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Pune Market Watch Office - Savills
H1 2021

S P OT L I G H T   Pune Market Watch
Savills Research
                         Office
Pune Market Watch Office - Savills
India Market Watch - Office – H1 2021                                                                                                                                      India Market Watch - Office – H1 2021

                                                                                                                                                                                                                           Chart 1: GDP Growth (annual % change)
                                                                                                                                                                                                                             10
                                                                                                                                                                                                                              8
                                                                                                                                                                                                                              6
                                                                                                                                                                                                                              4
                                                                                                                                                                                                                              2
                                                                                                                                                                                                                              0
                                                                                                                                                                                                                             -2
                                                                                                                                                                                                                             -4
                                                                                                                                                                                                                             -6
                                                                                                                                                                                                                             -8
                                                                                                                                                                                                                            -10
                                                                                                                                                                                                                                           2018                     2019               2020                  2021                   2022                   2023

                                                                                                                                                                                                                                              World                 United States           China             Euro Area               Japan               India*

                                                                                                                                                                                                                           Source IMF World Economic Outlook
                                                                                                                                                                                                                           * The statistics for India are for Financial Year, while for the rest of the countries, its for Calender Year.

                                                                                                                                                                                                                           Chart 2: COVID impact on Sectoral GDP (%)

             INDIAN                                                                                                                                                                                                               3.5 3.0 4.5 3.1
                                                                                                                                                                                                                                                                             6.9                6.5
                                                                                                                                                                                                                                                                                                      14.5

                                                                                                                                                                                                                                                                                                                                                          6.7 5.4

             ECONOMY 2021
                                                                                                                                                                                                                                                                       1.7

                                                                                                                                                                                                                                                                -1.5
                                                                                                                                                                                                                                                                                                                                    -2.3
                                                                                                                                                                                                                                                                                                                                            -5.0
                                                                                                             UNION BUDGET 2021-22 &                                                                                                                                                         -7.2                             -7.9
                                                                                                                                                                                                                                                                                                                                                   -9.1
                                                                                                             POLICY
This section contains a narration of the             OUT OF RECESSION,                                       The central government’s annual budget, presented
                                                                                                                                                                       Monetary Policy & RBI
                                                                                                                                                                                                                                                                                                                         -16.1
socio-economic scenario of India during
January to June 2021 period. It has a direct
                                                     BUT…                                                    before the second wave, had six key elements              The Monetary Policy Committee (MPC) of the
                                                                                                             impacting real estate, as shown in the Annexure.          Reserve Bank of India contributed by keeping
bearing on all businesses and hence on real          India witnessed a protracted wave of pandemic in
                                                                                                             Notable among these was the PLI scheme of                 the benchmark lending rate constant at 4%
estate.                                              2020, which peaked on 17th September. A technical
                                                                                                             approximately INR 2 lakh crores, which aims to            during this period. The RBI also approved a
                                                     recession occurred, as two consecutive quarters
                                                                                                             significantly boost manufacturing and allied              transfer of INR 99,122 crores as surplus to the
A systematic, sequential and detailed reporting      reported negative GDP growth. However, the new                                                                                                                                                      -36.0
                                                                                                             sectors. Further, there was push for affordable           government.
on all events during this period is presented in     year started with hope, as vaccination was rolled out
12 unique #SavillsRoundUp, which we publish          in India on 16th January 2021, beginning with           housing, through focus on divestments, stressed           COVID Specific Support
on fortnightly basis.                                frontline services personnel. Soon, the country was     asset resolution and tax holiday extensions. While
                                                                                                                                                                       As measures for COVID specific support, the                                                                                               -48.1
                                                     out of recession with a small but noteworthy 0.4%       these announcements were made before the second                                                                                                                         -49.5
                                                                                                                                                                       government announced 100% guarantee cover
Please refer to the below link and follow            GDP growth for the Oct-Dec 2020 quarter (Q3 of FY       wave, some others on policy and fiscal fronts came
                                                                                                                                                                       for loans of up to INR 2 crores for hospitals and           Agriculture             Manufacturing                Construction                Trade,Hotels              Financial, Real
#SavillsRoundUp on our social media handles          2020-21). It was followed by 1.6% growth in Q4 of       later.
                                                                                                                                                                       nursing homes, for setting up oxygen                                                                                                                                       Estate
to know about the events chronologically and         FY 2020-21. This created a belief that India had        In a virtual follow-up of the three Atma Nirbhar          generation plants. Also, COVID treatment
in real time.                                        overcome the virus through a single wave, whereas       Bharat schemes of 2020, the Finance Minister                                                                                  Apr-Jun 20                        Jul-Sep 20                      Oct-Dec 20                       Jan-Mar 21
                                                                                                                                                                       items have been exempted from IGST till
                                                     most large economies around the world had suffered      announced a package scheme of INR 6.29 lakh               August 2021.
                                                     two or more waves. In early March, vaccination was      crores, including help for the beleaguered travel and                                                         Source MoSPI, Government of India
                                                     opened to common public, amid rising confidence.        allied sectors. These are among those key sectors         REST OF 2021
                                                     In a strong reversal though, by the end of March, a     which continue in the negative growth zone                Contrary to the upbeat sentiment in the early
                                                     second wave began and rose to enormous                  (chart-2).                                                weeks of 2021, the turn of events in March and
                                                     proportions in a matter of weeks. Lockdowns
                                                     returned as India’s daily infection rate peaked at
                                                                                                             Another key event of the period was the central           the rest of H1 has created an atmosphere of
                                                                                                                                                                       uncertainty. A third wave of the pandemic has
                                                                                                                                                                                                                                             India’s GST collections remained at
                                                                                                             cabinet’s approval to Model Tenancy Act. It is a
                                                     4.14 lakh in the first week of May. This was almost     watershed development which paves the way for             neither been ruled out nor clearly projected at
                                                                                                                                                                       this stage. Various international and domestic
                                                                                                                                                                                                                                             over INR 1 lakh crore for 8 consecutive
                                                     4.25 times the single-day peak of the first wave.       rental housing creation in India. Hopefully, it will
                                                     Nevertheless, it recorded a steady decline from         also create a suitable platform for private sector        agencies have repeatedly changed India’s                              months.
                                                                                                             participation. It is important to look at this in         growth forecast during this period. Towards
                                                     there, with estimates of complete control in July.
                                                                                                             conjunction with the announcement of ARHC                 the close of H1, Moody’s and S&P estimated
                                                     Vaccination continued, despite numerous
                                                                                                             Guidelines of July 2020.                                  the growth to be approximately 9.6% and 9.5%
                                                     roadblocks during this time, as India overtook the
                                                     US by administering 32.36 crore doses on 28th June.     SEBI announced a change in application value for
                                                                                                                                                                       respectively for FY 2022.                                             India started with two vaccines, viz.,
                                                     Anxiety regarding a third wave later this year, hangs
                                                     heavily on the horizon though.
                                                                                                             REITs and InvITs to INR 10,000 and INR 15,000             The second wave appears to be receding at the
                                                                                                                                                                       end of H1. Businesses are expected to recover
                                                                                                                                                                                                                                             Covishield & Covaxin and added two
                                                                                                             respectively, from INR 50,000 and INR 1 lakh
Click here to read                                                                                           earlier. Also, the trading lot size was reduced to one.   on the strength of advancing vaccinations in
                                                                                                                                                                       the months ahead.
                                                                                                                                                                                                                                             more, Sputnik-V and Moderna during
                                                                                                             This move has immense potential to attract retail
Note:
This section contains figures in Indian system of
                                                                                                             investors and open more avenues for investment.                                                                                 H1 2021. A fifth one is also expected
lakhs and crores (refer Appendix for international
conversions).
1 USD = Approx. 74.28 INR on June-30, 2021
                                                                                                                                                                                                                                             during the year.
savills.in                                                                      2                                                                                                                                                                               3
Pune Market Watch Office - Savills
India Market Watch - Office – H1 2021                                                                                                                                                     India Market Watch - Office – H1 2021

                                                                                                                                                                                                                                              COMPLETIONS &                                        Supply Addition: H1 2021 vs H1 2020

             INDIA OFFICE
                                                                                                                                                                                                                                              VACANCY HIGHLIGHTS                                                                        % Change YoY                                   H1 2020                 H1 2021
                                                                                                                                                                                                                                              New completions increased marginally by 4%                        7.0                                                                                            60%
                                                                                                                                                                                                                                              YOY to about 18.0 mn sq. ft. Bengaluru has

             MARKET UPDATE
                                                                                                                                                                                                                                              recorded the highest infusion of new supply                       6.0                                                                                            40%
                                                                                                                                                                                                                                              constituting a 36% share, followed by
                                                                                                                                                                                                                                                                                                                                                                                                               20%
                                                                                                                                                                                                                                              Hyderabad and Delhi-NCR at 28% and 22%                            5.0
                                                                                                                                                                                                                                              shares, respectively.                                                                                                                                            0%
                                                                                                                                                                                                                                                                                                                4.0

                                                                                                                                                                                                                                                                                                                                                                                                                        % change YOY
                                                                                                                                                                                                                                              Interestingly most cities namely Bengaluru,
                                                                                                                                                                                                                                                                                                                                                                                                               -20%
                                                                                                                                                                                                                                              Hyderabad, Mumbai and Pune saw an

                                                                                                                                                                                                                                                                                                    mn sq.ft.
                                                                                                                                                                                                                                                                                                                3.0
                                                                                                                                                                                                                                              increase in new completions compared to the                                                                                                                      -40%
                                                                                                                                                                                                                                              same period last year. This is on account of                      2.0
                                                                                                                                                                                                                                              deferred supply getting completed, since                                                                                                                         -60%
                                                                                                                                                                                                                                              construction activities were not hampered in                      1.0
             Scan to Download                                                                                                                                                                                                                                                                                                                                                                                  -80%
             WhatsApp version                                                                                                                                                                                                                 partial lockdowns imposed by the State
                                                                                                                                                                                                                                              governments.                                                      0.0                                                                                            -100%

                                                                                                                                                                                                                                                                                                                      Bengaluru

                                                                                                                                                                                                                                                                                                                                        Chennai

                                                                                                                                                                                                                                                                                                                                                                           Hyderabad

                                                                                                                                                                                                                                                                                                                                                                                       Mumbai

                                                                                                                                                                                                                                                                                                                                                                                                    Pune
                                                                                                                                                                                                                                                                                                                                                            Delhi NCR
                                                                                                                                                                                                                                              Overall India vacancy levels increased to
                                                                                                                                                                                                                                              16.2% at the end of June, as supply addition
                                                                                                                                                                                                                                              exceeded the pace of leasing activity. Also,
                                                                                                                                                                                                                                              some occupiers optimised their real estate                  Source Savills India Research
                                                                                                                                                                                                                                              portfolios to an efficient space, thereby
The year began with optimism and reimagined                                        KEY STATISTICS: H1 2021                                                                                                                                    spiking the vacancy rates in select markets. It
workspaces, as lessons from the first wave of the                                                                                                                                                 Deal Distribution: Share in Total Leasing                                                                      Only two cities, namely Chennai and
                                                                                                                                                                                                                                              should be noted that this can be a temporary
pandemic were getting implemented and businesses                                                                             New Supply                    YOY change                             (in sq. ft.)                                                                                                    Delhi-NCR, saw reductions in new
                                                                                                                                                                                                                                              phenomena in markets which are in a state of
started to stabilize. But the unanticipated second wave
hit hard in the second quarter, leading to a temporary
                                                                                   Total India Stock
                                                                                                                             18.0                          4%                                                                                 flux.                                                               completions compared to H1 2020.

                                                                                   621.8
                                                                                                                                                                                                  Up to 25,000
pause in expansion plans and dragging the leasing                                                                            mn sq. ft.
activity to a six-year low.                                                                                                                                                                       27.7%
                                                                                                                                                                                                                                              Rental trends
                                                                                   mn sq. ft.                                Gross Absorption              YOY change                                                                                                                              Vacancy Levels

                                                                                                                             10.9
The second quarter saw 65% QOQ decline in leasing
                                                                                                                                                           -38%                                                               25,001-50,000   Most markets have seen a decline in average
                                                                                                                                                                                                  50,001-99,999                                                                                                                                                                        H2 2020                 H1 2021
activity, owing to lockdowns and the severity of                                                                                                                                                                                                                                                      25.0%
                                                                                                                                                                                                  12.4%                              16.7%    rental values compared to last year, to the tune
infection. In the next few sections, we highlight the                                                                                                                                                                                         of about 6% YOY. A few micro markets have
                                                                                                                             mn sq. ft.
performance of the office sector during the first half of                                                                                                                                                                                     seen a sharper decline as landlords exhibited          20.0%
the year 2021.                                                                                                                                                                                                                                flexibility to attract new clients, while prime
                                                                                                                                                                                                                                              locations with limited availabilities saw stable          15.0%
                                                                   Gross Absorption in Major Cities                                  H1 2020         H1 2021         YOY Decline %                                          100,000 or more   rents. NCR submarkets saw softening of rents
ABSORPTION HIGHLIGHTS:                                                                                                                                                                                                              43.2%     among other markets as depicted in the table
10.9 mn sq. ft.                                                                6                                                                                           0%
                                                                                                                                                                                                                                              below.                                                   10.0%
                                                                                     -16%

                                                                                                   -48%

                                                                                                                                 -48%

                                                                                                                                                -39%

                                                                                                                                                                -63%
                                                                                                                -38%

                                                                                                                                                                           -10%
At 10.9 mn sq. ft. gross office space absorption across India’s                5
                                                                                                                                                                           -20%
six major cities1 registered a 38% YOY decline as occupiers                         4.9                                                                                                           Demand Split by Sectors                                                                                  5.0%
                                                                                                                                                                           -30%
                                                                               4

                                                                                                                                                                                  YoY decline %
paused expansions and resumed portfolio optimisation                                      4.1
                                                                                                                                                                           -40%
                                                                   mn sq.ft.

plans. The pecking order was not a surprise as Bengaluru                       3                                                                                           -50%
                                                                                                                                                                                                                                                  Select pockets kept overall rents                       0.0%
                                                                                                               3.2                                                                                 IT                       BFSI
continued to lead with 4.1 mn sq. ft. of leasing activity                                                                                                                                                                                         under pressure, thereby creating

                                                                                                                                                                                                                                                                                                                                                                                                                 Pune
                                                                                                                                                                                                                                                                                                                                                                                                      Mumbai
                                                                                                                                                                                                                                                                                                                                                  Chennai

                                                                                                                                                                                                                                                                                                                                                                        Delhi NCR

                                                                                                                                                                                                                                                                                                                                                                                        Hyderabad
                                                                                                                                                                                                                                                                                                                           Bengaluru
                                                                                                                               2.7                                         -60%                    51%                      12%
representing 37% share in H1 2021. It also saw the lowest                      2                                                               2.3
                                                                                                  2.1                 2.0
                                                                                                                                                               2.4         -70%                                                                  conditions favourable to occupiers.
decline of 16% YOY, compared to the other five cities.                                                                                                                     -80%
                                                                               1                                                      1.4            1.4
                                                                                                         1.1                                                         0.9   -90%
Following Bengaluru, Delhi-NCR witnessed leasing activity                                                                                                                                          Engineering &            Flexible                                                                      Source Savills India Research
of 2.0 mn sq. ft. in H1 2021, recording a 38% YOY decline.                     0                                                                                           -100%                   Manufacturing            Workspace
                                                                                                                                                                                                   10%                      8%
                                                                                      Bengaluru

                                                                                                    Chennai

                                                                                                                 Delhi-NCR

                                                                                                                                  Hyderabad

                                                                                                                                                Mumbai

                                                                                                                                                                Pune

While Mumbai and Hyderabad shared third place with
approximately 1.4 mn sq. ft. absorption, the annual decline in                                                                                                                                                                                Rental Range in H1 2021
leasing was sharper for Hyderabad at 48% compared to 39%
                                                                                                                                                                                                                                               in INR per sq. ft. pm                  Low                                         High                                              Average YOY change*
for Mumbai.                                                                                                                                                                                        Pharma &                 Consulting

The top cities of Bengaluru, Delhi-NCR and Mumbai
                                                                   Large deals continue despite the                              Technology occupiers continue to                                  Healthcare
                                                                                                                                                                                                                            4%                 Bengaluru                               40                                              156                                                          0%
                                                                   cautious approach                                             drive demand and large leases                                     7%
constituted around 69% of the total leasing activity in H1                                                                                                                                                                                     Chennai                                 36                                              110                                                          -1%
2021. Pune recorded approximately 0.9 mn sq. ft. leasing,          Sizeable consolidations and expansions                        The technology sector continued to be the
                                                                   have contributed to the share of large deals                  primary demand driver for office real estate                                                                  Hyderabad                               35                                              70                                                           -3%
which was the lowest in volume as well as the largest decline
among these six cities. Chennai just managed to breach 1.0         (deal size more than 100,000 sq. ft.) in H1                   in India with a 51% share, higher than last                       Others
                                                                                                                                                                                                                                               Mumbai                                  45                                         400                                                               -5%
mn sq. ft., recording an annual decline of about 48%.              2021, accounting for about 43.2% of the                       year’s 48% share during the same period.                          8%
                                                                   overall pie. Bengaluru witnessed the highest                  The Banking, Financial Services and                                                                           NCR-Delhi                               95                                          270                                                              -6%
                                                                   share of large deals at 51%, followed by                      Insurance (BFSI) occupiers’ share declined                         Technology occupiers continue
       Mumbai & Hyderabad tie at 3 spot withrd
                                                                                                                                                                                                                                               NCR-Gurugram                            45                                          140                                                              -3%
                                                                   Delhi-NCR and Hyderabad.                                      to 12.3% compared to 15% in H1 2020 as they                            to lead followed by BFSI.
         similar levels of absorption but the                                                                                    expanded cautiously. While Engineering
                                                                   Interestingly, small-sized occupiers                                                                                            While the share of tech companies           NCR-Noida                               50                                              80                                                           -9%
       annual decline is steeper for Hyderabad.                    (
Pune Market Watch Office - Savills
India Market Watch - Office – H1 2021                                                                                                                      India Market Watch - Office – H1 2021

                                                                                                                                                                                                                               Grade – A Office Stock & Vacancy
                                                                                                                                                                                                                                                                                                                          12.7%
                                                                                                                                                                                                                                                                                 10.5%
             PUNE OFFICE                                                                                                                                                                                                                       4.2%
                                                                                                                                                          PUNE                                                                                                                                               58.5
             MARKET UPDATE                                                                                                                                MARKET
                                                                                                                                                                                                                                      54.6
                                                                                                                                                                                                                                                                       54.9

                                                                                                                                                          OUTLOOK                                                                      2019                             2020
                                                                                                                                                                                                                                                                  Stock in mn sq. ft.     Vacancy in %
                                                                                                                                                                                                                                                                                                                 2021F

                                                                                                                                                                                                                               Source Savills India Research
                                                                                                                                                          DEMAND                                                               Note: The stock basket for 2020 has been modified to reflect Grade A buildings.

             Scan to Download                                                                                                                             On the back of successful vaccine administration
             WhatsApp version                                                                                                                             programme, we expect office market to show signs of
                                                                                                                                                                                                                               Office Absorption (mn sq. ft.) in Pune
                                                                                                                                                          recovery during the second half of 2021. Driven by
                                                                                                                                                          pre-commitments of 1.5 mn sq. ft. that are likely to get
                                                                                                                                                          absorbed during H2 2021, we expect Grade A gross                             6.8
PUNE’S KEY
                                                                                                                                                          absorption to triple from H1 2021. 2021 is expected to
                                                                                                                                                          conclude with an overall demand quantum equivalent to
                                                                                                                                                                                                                                                                            3.6                                   3.6
HIGHLIGHTS                                                                                                                                                that recorded in 2020.

Flexible workspace operators expanding
                                                                                                                                                          SECTORS                                                                     2019                                  2020                                 2021F
significantly: After a year of remote-working
since the pandemic began, the trend of ‘Work                                                                                                              We expect continued interest from Technology occupiers               Source Savills India Research

From Home’ and ‘Work From Anywhere’ has                                                                                                                   as well as flexible workspace operators and Engineering &
                                                                                                                                                          Manufacturing occupiers to drive office leasing demand
gained significance. The results of a survey
                                                                                                                                                          during H2 2021. Suburban micro markets of East and                   Average Rents (INR/sq. ft./month)
conducted by Savills India amongst occupiers                                                                                                                                                                                                                                                                             H1 2020
                                                                                                                                                          West as well as the CBD are likely to attract occupier
in Pune in March 2021 suggested that almost                                                                                                               attention due to expected infusion of quality supply                                                                                                           H2 2020
                                                                                                                                                                                                                                120
half (47%) of them foresee more than 40%                                                                                                                  offering large contiguous spaces.                                                                                                                              H1 2021
of their workforce to be working from a non-                                                                                                                                                                                    100
office location over the next 12-24 months.                                                                                                               RENT & VACANCY
Further, occupiers are also looking at workplace                                                                                                                                                                                 80
                                                                                                                                                          Grade A quoted rental values are likely to remain stable
options that offer them the flexibility to expand
                                                                                                                                                          across all micro markets in 2021. Amidst significant
or contract. Hence, to tap the opportunity,                                                                                                               supply infusion and recovery in leasing activity, we
                                                                                                                                                                                                                                 60
flexible workspace operators implemented their                                                                                                            expect the vacancy rate to hover around 11%-13% at the
expansion plans garnering a considerable 18%                                                                                                                                                                                     40
                                                                                                                                                          end of December 2021.
share in the overall Grade A leasing in the city
                                                                                                                                                                                                                                 20
during H1 2021. For reference, this was 7x times                                                                                                          SUPPLY
the absorption recorded during H1 2020, when
                                                                                                                                                          New supply of 2.9 mn sq. ft. is scheduled to be completed               0
the segment accounted for 1% share in overall                                                                                                             during H2 2021. This planned supply will likely be IT                         CBD              SBD East            SBD West            PBD East           PBD West
leasing.                                                                                                                                                  developments concentrated in the micro markets of SBD
                                                                                                                                                                                                                               Source Savills India Research
Significant pre-commitments: In the absence           LEASING AND                                  is deferred to later quarters due to slow              West (77%) and SBD East (23%).
                                                                                                   construction as a result of the pandemic-
of limited quality supply in completed buildings,     COMPLETIONS                                  induced lockdown, developers are also
occupiers requiring large spaces pre-committed
spaces to meet their expansion needs. During          Absorption: Pune witnessed Grade A           adopting a ‘wait and watch’ approach and are
H1 2021, the city witnessed 1.1 mn sq. ft. of pre-    gross absorption of 0.9 mn sq.ft. during     awaiting occupiers’ commitments to enable        MAJOR TRANSACTIONS H1 2021
commitments driven by Technology occupiers            H1 2021, registering a decline of 63% over   expedition of construction of the buildings
                                                      H1 2020. Majority (56%) of Grade A gross     in advanced stages of completion.                                                                                                                                                                         Transacted Area*
and flexible workspace operators mainly in the                                                                                                       Tenant                                             Micro market                                   Building
                                                                                                                                                                                                                                                                                                                  (sq. ft.)
micro markets of CBD and SBD West.                    absorption was concentrated in the micro
                                                      market of SBD East, followed by 23% in the   VACANCY RATE
                                                      CBD, 20% in SBD West and the remaining       Amidst muted gross absorption and supply          ADP                                                SBD East                                       Trion IT Park                                               250,000
KEY STATISTICS: H1 2021                               in PBD West.                                 infusion, overall vacancy levels in the city
                                                                                                   rose to 11.8% at the end of June 2021. The        Synechron                                          SBD East                                       EON Phase II                                                58,000
New Supply                      YOY change*           Sector Split: During H1 2021, technology
                                                                                                   increase in vacancy can be attributed to

0.7                             --
                                                      occupiers continued to dominate the                                                            Workday                                            CBD                                            Commerzone                                                  52,000
                                                                                                   considerable relocations by occupiers as well
                                                      leasing activity garnering a 68% share in
                                                                                                   as surrender of spaces amidst tough market        Red Bricks                                         CBD                                            Commerzone                                                  52,000
mn sq. ft.                                            Grade A gross absorption, followed by
                                                                                                   conditions.
                                                      flexible workspace operators accounting
                                                                                                                                                     Telstra                                            SBD West                                       Quadron Business Park                                       50,900
Gross Absorption                YOY change
                                                      for an 18% share.                            RENTS
0.9                             -63%                  Supply: Pune witnessed Grade A supply
                                                      infusion of 0.7 mn sq. ft. during H1 2021.
                                                                                                   City-wide Grade A quoted rental values
                                                                                                   remained stable at INR 74/sq. ft./month
                                                                                                                                                    PUNE MICRO MARKETS
                                                                                                                                                    CBD - Laxmi Road, Camp, Bund Garden, Boat Club, Koregaon Park, Dhole Patil Road, Pune Station, Shivaji Nagar, FC Road, JM Road, Wakdewadi, SB Road, Model Colony,
                                                                                                                                                          Ganeshkhind Road, Kalyani Nagar, Yerwada
mn sq. ft.                                            All the new supply was concentrated          at the end of June 2021. However, select         SBD East - Kharadi, Mundhwa, Nagar Road, Viman Nagar, Hadapsar, Kondhwa
                                                                                                                                                    SBD West - Aundh, Baner, Balewadi, Pashan, Kothrud, Karve Nagar, Khadki, Paud Road
                                                      in the micro market of SBD West, with        developers offered increased flexibility         PBD East - Phursungi, Wagholi, Charoli, Solapur Road, Saswad Road, Katraj
                                                      a 40:60 split between IT and non IT          leading to lower effective rents to attract as   PBD West - Hinjewadi, Wakad, Pimpri, Bhosari, Chinchwad, Bavdhan, Mulshi, Talawade, Tathawade, Nanded City, Pimple Saudagar
*No noticeable Grade A supply infusion took place
during H1 2020                                        developments. While partial supply           well as retain tenants.                          *Approximate and indicative areas only

savills.in                                                                 6                                                                                                                                                              7
Pune Market Watch Office - Savills
India Market Watch - Office – H1 2021                                                                               India Market Watch - Office – H1 2021

                        ANNEXURE:
                        KEY BUDGETARY
                        ANNOUNCEMENTS AND REAL
                        ESTATE IMPLICATIONS

                                                     PLI schemes                               Professionally managed                                                    Infra Push: 35%
                                                     of INR 2 Tn                               Development Financial                                                     allocation increase

                                                                                          01                                         02                                                                 03
                                                     • Major step for making India a          Institution; Debt route                                                   •P
                                                                                                                                                                           roposed building of 8,500
                                                        hub for manufacturing and              for REITs                                                                  kms of National Highways by
                                                        exports
                                                                                                                                                                          March 2022
                                                     • Key sectors: Pharma, Auto,             •B
                                                                                                 etter monetisation of real
                                                        Textiles, Electronics, Telecom          estate assets                                                            •A
                                                                                                                                                                           dditional 11,000 kms by
                                                        and Food products                                                                                                 March 2024
                                                                                               •E
                                                                                                 xpectation of greater
                                                     • Pharma one of the favourites:           participation by institutional
                                                        Local advanced pharmaceutical           investors
                                                        ingredient manufacturers
                                                        already received PLI approvals
                                                     • Sector specific parks to be set
                                                        up as well

                                                                                               Sector     Infra sector including                                         Sector     New RE development
                                                     Sector      Manufacturing &               Impact     Manufacturing, Logistics,                                      Impact     corridors Industrial &
                                                     Impact      Warehousing                              and Warehousing                                                           Logistics push

                                                     Disinvestment of land                     Affordable housing                                                    Speeding up stressed
                                                     and monetisation of                       focus and tax holiday                                                 asset resolution
                                                     non core PSU assets                       extensions

                                                                                          04                                         05                                                                06
                                                                                                                                                                    •N
                                                                                                                                                                      ew bad loan bank to be set up
                                                      • Model Tenancy Act approved
                                                                                               •T
                                                                                                 ax holiday extension and                                          •F
                                                                                                                                                                      aster revival or disposal of
                                                         to create inclusive rental
                                                                                                interest benefits on affordable                                      stuck projects in RE sector
                                                         housing market
                                                                                                housing home loans
                                                      • Stake sales of PSUs including
                                                                                               •B
                                                                                                 oost investor confidence in
                                                         banks and insurance
                                                                                                recently launched ARHC
                                                      • SPVs to monetise land owned            scheme
                                                         by PSUs
                                                      • Crucial land availability for
                                                         housing sector
                                                      • Favourable for Model-1 of
                                                         ARHC scheme

                                                     Sector        Affordable                  Sector        Affordable                                              Sector       Residential & Urban
                                                     Impact        Housing                     Impact        Housing                                                 Impact       Development

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India Market Watch - Office – H1 2021

   APPENDIX
   Glossary                                                                           incentivize private and public entities to develop such housing complexes
   Atma Nirbhar Bharat Scheme                                                         on their own available vacant land also.
   Atma Nirbhar Bharat schemes are COVID-19 specific relief packages (worth           Production Linked Incentives (PLI) Scheme
   approximately INR 29.87 trillion) announced in 2020 by the Government of           PLI Scheme aims to provide incentives to companies on incremental
   India, targeted at various sectors of the economy.                                 sales from products manufactured in domestic units to boost domestic
   Model Tenancy Act, 2021                                                            manufacturing. The scheme also aims to invite foreign companies to set
   Model Tenancy Act, 2021 aims to create an effective regulatory ecosystem           shops in India.
   in India to govern landlord-tenant relationship benefiting the urban middle        Integrated Goods & Service Tax (IGST)
   class, working professionals, students and floating population.                    Under GST, IGST is a tax levied on all Inter-State supplies of goods and/
   Affordable Rental Housing Complexes (ARHCs) Scheme                                 or services, governed by the IGST Act and tax will be shared between the
   It provides the guidelines for affordable rental accommodation targeted            Central and State Government.
   at migrant workers & urban poor. Under the scheme, existing vacant                                                                                                                                                                                                           Savills India provides services across office
                                                                                                                                                                  Savills                                                 Savills India
   government-funded housing complexes across major cities will be                                                                                                                                                                                                           leasing, project management, capital markets,
                                                                                                                                                                  Savills plc is a global real estate services provider      Savills India is a group company of Savills
   converted into ARHCs and offered to concessionaires for 25 years to rent                                                                                                                                                                                                  valuations, research, consulting, industrial and
                                                                                                                                                                  listed on the London Stock Exchange. We have an         Plc. and is a premier professional international
   out the units to urban poor and migrant workers. The government will                                                                                                                                                                                                      logistics, and residential services. Starting in
                                                                                                                                                                  international network of more than 600 offices and      property consulting firm. With full-service offices
                                                                                                                                                                  39,000 associates throughout the Americas, the          in Bengaluru, Mumbai, Delhi-NCR, Chennai,          India in 2016, the company employs over 350
                                                                                                                                                                  UK, continental Europe, Asia Pacific, Africa and        Pune and Hyderabad, the firm serves Occupiers,     professionals.
   Abbreviations & Acronyms                                                           IMF - International Monetary Fund                                           the Middle East, offering a broad range of specialist   Investors and Developers of Real Estate.
   BFSI - Banking, Financial Services and Insurance                                   mn. - Million                                                               advisory, management and transactional services
   bn. - Billion                                                                      MPC - Monetary Policy Committee                                             to clients all over the world.
   GDP - Gross Domestic Product                                                       MoSPI - Ministry of Statistics & Programme Implementation
   InvITs - Infrastructure Investment Trust                                           RBI - Reserve Bank of India
   INR - Indian Rupee                                                                 REIT - Real Estate Investment Trust
                                                                                      sq. ft. - Square Feet                                                       Research                                                Central Management                                 Regional Management
   INR per sq. ft. pm - INR per square foot per month
                                                                                                                                                                  Arvind Nandan                                           Anurag Mathur                                      Bhavin Thakker
   IT - Information Technology
                                                                                                                                                                  Managing Director                                       Chief Executive Officer                            Managing Director - Mumbai
                                                                                                                                                                  Research & Consulting                                   Savills India                                      Head - Cross Border Tenant Advisory
                                                                                                                                                                  arvind.nandan@savills.in                                anurag.mathur@savills.in                           bthakker@savills.in

   Key Definitions                                                                                                                                                Megha Maan                                              Kaustuv Roy                                        Sarita Hunt
                                                                                                                                                                  Director                                                Managing Director                                  Managing Director
                                                                                                                                                                  Research & Consulting                                   Business Solutions                                 Bengaluru
     Term                              Definition
                                                                                                                                                                  megha.maan@savills.in                                   kaustuv.roy@savills.in                             sarita.hunt@savills.in
                                                                                                                                                                  Suryaneel Das                                           Naveen Nandwani                                    Shweta Sawhney
                                       • Includes all constructed / completed buildings listings
     Stock/Inventory                                                                                                                                              Assistant General Manager                               Managing Director                                  Managing Director
                                       • This includes existing buildings plus new completions                                                                    Research & Consulting                                   Commercial Advisory & Transactions                 Delhi-NCR
                                                                                                                                                                  suryaneel.das@savills.in                                naveen.nandwani@savills.in                         shweta.sawhney@savills.in
                                       • New office buildings that have received their certificates of occupancy within the period                                Diksha Gulati                                                                                              Praveen Apte
     Supply
                                       • Buildings that have their structure ready and have occupier/s operating out of it or fit-outs are being carried out      Senior Manager                                                                                             Managing Director
                                                                                                                                                                  Research & Consulting                                   Media Queries                                      Pune
                                       • Sum of all leases including expansion, relocation and consolidations                                                     diksha.gulati@savills.in                                                                                   praveen.apte@savills.in
                                                                                                                                                                                                                          Nitin Bahl
     Gross absorption/Gross                                                                                                                                       Abhinav Pal                                             Director                                           Anup Vasanth
                                       • Does not include full-term renewals which are after the nine-year lease expiry
     Leasing/ Leasing activity                                                                                                                                    Manager                                                 Marketing, Sales and Strategy                      Managing Director
                                       • Includes leasing of entire tower by an occupier within an IT park/development                                            Research & Consulting                                   nitin.bahl@savills.in                              Chennai
                                                                                                                                                                  abhinav.pal@savills.in                                                                                     anup.vasanth@savills.in
     Average Rental Values/                                                                                                                                                                                                                                                  Sesha Sai
                                       • A fair estimation of asking rent and deal closure rent
     Rents                                                                                                                                                                                                                                                                   Managing Director
                                                                                                                                                                                                                                                                             Hyderabad
     Vacancy                           • Total vacant space as a percentage of Inventory/Stock                                                                                                                                                                               sesha.sai@savills.in

     Term                              International Definition                                                                                                   Gurugram                                                Mumbai                                             Bengaluru
                                                                                                                                                                  3-A, Second Floor, Building 9B                          403, Tower B, Level 4, The Capital                 15th Floor, SKAV SEETHALAKSHMI
     Crore                             • Ten Million (10,000,000)                                                                                                 DLF Cyber City, Phase 3                                 Street 3, G Block, Bandra Kurla Complex            Corporation No.21, Kasturba Road
                                                                                                                                                                  Sector 24, Gurugram 122002                              Bandra East, Mumbai 400 051                        Bengaluru 560001
                                                                                                                                                                  Haryana, India                                          Maharashtra, India                                 Karnataka, India
     Lakh                              • One Hundred Thousand (100,000)
                                                                                                                                                                  Chennai                                                 Pune                                               Hyderabad
                                                                                                                                                                  Savills, 5th Floor, North Wing                          WeWork Futura                                      Office No. 02A114, WeWork
                                                                                                                                                                  Harmony Square, New No. 48 & 50                         Magarpatta Road                                    Krishe Emerald, Hitech City
                                                                                                                                                                  Praksam Street, T. Nagar                                Pune 411 028                                       Hyderabad 500081
                                                                                                                                                                  Chennai 600017                                          Maharashtra, India                                 Telangana, India
                                                                                                                                                                  Tamil Nadu, India

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savills.in

Savills, the international real estate advisor established in the UK since 1855 with a network of over 600 offices and associates
globally.
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