H2 2016. During H2 in H2 2017 compared to H2 2016. The the early signs of this market steadily
witnessed office space transaction of 2017, new office completions were manufacturing sector is the biggest growing is that rentals are firming up
0.32 mn sq ft in H2 2017, which is 61% done in only three projects, one each loser, in terms of transacted office both in CBD West and PBD, more so in
higher than the space transacted in H2 on SG Highway, Science City Road and space, in H2 2017 compared to H2 PBD. Compared to H2 2016, rentals in
2016. Compared to 2016, office space Satellite Road. All of this supply was in 2016. The sector had picked up 26% of PBD have moved up by 9% in H2 2017,
H2 H2
the transacted office space in H2 2016 and in comparison to H1 2017 have Industry
transaction grew by 53%. Grade-B office buildings. 2016 2017
and in H2 2017 its share fell to only 8%. increased by 4%, in H2 2017. Rental
• This massive jump in transacted space • Compared to 2017 however, new In fact, the share of the manufacturing movement, however, has been more BFSI 35% 42%
can be attributed to availability of good completions moved up by 53%. During sector was at its highest in H1 muted in CBD West. In H2 2017, rentals
quality office space at competitive 2017, 86% of the supply came in 2015, when it picked up 40% of the have remained stable compared to H1 IT/ITeS - 14%
Among the prominent rates. Among the prominent landmarks CBD West in the micro markets along transacted office space in the city. The 2017 and moved up by 1% compared
landmarks in the in the Ahmedabad office market is the SG Highway, Anandnagar Road, CG falling share of the manufacturing sector to H2 2016. Manufacturing 26% 8%
Gujarat International Finance Tec-City Road, Bopal Ambli Road, Keshav could be attributed to the increased
Ahmedabad office or GIFT, which has witnessed office Baug, Science City Road and Satellite attention Ahmedabad is receiving from Other Services 39% 36%
market is the Gujarat space pick up by companies from BFSI, Road. The balance 14% space entered companies in the services sector. Note: BFSI includes BFSI support services
IT/ITeS and Other Services sectors in the Ahmedabad office market in PBD
International Finance H2 2017. Offering state-of-the-art world (GIFT). • The average deal size in H2 2017 is
AVERAGE DEAL SIZE AND
Tec-City or GIFT, class technology, GIFT will change reported to be 19,062 sq ft, which
NUMBER OF DEALS
the dynamics of the office market in • The office market in Ahmedabad is is 42% higher than in H2 2016. The
which has witnessed Ahmedabad. still in its infancy, compared to urban average deal size in H2 2017 is
office space pick centres like Mumbai, Bengaluru and however, 11% lower than in H1 2017.
• Signs of the growing Ahmedabad office Delhi NCR. The necessary infrastructure The deal size is also 64% lower than 13,380
up by companies space market can also be gauged from is in place, and of late, developers have what the city witnessed in H1 2016. Average deal size (sq ft)
from BFSI, IT/ITeS the fact that for the first time transacted moved in to meet the requirements During H1 2016, Ahmedabad reported H2 2016
office space in the city crossed 1 mn sq of companies either moving into the its largest deal size of 53,607 sq ft.
and Other Services ft. In 2016, 0.95 mn sq ft of space was city or expanding their presence in the 15
sectors in transacted and in 2015, the figure stood city. In the present day, this has led to • H2 2017 witnessed the completion of Number of deals
at 0.8 mn sq ft. a situation where the supply outstrips 17 deals, which is marginally higher
H2 2017. demand. This explains the double digit than what Ahmedabad witnessed in H2
19,062
• New completions on the other hand vacancy rates in the city, which has 2016. The increase in number of deals
Average deal size (sq ft)
witnessed a dip of 36% in H2 2017 increased slightly since H1 2016. In from 15, in 2016, to 17, in H2 2017,
compared to H2 2016. During H2 2017, H2 2017, the vacancy rate in the city is should be viewed in the light of a 42% H2 2017
increase in average deal size in H2
only 0.32 mn sq ft of office space
entered the market compared to 1.08
23.6%, up from 19.6% in H2 2016.
2017 compared to the same period last 17
Number of deals
year. The small increase in the number
32
33KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
LILAPUR
KARAI
0.16
ZUNDAL
RESEARCH LAPKAMAN
229% INDIA REAL ESTATE
TRAGAD
0.38 AMIYAPUR
LIMBADIA
-35%
SUGHAD
OFFICE
MEDRA
CHANDKHEDA
NIGAM NAGAR PBD KOTARPUR RAIPUR
TRANSACTIONS
RAKANPUR
OGNAJ
RANASAN
SANTEJA
BHAT
GOTA ENASAN
GIDC NARODA
H2 2017 2017 % CHANGE (YOY)
NOBLE NAGAR
CHANDLODIA SABARMATI IN MN SQ FT
HANSOL BILASIYA
VAHELAL
VIJAY NAGAR
CHANAKYAPURI
NAVA NARODA
SOLA VILLAGE
MEGHANI
NARANPURA
NAGAR
MEMNAGAR KRISHNANAGAR
THALTEJ
0.16
DUBESHWAR
7% NIKOL
KATHWADA
NAVRANGPUR
1.08
194%
BODAKDEV
BOPAL BAPUNAGAR
SHAHPUR
KUBADTHAL
CBD WEST ODHAV BHUVALDI
INDUSTRIAL
GIDC ESTATE
SPRING VALLEY INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
23.6%
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
MAHADEV
MAKARABA JUHAPURA NAGAR Vacancy rate in Ahmedabad office market in H2 2017
RAMOL
SARKHEJ GAM
ISANPUR MEMADPUR
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
GERATNAGAR
SANATHAL VATVA
PIPLAJ
BUSINESS DISTRICT MICRO MARKETS
NAROLGAM
VINZOL Bodakdev, Keshav Baug, Prahladnagar, Satellite, SG Highway,
CBD West UNDREL
DHAMATVANA Thaltej
VANZAR
PBD Gandhinagar, Gift City
VANCH
LAXMIPUR HATHIJAN
Source: Knight Frank Research
VISALPUR BADODRA
All maps are for representational purpose not to scale
HIRAPUR
ASLALI
34
35
GAMDIKHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
LILAPUR
ZUNDAL KARAI
RESEARCH LAPKAMAN INDIA REAL ESTATE
TRAGAD
9% LIMBADIA
40-41
AMIYAPUR
4% SUGHAD
OFFICE RENTAL
MEDRA
CHANDKHEDA
NIGAM NAGAR PBD KOTARPUR RAIPUR
RAKANPUR
OGNAJ
RANASAN
RENTAL VALUE RANGE IN H2 2017 (INR/SQ FT/MONTH)
SANTEJA
BHAT
GOTA ENASAN 12 MONTH CHANGE 6 MONTH CHANGE
GIDC NARODA
NOBLE NAGAR
CHANDLODIA SABARMATI
HANSOL BILASIYA
VAHELAL
VIJAY NAGAR
CHANAKYAPURI
NAVA NARODA
SOLA VILLAGE
MEGHANI
Of the total transacted
office space in the city,
NARANPURA
NAGAR
MEMNAGAR KRISHNANAGAR
THALTEJ DUBESHWAR
the share of CBD West
NIKOL
KATHWADA
and PBD were almost
NAVRANGPUR
1% equal. Among the micro
40-43
0% markets, GIFT in PBD
BODAKDEV
BOPAL
SHAHPUR
BAPUNAGAR
accounted for all office
KUBADTHAL
CBD WEST ODHAV
INDUSTRIAL
BHUVALDI space transacted in H2
2017, thereby becoming
GIDC ESTATE
SPRING VALLEY INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
the most important
BAGODARA
SHERKOTDA KANBHA office market location in
HELA
KUJAD
Ahmedabad.
VASNA
VEJALPUR-2 AMRAIWADI
MAHADEV
MAKARABA JUHAPURA NAGAR
RAMOL
SARKHEJ GAM
ISANPUR MEMADPUR
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
GERATNAGAR
SANATHAL VATVA
4% 9%
PIPLAJ
NAROLGAM
VINZOL UNDREL
DHAMATVANA
VANZAR
Increase in rentals in PBD in H2 Increase in rentals in PBD in 2017
VANCH
2017 alone
LAXMIPUR HATHIJAN
VISALPUR BADODRA
All maps are for representational purpose not to scale
HIRAPUR
ASLALI
36
37
GAMDIRESEARCH INDIA REAL ESTATE
Bengaluru experienced unprecedented economic and spatial growth as a result of rapid in-migration and growth
of the IT/ITeS sector. With 42% population growth in 2001–2011 decade, the population in the city accounts for
nearly 14.60% of total state population concentrated in merely 0.64% of land area. Against this backdrop, the
Bangalore Development Authority (BDA) recently notified the Revised Master Plan (RMP) 2031 (Provisional) for
public suggestions on 26 November 2017. With ecological sustainability, inclusive growth and mobility as the
guiding principles, it is envisaged as a spatial policy framework to tackle the key challenges of
a) rapid population explosion b) development led infrastructure rather than infrastructure led development c)
protecting the lake and valley system d) inadequate affordable housing stock
e) integration of traffic & transportation and infrastructure f) uneven spatial distribution of economic activities,
infrastructure, social amenities and open spaces.
FOLLOWING ARE THE KEY HIGHLIGHTS supported with a targeted shift of public 88.49 sq km or 10.01% of total
OF DRAFT RMP 2031 AND THEIR transport share from existing 48% to developable area to comply with
IMPLICATIONS: 68–70%. an NGT judgment dated 4 May
2016, which had rendered the
A) EXTENSION OF CONSURABATION B) CHANGES IN PROPOSED LAND USE
buffer zones assigned by RMP
LIMITS OF RMP 2031 AS PER RMP 2031
2015 as unscientific. This 88.49 sq
over RMP 2015 is to the extent of 80 sq km
i) More land for residential usage – It km includes 46 sq km apportioned
(from 804 sq km to 884 sq km with a gross
has been proposed to increase as vacant land in RMP 2015.
density of 210 persons per hectare) mainly
the residential land use category RMP 2031 has taken into account
due to availability of large vacant tracts of
from 17.63% of total area of LPA the objections raised by NGT in
land within the existing conurbation limits.
of BDA to 424.77 sq km or 48.03% general and classifies the streams
This is in line with the strategy to promote
of total area of LPA of BDA. This is (rajkaluves) with respect to primary,
compact high density developments
a significant departure from RMP secondary and tertiary, which
2015 and recognises the planning will be treated as no construction
CONURBATION OF RMP 2031 authority’s commitment towards zones for all intent and purposes.
creation of more residential zones, If implemented systematically, this
Description Extent most of which are demarcated in clear distinction of NGT Buffer will
Area of Conurbation 884.31 sq km the outskirts where new special render approximately 21,866 acres
development zones (SDZ) are being as no construction zones limiting
Area of Agriculture 322.66 sq km
envisaged. land availability for new construction
Area of Local 1206.97 sq
activities. In the long term, land
Planning Area (LPA) km ii) Provision for an NGT buffer is
prices for parcels adjacent to NGT
of BDA a new introduction in % to total
buffers might a witness steep
developable land area – A new
upsurge due to this change.
Source: Knight Frank Research, category NGT Buffer stipulates
Provisional Revised Master Plan 2031
Provisional Revised C) IDENTIFICATION OF 5 SPECIAL DEVELOPMENT ZONES (SDZ) AS BELOW:
MASTER PLAN 2031
PROPOSED SDZ EMERGING ECONOMIC ACTIVITIES TO FUEL GROWTH
1 Bellary Road Hubs of IT
2 Sarjapur Road Other related Hi-Tech industries
envisions decongesting Bengaluru 3 Hosur Road Supporting service sector offices
4 Mysuru Road Hub for knowledge driven economy
-By Divya Grover
5 Old Madras Road Creation of new opportunities through light and service industries
38
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