Final Valuation Report L&T Worli December 2012

Pre-tax Re -valuation Report of a
Residential apartment Located in Worli, Mumbai

Prepared on behalf of
Larsen & Toubro Ltd.
December 2012
Contact Details:
TC2 Building, Gate No. 5,
Powai Works
Mumbai - 400072
Knight Frank India Private Limited

Paville House, Near Twin Towers,
Off Veer Savarkar Marg, Prabhadevi,
Mumbai - 400025
Pradeep Gandhi: pradeep.gandhi@in.knightfrank.com
KF Ref. No.MVL/603
Valuation Report Re - valuation of an apartment in Worli, Mumbai

Prepared on the behalf of Larsen & Toubro Limited December 2012
Executive Summary
The executive summary below is to be used in conjunction with the valuation report of which it
forms a part and is subject to the assumptions, caveats and bases of valuation stated herein
and should not be read in isolation
Client Name
Property Address
Turf View Apartment, Seth Motilal Sanghi Marg, Worli
Purpose of Valuation
Internal Reporting
Location
Mumbai
Description
Re-valuation of a residential apartment in Worli
Areas
Built-up Area 1665 sq. ft.
Tenure
Freehold
Tenancies
..
Valuation
Sales Comparison Approach
Valuation Date
21st December 2012
Market Value
54 Mn
MV Analysis
Valuers Details
Pradeep Gandhi, MRICS

Regional Head (West) Research & Advisory Services
*In our analysis, no allowances are made for any liability which may arise for payment of
Corporation Tax or Capital Gains Tax, or any other property related tax, whether existing or
which may arise on development or disposal, deemed or otherwise. No allowances are made in
our analysis for any expenses of realization, or to reflect the balance of any outstanding
mortgages, either in respect of capital or interest accrued thereon. All Valuations are given
without any adjustment for capital based Government grants received or potentially receivable
on the date of the analysis.

ii
Abbreviations& Measurements
Abbreviations
FSI
Floor Space Index
CBD
Central Business District
Indian Rupee
MCGM
Municipal Corporation of Greater Mumbai
Mn
Million
BEST
Bombay Electric Supply & Transport

Company
Nos.
Numbers
Q1
Quarter One
`/sq. ft.
Rupees per square feet
Q2
Quarter Two
Sq. ft.
Square Feet
Q3
Quarter Three
Sq. km.
Square Kilometre
Q4
Quarter Four
Sq. mt.
Square Metre
FDI
Foreign Direct Investment
GNP
Gross National Product
NPV
Net Present Value
GDP
Gross Domestic Product
TEUs
Twenty Foot Equivalent Units
CPI
Consumer Price Index
NA
Not Applicable
CRR
Cash Reserve Ratio
SLR
Statutory Liquidity Ratio
USD
United States Dollar
Measurements
1 acre
43,560 sq. ft.
1 mn
10 Lakh
1 sq. km.
100 Ha
1 sq. mt.
10.764 sq. ft.
1 hectare
2.47 Acre

iii
Table of Contents
Executive Summary ................................................................................................................. ii
Abbreviations& Measurements ................................................................................................ iii
1.
Instructions ......................................................................................................................... 2
1.1
Engagement of Knight Frank India Pvt. Ltd. ......................................................................... 2
1.2
Scope of enquiries and investigations................................................................................. 3
1.3
Basis of Valuation ............................................................................................................... 4
2.
Economic Snapshot: INDIA .................................................................................................. 5
2.1
Economic Indicators (As on 21st December 2012) ................................................................. 5
2.2
Real Estate Indicators .......................................................................................................... 5
3.
City Overview - MUMBAI....................................................................................................... 6
3.1
Salient Features Mumbai ................................................................................................... 6
3.2
Demographic and Employment Indicators ........................................................................... 7
3.3
Infrastructure of Mumbai ..................................................................................................... 9
4.
Real Estate Market CommentaryMumbai ......................................................................... 14
4.1
Residential Overview ......................................................................................................... 14
4.2
Supply and Absorption ...................................................................................................... 14
4.3
Prices ................................................................................................................................ 16
4.4
Outlook ............................................................................................................................. 17
5.
The Property ...................................................................................................................... 18
5.1
Property Description .......................................................................................................... 18
5.2
Site .................................................................................................................................... 19
5.3
Connectivity and Neighbourhood ...................................................................................... 19
6.1
Methodology ..................................................................................................................... 20
6.2
Valuation Bases ................................................................................................................ 20
6.3
Valuation Assumptions ..................................................................................................... 20
6.4
Valuation Analysis ............................................................................................................. 21
6.
Summary ........................................................................................................................... 27
7.
Disclaimer ......................................................................................................................... 28
Annexure I: Photographs ................................................................................................................ 29

Annexure II: General Principles and Limiting Conditions ................................................................ 31

iv
1.
Instructions
1.1
Engagement of Knight Frank India Pvt. Ltd.
1.1.1
Instructions
On the instructions received from Larsen & Toubro Ltd., Knight Frank (India) Pvt Ltd have been
appointed to re value the apartment located on the 2nd floor of a residential building known
as Turf View located in Worli, Seth Motilal Sanghi Marg, Mumbai 400018 with a built-up area
of 1,665 sq. ft.
1.1.2
Valuation Standard
The exercise has been carried out in accordance with the Royal Institute of Chartered Surveyors
(RICS) valuation standards, March 2012 edition.
1.1.3
Purpose of Valuation
The client has confirmed that the valuation report is required for the purposes of internal
reporting.
1.1.4
Conflict of Interest
We confirm that we have no conflict of interest in providing this report to the client, and that we
are acting as external valuers for the exercise.
1.1.5
Currency and Measurement
The currency used in the report for the analysis of the subject property is Indian Rupees (`). This
is the currency normally used for property transactions in India. All measurements are in sq. ft.
(1 sq.mt. = 10.764 sq. ft.) as this is the prevailing market practice in India.
1.1.6
Responsibility to Third Parties
Our valuation report is only for the use of our client and no responsibility is accepted to any
third party for the whole or any part of its contents.
1.1.7
Disclosure and Publication
Neither the whole nor any part of this valuation nor any reference thereto may be included in
any published document, circular or statement, nor published in anyway, without our prior
written approval of the form or context in which it may appear. If our opinion of values is

disclosed to persons other than the addressee of this report, the basis of the valuation should
be stated.
1.1.8
Limitations on Liability
No claim arising out of or in connection with this valuation report may be brought against any
member, employee, partner, or consultant of Knight Frank India Pvt. Ltd.
Knight Frank India Pvt. Ltd.s total liability to any direct loss or damage caused by the
negligence or breach of contract in relation to this instruction and valuation report is limited to
the amount specified in the terms of the engagement letter (if any). We do not accept any
liability for any indirect or consequential loss (such as loss of profit)
1.1.9
Vetting
The report has been vetted as per Knight Frank India Pvt. Ltd. quality assurance procedures.
1.2
Scope of enquiries and investigations
1.2.1
Inspection
We were instructed to carry out an inspection of the property. Our inspection of the property was
undertaken on 17th December 2012 by Ms Vidhi Wahi Post Graduate Diploma Business
Management (Finance).
1.2.2
Enquiries
In carrying out these instructions we have undertaken verbal / web based enquiries referred to
in relevant sections of the report. We have relied upon this information as being accurate and
complete.
1.2.3
Legal Parameters of Property
We have been provided with the following document

-
Photo copy of Sale Agreement of the property
It is recommended that the document is subject to formal legal inspection in order to ensure
that there are no elements, restriction or charges contained which are likely to have detrimental
effect upon the cash flows provided.

1.2.4
Environmental Aspects
For the purpose of this report we have assumed that the property is not subject to
environmental contamination. However, it is recommended that an appropriate consultant may
be engaged to confirm our assumptions. If the subsequent investigation identifies any
environmental contamination on the site our report may require revision.
1.2.5
Information Provided
As per the details provided by the client the built-up area of the flat is 1665 sq. ft. The parking
stated in the agreement is encroached by the society and is no longer available with the flat.
Society intimates an open car parking but no authentic documents are available. However a
verbal communication by society is made for providing an open car park. But since its a verbal
communication with no guarantee of being honoured we have not considered car park in this
valuation. This valuation of the subject property is carried out on the basis of the built up area
made available to us by the client.
1.3
Basis of Valuation
In accordance with your instructions, we have provided opinions on valuation of the project on
the following basis:
1.3.1
Market Value
The Market Value of the freehold interest in the property in its current physical condition is the
basis of valuation.
Valuation has been made on the assumption that the property is sold in the open market
without the benefit of a deferred term contract, leaseback, joint venture, management
agreement or any similar arrangement which would serve to alter the cash flow from the
Property.
No allowance has been made in our analysis for any charges, mortgages or amounts owing on
the Property or for any expenses or taxation, which may be incurred in effecting a sale. Unless
otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and
outgoings of an onerous nature, which could affect the analysis
1.3.2
Date of Valuation
The date of valuation is 21st December 2012.

2.
Economic Snapshot: INDIA
2.1
Economic Indicators (As on 21st December 2012)

Parameter
Value
GDP Growth Rate Q1 2012-13
5.50 %
Per Capita Income 2010 2011 ( current prices )
` 54,835
Inflation CPI September 2012
9.73 %
CRR and SLR
4.25% and 23.00%
Repo Rate
8.00 %
Bank Rate
9.00 %
Savings Bank Rate
4.00 %
Deposit Rate
8.50 % - 9.00 %
` / 1 USD
55.45
Risk Free Rate on Government Securities: 6.90 GS 2019
8.0907 %
Risk Free Rate on 91 day Government T Bill
8.1439 %
Source: MOSPI, RBI
2.2
Real Estate Indicators

Parameter
Value (`mn)
FDI Inflow in Construction Development: Townships, Housing,

Built-up Infrastructure (April 2011 March 2012)
Built-up Infrastructure (April 2010 March 2011)
Built-up Infrastructure (April 2012 August 2012)
152,360
75,520
32,650
Source: http://dipp.nic.in

3.
City Overview - MUMBAI
3.1
Salient Features Mumbai
Mumbai, the summer capital of Maharashtra, is the country's financial powerhouse and its
economic nerve centre. The city contributes almost 5% of Indias GDP and up to 40% of the GNP.
It is a multi-functional city with a vast array of economic opportunities, which has resulted in it
attracting a large migratory population from all over the country. The city is well connected to
international nodes by two ports and an international airport.
Located on a peninsula extending southwards from the mainland of Maharashtra it consists of

two distinct regions: Mumbai city district and Mumbai suburban district. The city district region
is also commonly referred to as the island city or South Mumbai.
The total area of Mumbai is 437 sq. km. with the island city spanning over 67.79 sq. km. and the
suburban district across 370 sq. km., administered by the Municipal Corporation of Greater
Mumbai.
Mumbai City
Source: Knight Frank Research

3.2
Demographic and Employment Indicators
The table below depicts some of the key statistics of the city:
Parameters
Value
Area
437 sq. km.

11,990,000 (Census 2001)
Total Population
12,480,000 (Census 2011)
Population Density (per sq. km.)
Mumbai Suburban: 20,925; Mumbai City: 20,038
Sex Ratio (Females per 1000 males)
Mumbai Suburban: 857; Mumbai City: 838
Literacy Rate
Mumbai Suburban: 90.90%; Mumbai City: 88.48%
Popular Languages
Hindi, English, Marathi
Source: MMRDA, Census of India 2011
Demographic Pattern
Greater Mumbai accounts for 11% of Maharashtras population and 1.03% of Indias population.
Greater Mumbai has witnessed a decline in the rate of population growth. The population
growth rate in Mumbai is still higher than that of Maharashtra.
Over the period of 1901-71, population in the island city increased steadily, soaring higher than
the suburbs. However, during the last four decades, population growth in the island city has
been negligible, while that of suburbs has been increasing exponentially. The graph below
indicates the increasing population of the suburbs in comparison to the island city.
Population (in mn.)
Population Growth Trend in Greater Mumbai

14.0
12.0
10.0
8.0
6.0
4.0
2.0
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011
Years
Island City
Suburbs
Total
Source: MMRDA, Census of India 2011

Socio Economic Scenario

The table below gives the classification of households in Mumbai with respect to the various
income groups:
Mumbai city
Income segment (per annum)
Island city
No. of
No. of Households
2,350,200
67%
303,200
42%
`300,000-500,000
436,800
12%
160,300
22%
` 500,001-1,000,000
369,800
11%
194,700
27%
>`1,000,000
348,000
10%
62,200
9%
3,504,800
100%
720,400
100%
<`300,000
Total
Households
(Source: Indicus Database 2009-10 Housing Skyline of India)

The following chart shows the proportionate number of households within each SEC category
based upon their income profiling:
100%
24%
80%
7%
5%
2%
9%
15%
15%
2%
8%
9%
3%
Greater than 1,500,001
12%
60%
18%
1,000,001-1,500,000
24%
95%
40%
72%
18%
500,001-1,000,000
78%
300,000-500,000
55%
Less than 300,000
20%
21%
0%
SEC A
SEC B
SEC C
SEC D
SEC E
(Source: Indicus Database 2009-10 Housing Skyline of India)

3.3
Infrastructure of Mumbai
Existing Infrastructure:
Project
Distance
Observations
Existing Arterial Road Network
It connects intersections of the Western Express Highway and S.V. Road
Bandra Worli SeaLink
at Bandra end and Khan Abdul Gaffar Khan Road at Worli. It has helped
5.6 km
in decongesting the traffic problems at Mahim junction for those

commuting between suburban locations and island city, reducing the
travel time between the two locations.
Western Expressway
25 km
Eastern Expressway
24 km
Sion Panvel Highway
25 km
Extending from Bandra to Dahisar, this 8 lane arterial road has been
enhancing the south-north connectivity in the city
This 6 lane arterial road between Sion and Thane provides the southnorth connectivity
This 8 lane road has been instrumental in providing the west-east
connectivity between Mumbai and Navi Mumbai
Existing Suburban Rail Network

ChurchgateVirar
60 km
CST Kalyan Kasara /
121 km /
Khopoli
115 km
CSTVashi Panvel
49 km
Thane Panvel
49 km
Crucial for south-north connectivity in the western zone, separate lines

for suburban trains provide excellent connectivity
This suburban rail network provides excellent south-north connectivity
of the city with the central suburbs
This suburban rail network provides connectivity between Mumbai and
Navi Mumbai
This suburban rail network provides connectivity with the satellite city of
Navi Mumbai
Existing Air & Water Network

~ Area of
Airport
1450
acres
Chhatrapati Shivaji International Airport (CSIA) is one of Indias busiest

airports having recorded passenger traffic of 29.07 million in 2010-11
with a growth rate of 14%. Currently CSIA has three domestic terminals
at Santa Cruz and two international terminals at Sahar in operation.
There are two principal ports: Mumbai Port Trust (MbPT) and Jawaharlal
Ports
Nehru Port Trust (JNPT). JNPT is the country's largest container port.
MbPT and JNPT handled 56.18 million tonnes and 65.75 million tonnes

Project
Distance
Observations
Existing Arterial Road Network
cargo traffic respectively in 2011-12. JNPT has a container terminal,
which has been developed through private investment on a BuildOperate-Transfer (BOT) basis.
(Source: Knight Frank Research)

Proposed Infrastructure Projects:
Project
Distance
Observations
Status
Expected Completion
Upcoming Arterial Road Network

This `96,300mn six - lane sea bridge is
expected to be the most significant link
between Mumbai and Navi Mumbai at
Mumbai Trans
Harbour Link
22 km
(MTHL)
Sewri
and
Nhava
respectively.
The
financial feasibility has been concluded.
Planned
Beyond 2017
The authority has shortlisted contractors

so that the work can be commissioned by
2013.
This project is expected to enhance the
connectivity of South Mumbai with eastern
suburbs and serve as an important link
road running parallel to the Eastern
Eastern
Freeway
Expressway. This freeway will begin at CST

16.8 km
and go up to Anik and further to Pajjarpol

and Ghatkopar. The real estate markets of
Under
Construction
2013
Chembur and Wadala are likely to be the

biggest beneficiaries on account of this
enhanced connectivity with the CBD and
South Mumbai
This
Multi-modal
Corridor (Virar
Alibaug)
`100
bn.
project
is
basically
broadening of the existing route of Virar140 km
Bhiwandi-Panvel-Pen-Alibaug.
corridor
will
primarily
enhance
This
Planned
Beyond 2017
the
connectivity at the periphery of the MMR

10
Project
Distance
Observations
Status
Expected Completion
and also with other cities by serving as a

link to important national highways that
link Mumbai to cities like Ahmadabad,
Delhi, Chennai and Bangalore. The land
survey work is in progress and Phase I
Virar-Chirner (Near JNPT) is expected to be
complete by 2017.
Upcoming Suburban Rail Network

The much needed west-east connectivity
Metro Rail
Phase I
(Versova
Andheri
through the MRTS will be addressed. This

11.40
km
Ghatkopar)
link
is
expected
connectivity
with
to
enhance
office
the
locations
of
Andheri like MIDC and SEEPZ. Construction
Under
construction
2013
work is in the advanced stage on this

phase with 12 stations on route.
Metro Rail
Phase II
(Charkop
Bandra
The west-east connectivity through this

31.90
km
Mankhurd)
(Wadala
pockets like Charkop and Oshiwara in the

western
suburbs
and
Chembur
Planned
Beyond 2017
and
Mankhurd in the central suburbs
Monorail
Phase I
MRTS is expected to benefit residential
This route will have 7 stations on route and

8.2 km
provide connectivity with locations like

Bhakti Park, BPCL colony and Chembur
Chembur)
Under
construction
2013
With 11 stations on route, this project is

expected to enhance connectivity in
Monorail
Phase II (Jacob
Circle
Wadala)
otherwise congested locations of Lower

12 km
Parel and Dadar. Although the financial
Planned
2016-17
feasibility is completed, the project work

will
be
commissioned
only
after
successful run of the Phase I

11
Project
Distance
Observations
Status
Navi Mumbai
Currently the region is connected through
suburban train
the JNPT road. However, this suburban
network
extension
train
32 km
(Nerul
network
connectivity
residential
Seawood
is
and
likely
prove
markets
like
to
enhance
beneficial
Ulwe.
to
The
Under
construction
Expected Completion
2016
construction work is in progress from the
Uran)
Seawood end and will extend up to Uran

The 11 elevated stations enroute this metro
rail network are expected to enhance
Navi Mumbai
connectivity within the Navi Mumbai zone.
Metro Rail
Phase I
11.10 km
(Belapur to
Residential pockets of Kharghar are likely
Under
to realise the maximum benefit on account
construction
2014
of the enhanced connectivity with the
Pendhar)
commercial hubs of CBD Belapur and

Taloja
This section with 7 stations will link Phase
Navi Mumbai
Metro Rail
Phase II and III
(Pendhar to
I
10.35
km
Khandeshwar)
at
Pendhar
and
stretch
up
to
Khandeshwar. On completion of this

phase, the residential micro-markets of
Planned
2016
Kalamboli, Kamothe and Khandeshwar are

likely to benefit by the connectivity with
CBD Belapur.
This `210 bn. two track elevated corridor is
expected to enhance the connectivity on
the Churchgate Virar section in the
Western
Elevated Rail
Corridor (Oval
Maidan
Virar)
western zone. While being a mass rapid

62.27
commute option, this train corridor will
Bidding
km
also provide comfortable travelling by
Stage
Beyond 2017
employing air conditioned train service.

This project is expected to benefit the
residential markets of peripheral western
suburbs beyond Borivali by enhancing

12
Project
Distance
Observations
Status
Expected Completion
their connectivity with the CBD of South

Mumbai and cross section of the Mumbai
Metro Phase I. The Rail Board has
approved the project and is currently at
the bidding stage which is expected to be
complete by early 2013.
Upcoming Major Infrastructure Project

In wake of the air travel demand from MMR
increasing from 29 mn passengers in
2010-11 to an estimated 119 mn in 2030-31,
this second international airport is being
developed in Navi Mumbai. While the
residential market has witnessed an
Navi Mumbai
International
Airport
enormous growth in anticipation of this

project, it will provide a major boost to the
Planned
Phase I by 2015
economy of the Navi Mumbai region with a

host of commercial activities that are likely
to come up. The project has secured the
Environmental Clearance in November
2010. Phase I is expected to have an
annual capacity of 10 mn passengers.
While various initiatives are anticipated to boost growth along different corridors, problems
such as delays in advancement of work due to various approvals required can be a hindrance. If
these primary problems are tackled more effectively, these infrastructure initiatives would
transform Mumbai from an overcrowded and increasingly polluted city to one that is not only a
global commercial hub but also a preferred residential location.

13
4.
Real Estate Market CommentaryMumbai
4.1
Residential Overview
Mumbai is the financial powerhouse that fuels the Indian economic growth engine and is
understandably the most active residential market in the country in terms of transaction
density. The global economic crisis of 2008 affected the market adversely as prices dipped in
some micro-markets at the premium end of the market. The prices rebounded in the subsequent
two years, scaling to their 2007 highs. These unaffordable prices have consequently caused
absorption numbers to fall consistently over the past 10 quarters as seen in the property sales
registrations data from the stamp and registration department of Maharashtra. Increasing
interest rates, liquidity pressures and regulatory bottlenecks have hurt market sentiment and
virtually put the brakes on the exponential price escalation.
4.2
Supply and Absorption
Currently the Mumbai Metropolitan Region (MMR) residential market can be divided into seven
micro-markets namely, the island city, western suburbs, central suburbs, Thane, Navi Mumbai,
peripheral western suburbs and peripheral central suburbs. The detailed break-up of regions
comprising each micro-market is shown below
Micro-Markets
Island city South and Central Mumbai
Location Covered
Regions of South and Central Mumbai from Dadar in Central
Mumbai to Colaba/Nariman Point in South Mumbai
Western suburbs
Bandra to Borivali
Central suburbs
Matunga to Mulund and Powai
Thane
Thane city including Ghodbunder Road
Navi Mumbai
Navi Mumbai from Airoli to Panvel
Peripheral western suburbs
Regions beyond Borivali
Peripheral central suburbs
Regions beyond Thane to Karjat/Khopoli and Kasara
The core of the residential market has been steadily shifting northward of the MMR over the
years as people are prepared to move further away from the CBDs to find an apartment that fits
their budget. This has prompted a flurry of construction activity in the peripheral suburbs to
accommodate this demographic shift. Residential units under construction are primarily
concentrated on the northern fringes of the Mumbai market.

14
The Mumbai real estate market has stagnated during FY 2012 as buyers have largely kept away
from the market expecting an imminent drop in prices in the near future. Absorption numbers in
FY 2012 are estimated to have dropped by more than 60% from its 2007 peaks and 35% from FY
2011. This steep drop in absorption levels should have resulted in a similar correction in prices.
However, a regulator imposed supply crunch through delay in approvals ensured that market
equilibrium was maintained.
Approximately 55,000 units were launched in FY 2012, down almost 40% from the 92,000 units
launched during FY 2011. Supply has also been constrained during FY 2012 as developers have
been actively delaying project launches and looking to liquidate current inventory before
launching any fresh product, to ease pressure on prices going forward.
Further, rising interest and other input costs such as land and labour in addition to the
increasing raw material costs like cement and steel have constrained developers from cutting
prices as they are already hard pressed to maintain their current operating margins of 30-35%.
The cost of land is by far the biggest factor that has stopped a developer from reducing prices
as the product prices have to be linked to the continuously increasing land prices.
As per Knight Frank Research, over the next couple of years, Mumbai residential space is
expected to witness completion of approximately 110,000 units. Supply of residential units in
the MMR residential market is
Supply Distribution
shown in the chart alongside.
MMR - Central Mumbai
1%
An analysis of the break-up of the

24%
upcoming supply in the MMR

market indicates that majority of
MMR - Central Suburbs
11%
MMR - Navi Mumbai
22%
MMR - Peripheral Central
Suburbs
19%
11%
the upcoming supply is expected
13%
MMR - South Mumbai
to be infused in the micro-market

of western suburbs accounting
MMR - Peripheral Western

Suburb
0%
MMR - Thane
MMR - Western Suburbs
for ~24% of the upcoming supply,

followed by Navi Mumbai region accounting for 22% of the overall supply.

15
4.3
Prices
Prices have been moving in a narrow range in the past four quarters as a virtual stoppage of
new launches over the past year constrained supply and cushioned prices from dropping in
spite of absorption levels steadily trending downward. Prices in premium micro-markets of
South and Central Mumbai locations like Parel, Lower Parel and Mahalaxmi, have declined close
to 10% over the previous three quarters while prices in Navi Mumbai, Thane and the peripheral
suburbs of Central & Western Mumbai have either been stable or have trended marginally
upward.
Developers in a bid to liquidate their higher priced inventory have been more open to
negotiation in the premium segment, reducing prices up to a maximum of 25% in favour of a
sizeable up-front payment.
We have also observed the number of cancellations increasing over the past few quarters. This
is symptomatic of a wary investors segment which is fast losing faith in the current scenario
where developers are hard pressed to even service their debt obligations.
Location wise price comparison

Location
Price - October 2012 (`/sq.ft.)
Price - October 2011 (`/sq.ft.)
Cuffe Parade
35000 71000
37000 62000
Malabar Hills
45000 76000
58000 66000
Napeansea Road
47000 74000
55000 70000
Mahalaxmi
21000 42000
20000 40000
Worli
25000 48000
25000 49000
Lower Parel
21000 38000
22000 39000
Prabhadevi
22000 45000
20000 42000
Bandra West
26000 42000
22000 42000
Andheri
12000 17000
9850 17000
Goregoan
9000 11500
8500 11500
Kandivali
9000 11500
8500 11500
Borivali
8500 13000
7500 13000
Mira Road
4500 5500
4400 5400
Virar
3500 4500
3200 4500
Naigon East
3000 3300
2900 3300
Vasai
3300 3700
3100 3500
Chembur
9500 15000
9000 15000
Bhandup
8000 9500
7500 9000
Mulund
8000 10000
7500 9500

16
Thane
6000 8700
5500 8700
Dombivali
3500 5000
3000 4000
Kalyan
3500 4500
3000 4200
Ambernath
2500 3800
2500 3800
Vashi
7000 10000
7000 10000
Airoli
6500 7200
6500 7200
KoparKhairane
6000 7500
6000 7500
Kharghar
4500 7500
4500 7100
Panvel
3300 6500
3200 6500
Source: Knight Frank Research
4.4
Outlook
The stagnant real estate prices today suggest a stalemate between buyers and sellers, but
market indicators strongly hint at an imminent inflection point. Project approvals that were
practically stalled in 2011, have started coming through again as the Development Control
Regulations were amended early this year. However, demand is likely to remain subdued due to
the prevailing uncertainty in the economy. The increase in inventories coupled with the ongoing
slack in absorption is expected to put downward pressure on prices.
Further, the rise in interest costs for the realty sector by 37% Y-O-Y in FY 2012 and decline in net
profits by 28% for the same period may compel developers to lighten their inventory load and
deleverage their balance sheets.

17
5.
The Property
The subject property is an apartment in a residential building called Turf View located on Seth
Motilal G Sanghi Marg, Worli. The access road of the subject property connects Worli Naka to
Haji Ali. On the ground floor of the building is the Vitesse showroom of cars. The neighbourhood
is pre-dominantly a high-end commercial locality.
(Source: Knight Frank Research, Google Maps)
5.1
Property Description
The subject property is a residential apartment located on the 2nd floor of a Ground + 5 storeys
residential building known as Turf View .The built-up area of the apartment is 1665 sq. ft. The
subject property for the purpose of this valuation exercise is an unfurnished apartment. The
subject building is a high end residential building with modern amenities. There are two wings
in the complex and each wing has one elevator for vertical movement.
The property description provided by the client is as follows:
Sr. No
1
Particulars
Area (In Sq. ft.)
Built-up Area
1665

18
5.2
Site
The major residential projects in the neighbourhood are Samudra Mahal, Raheja Anchorage
Eden Hall, Poonam Apartment and Sterling Seaface. Prominent commercial landmark buildings
located in the immediate vicinity are Nehru centre, BMW showroom, Deloitte office, and Hinduja
house. Prominent malls and entertainment centres in the vicinity is Atria Mall.
The property is surrounded at its boundary as follows:

Northern Side: National Sports Club of India
Southern Side: BMW showroom, Deloitte office and Novartis maintained Garden
Eastern Side: Jade Garden Hall and Nehru centre
Western Side: Tao Art Gallery
5.3
Connectivity and Neighbourhood
The subject property is conveniently located for surface commuting by automobiles, taxis, &
B.E.S.T. (city) buses. The property is conveniently located from civic amenities such as schools,
shopping area, ATMs, hospitals, colleges, recreation grounds and major business centres like
the Bandra Kurla Complex and commercial buildings in premium southern Mumbai localities of
Worli and Nariman Point.
Destination
Distance from the property (in km.)
Mahalaxmi Railway Station
3.0
Domestic airport
16.0
International airport
18.0
Bandra Kurla complex
12.0

19
6.
Valuation Analysis
6.1
Methodology
The method used for computing the market rent of the subject property is comparison method
under market approach.
Market Approach Comparison method

This method is applicable to all properties which are capable of being bought and sold in the
market. A comparison is made for the purpose of valuation with similar properties that have
recently been rented in the market and thus have a transaction price. The sales comparison
approach is the preferred approach when sales data are available.
Sales prices of comparable properties are usually considered the best evidence of market value
of the property being valued. Sales comparison method models the behaviours of the market by
comparing the property being appraised with similar properties that have recently been sold or
for which offers to purchase have been made. Comparable properties are selected for similarity
to the subject property considering attributes like age, size, shape, quality of construction,
building features, condition, design, gentry, etc. Their sale prices are then adjusted for their
difference from the subject property. Finally a market value for the subject property is estimated
from the adjusted sales price of the comparable properties.
6.2
Valuation Bases
The valuation base for the report is Market Value. Market Value is defined within RICS Valuation
Standards as:
"The estimated amount for which a property should exchange on the date of valuation between
a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein
parties had each acted knowledgeably, prudently and without compulsion."
6.3
Valuation Assumptions
Our valuation is based on a number of assumptions which have been drawn to your attention in
general principals and limited conditions (Annexure I), General assumptions (Annexure II), and
within this report

20
6.4
Valuation Analysis
We have been appointed to estimate the Market Value of an apartment measuring 1665 sq. ft. of
built up area, located on 2nd floor in a residential building known as Turf View. The valuation of
the subject property has been undertaken on the basis of the details provided by the client.
Details of the subject property are as follows:
Location
Flat no 23,Turf View
Worli, Seth Motilal
Sanghi Marg, Mumbai-
Area (sq. ft.)
2nd Floor flat in Ground +

5 storey residential
400013,
Built Up Area: 1665
building
For our valuation purpose, we carried out market survey and made enquiries in which we
attempted to find out from our market sources the recent lease transactions of similar
properties in the vicinity, which can be compared with the subject property. Our sources of
market survey and enquiries included:
Sub Registrars office
Real estate developers & brokers
During our market survey, we came across the following properties that have been transacted
and quoted from the various sources of our enquiries, as mentioned above, in the catchment
area of site in the vicinity
Comparable 1:
Comparable 1 is a 3 BHK apartment on the 1st Floor of the same building with built up area of
1665 sq. ft. It was sold in June 12 for ` 65 mn i.e. ` 39,039 per sq. ft. on built up area.
Comparable 2:
Comparable 2 is a 3 BHK apartment on the 3rd Floor of the same building with a built up area of
1665 sq. ft. It was sold in November 2011 for ` 62.5 mn i.e. ` 37,538 per sq. ft. on built up area.
Comparable 3:
Comparable 3 is a sea facing apartment on the 5th floor of a residential complex known as
Poonam Apartments. It is located on the Annie Besant road. Apartment built up area is 1000 sq.

21
ft. The said property is currently available for sale at quoted rate of ` 45 mn i.e. ` 45,000 per sq.
ft. on built up area.
Location Map of Comparable Properties
In order to estimate the market value of the subject property, premiums and discounts are
allocated to the comparable properties taking in to consideration certain of the parameters for
comparison. As per valuation standards, there are certain parameters to be used for such
comparisons. We have compared the subject property with the three comparable instances on
the following parameters:
Location (Sea View) This parameter defines the property location, unique
characteristics and features of the location, locational advantages. Better the location
better will be the demand of the property in the market and relatively higher would the

22
property command in terms of capital values in the region. Within the micro-market, it
was observed that properties having sea view exhibit a significant premium.
Access road This parameter differentiates the properties on the basis that properties
having main road frontage exhibit a discount.
Age and Maintenance of the Building - This parameter is simply the reflection of the
condition of the property. In the real estate market, properties well maintained
command premium.
Amenities, specification & Grade - This parameter differentiates the properties on the
basis of amenities available in the building. A building with amenities like lift, security
etc. gain advantage.
The above four parameters are the standard parameters of comparison used in valuation of
properties and they typically explain the property characteristics in the micro-market. Weights
are assigned to these parameters depending on their significance in evaluating the comparable
instances against the subject property.
Table comparing the comparable properties with the subject property is given below:
Parameter for
Comparison
C1 Turf View
The
Location (Sea
View)
property
is
located
in
same
Building
therefore
the
no
adjustment.
The
Access Road
property
is
in
same
Building
the
no
adjustment.
The
Age and
Maintenance of
the Building
property
is
in
same
Building
adjustment.
property
is
located
in
same
Building
therefore
the
no
The
property
is
located
in
same
Building
therefore
the
no
The
the
no
property
is
in
same
Building
adjustment.
comparable
enjoys sea view thus

discount
has
been
considered for subject
The comparable has

direct access from Dr.
Annie
Besant
road
thus
premium
has
been considered for

subject property.
located
therefore
The
property.
adjustment.
located
therefore
The
Apartments
adjustment.
located
therefore
C3 Poonam
C2 Turf View
the
no
The
comparable
is
located in fairly better

maintained
building
thus discount is been

considered

for
the
23
subject property
The
Amenities,
Specifications &
Grade
property
is
located
in
same
Building
therefore
adjustment.
the
no
The
property
is
located
in
same
Building
therefore
adjustment.
the
no
The
comparable
property
has
amenities
garden,
more
(like
children
playground etc.) thus

discount
considered
has
for
been
the
subject property.
Since comparable 2 were sold a year back we have provided a premium of 5% in capital value
considering the appreciation in the market since the time of transaction.

24
Estimation of the market value for the subject property by comparable method is given below:
Valuation of Apartment - Sales
Comparison Method
Comparables
Subject
Property
C1
Name of the property

Location
Turf View
Worli
C2
C3
Turf View
Turf View
Poonam
Apartments
Worli
Worli
Annie Besant Road
Month of Transaction
NA
Jun-12
Nov-11
NA
Transaction Structure
NA
Outright Sale
Outright Sale
Quote
Built-up Area (sq. ft.)
1665
1,665
1,665
1,000
Closed Car park
Open Car Park
Open Car Park
~29 year
~29 year
~17 years
Car Parking
Age of the building
Nil
~29 year
Total Amount (` mn)
NA
65.0
62.5
45.0
Car Parking Charges (` mn)
NA
2.0
1.5
1.5
Total Amount excluding Car Park (` /mn)
NA
63.0
61.0
43.5
Known Quoted / Transacted Price (` /

sq.ft.)
NA
37,838
36,637
43,500
Discount for Maximum Negotiation
NA
0%
0%
5%
Effective Rate excluding Car Park (` /

sq. ft.)
NA
37,838
36,637
41,429
C1
C2
C3
30%
0.0%
0.0%
-10.0%
Access Road
25%
0.0%
0.0%
5.0%
Age and Maintenance of the Building
20%
0.0%
0.0%
-2.5%
Amenities, Specifications & Grade
25%
0.0%
0.0%
-5.0%
Total
100%
0%
0%
-4%
37838
36637
39979
Parameter for Comparison

Location (Sea View)
Weightage
Effective (weighted average)

discount/appreciation
Property rate in comparison to the
comparable properties (` /sq.ft.)
Time Adjustment
Average appreciation / market correction
of property value from the point of
transaction (% per annum)
Material Date of Valuation
0%
21-Dec-2012
Time factor
Time adjusted rate (` / sq. ft.)
Average property rate (` / sq. ft.)
Built up Area of subject property (sq. ft.)
Market Value of the Subject property (`
Mn)
1.00
1.05
1.00
37838
38468
39979
38153
1665
63.5
All the comparable include car parking with them so we have deducted the car park cost from
the capital value. We have assumed an approximate value for open and closed parking
depended on the market. In market open car park is available at an average of ` 1.5 mn and
25
closed car park at ` 2.0 mn. To estimate the value we have considered an average of the two
transactions in the same building as that of the subject property. To give an upper limit of
capital value we have considered a quote of Poonam apartments, which is being adjusted on
various parameters as Poonam Apartment is a better residential complex. Thus the value of the
subject property is calculated at ` 38,153/sq. ft. with upper limit to be ` 39,979/sq. ft. Since the
probability to acquire a car park in society is also not available this will have a negative effect
on the marketability. To account of this negativity we enquired with local brokers and our inhouse residential team and came to know that such property will sell at a discount of 10-20%.
To be on the conservative side we had assumed an average of 15% discount.
Particulars
Built-up area
Estimated capital value
Market value
Unit
Value
sq.ft.
1,665
` per sq.ft
32,430
` mn
54
Estimation of the market value for the subject property by comparable method is given below:
As shown in the table above, the market value is `54 mn.

26
7.
Summary
On the basis of assumptions, methodology of valuation and on the belief that there are no
onerous restrictions, covenants or unusual outgoings, we are of the opinion that the achievable
market value of the subject property listed in the table below is fair and reasonable.
Location
Flat no 23,Turf View
Mumbai-400013,
Market Value
(` mn.)
2nd Floor flat in
Worli, Seth Motilal

Sanghi Marg,
Area (sq.ft.)
Ground + 5 storey
Built Up Area: 1665
54
residential building
For Knight Frank (India) Private Limited,
Pradeep K. Gandhi
MRICS, Regional Head (West) Research and Advisory Services
Abhishek Iyer
Lead Consultant Research and Advisory Services
Vidhi Wahi
Consultant Research and Advisory Services
Note:
Our analysis is only for use of the party to whom it is addressed and no responsibility is
accepted to any third party for the whole or any part of its content
27
8.
Disclaimer
The statements, information and opinions expressed or provided in this publication are
intended only as a guide to some of the important considerations that relate to property
investment. Although we believe they are correct and not misleading, with every effort having
been made to ensure that they are free from error, they should not be taken to represent, nor are
they intended to represent, investment advice or specific proposals, which must always be
reviewed in isolation due to the degree of uniqueness that will attach thereto.
Neither Knight Frank nor any persons involved in the preparations of this publication give any
warranties as to the contents nor accept any contractual, tortuous or other form of liability for
any consequences, loss or damage which may arise as a result of any person acting upon or
using the statements, information or opinions in the publication. This publication is
confidential to the addressee and is not to be the subject of communication or reproduction
wholly or in part.
Knight Frank (India) Private Limited

1st and 2nd Floor, Paville House
Off Veer Savarkar Road
Prabhadevi
Mumbai 25
Tel: (022) 67450101
Fax: (022) 67450202
www.knightfrank.com

28
Annexure I: Photographs
Present view of the Building
Building Entrance
Internal View of Living room
Internal View of Kitchen

29
View of the Building
View of the Building

30
Annexure II: General Principles and Limiting Conditions

General Principles Adopted and Limiting Conditions in the Preparation of Valuations and
Reports
These are the general principles and limiting conditions upon which our analysis and reports
are normally prepared; they apply unless we have specifically mentioned otherwise in the body
of the report.
1)
Confidentiality
Our analysis and reports are confidential to the client or to whom they are addressed for the
specific purpose to which they refer. They may be disclosed to other professional advisors
assisting the client in respect of that purpose, but the client shall not disclose the report to
any other party. No responsibility is accepted to any other party and neither the whole, nor
any part, nor reference thereto may be included in any published document, statement or
circular, or published in any way, nor in any communication with third parties, without our
prior written approval of the form and context in which it will appear.
2) Use of Report
The opinion on valuation expressed in this Report shall be used for the purpose stated in
this Report only. We are not responsible for any consequences arising from the valuation
being quoted out of context.
3) Source of Information
Where it is stated in the Report that information has been supplied by the sources listed,
this information is believed to be reliable and no responsibility is accepted should it prove
not to be so. All other information stated without being attributed directly to another party
is obtained from our searches of records, examination of documents or enquiries with the
relevant authorities. This Report has been prepared on the basis that full disclosure of all
information and facts which may affect the cash flow have been made known to ourselves
and we cannot accept any liability or responsibility in any event, unless such full disclosure
has been made.

31
4) Legal Title
Whilst we may have inspected the title of the property as recorded in the Register Document
of Title, we cannot accept any responsibility for its legal validity.
5) Town Planning and other Statutory Regulations

Whilst we may make verbal enquiries or gather information on Town Planning, we do not
normally carry out requisitions with the various public authorities to confirm that the
property is not adversely affected by any public schemes such as road and drainage
improvements. If reassurance is required, we recommend that verification be obtained from
your lawyers or other professional advisors.
Our analysis are prepared on the basis that the premises and any improvements thereon
comply with all relevant statutory regulations. It is assumed that they have been, or will be
issued with a Certificate of Fitness for Occupation by the competent authority.
6) Leases and Tenancies

Enquiries as to the financial standing of actual or prospective lessees or tenants are not
normally made unless specifically requested. Where properties are valued with the benefit
of lettings, it is therefore assumed that the lessees or tenants are capable of meeting their
obligations under the lease or tenancy and that there are no arrears of rent or undisclosed
breaches of covenant.
7) Development Agreements
Unless otherwise stated, no allowances are made in our analysis for any joint venture
agreement, development right agreement or other similar contracts.
8) Site Surveys
We have not conducted any boundary checks, however, we assume that the dimensions
correspond with those shown in the title document, certified plan or any relevant
agreement.
9) Structural Surveys
We have neither carried out a building survey nor any testing of services, nor have we
inspected those parts of the property which are inaccessible.
We cannot express an
32
opinion about or advice upon the condition of uninspected parts and this Report should not
be taken as making any implied representation or statement about such parts. Whilst any
defects or items of disrepair are noted during the course of inspection, we are not able to
give any assurance in respect of rot, termite or pest infestation or other hidden defects.
10) Site Conditions

We do not normally carry out investigations on the property or neighbouring land (including
the past and present uses) in order to determine the suitability of the ground conditions
(including contamination or potential for contamination) and services for the existing or any
new development, nor have we undertaken any archaeological, ecological or environmental
surveys. Unless we are otherwise informed, our analysis is on the basis that these aspects
are satisfactory and that, where development is proposed, no extraordinary expenses or
delays will be incurred during the construction period.
11) Deleterious or Hazardous Materials

No investigation was carried out to determine whether or not any deleterious or hazardous
materials have been used in the construction of the properties, or have since been
incorporated and we are therefore unable to account or report for such in our report.
12) Diseases and Infestations

Whilst due care is taken to note the presence of any disease or infestation, we have not
carried out any test to ascertain possible latent infestations or diseases affecting crops or
stock. We are therefore unable to account for such in our Report.
13) Outstanding Debts

In the case of buildings where works are in hand or have recently been completed, we do
not normally make allowance for any liability already incurred, but not yet discharged, in
respect of completed works, or obligations in favour of contractors, sub-contractors or any
members of the professional or design team.
14) Taxation, Encumbrances, Statutory Notices and Outgoings
Unless otherwise stated, no allowances are made in our analysis for any expense of
realization or for taxation which might arise in the event of a disposal, deemed or
otherwise. We have considered the property as if free and clear of all charges, lien and all

33
other encumbrances which may be secured thereon. We also assumed the property is free
of statutory notices and outgoings.
15) Attendance
The instruction and the estimation of cash flow assignment does not automatically bind us to
attendance in court or to appear in any enquiry before any government or statutory bodies in
connection with the analysis unless agreed when the instruction is given.

34
Annexure III: General Assumptions

We assume that information provided by client or its representative for this analysis for
all relevant projects is true and accurate. It includes details of measurements of land
and built up area, etc.
We have not gone through the legal aspects like documents of title deed, lease deed,
revenue records, court matters (if any), and documentation like joint development with
other companies. We also assume for this analysis that the title and development
rights of all the properties lies with the company and is clear, marketable and free of all
encumbrances, restrictions, easements or charges which may have detrimental effect
upon the cash flows of the property. It is also assumed that company has paid all
property related taxes.
We have neither carried out any soil testing nor structural surveys nor are we experts in
the field of structural survey. Therefore, we do not give any assurance that properties
are free from structural defect. If any investigation identifies any structural defect in the
property our report may require revision. Neither are we the experts in the town
planning to factor the town planning aspects in the project. Sewers, main services and
the roads giving access to the property have been provided.
We assumed that all the constructed structures and proposed construction is/will be
free from harmful materials and/or techniques. Our analysis is on the basis that no
such materials or techniques have been used.
Unless advised by the company or representative of the company, we do not normally
make allowance for any liability already incurred, but not yet discharged, in respect of
balance land cost, completed works, or obligations in favour of contractors,
subcontractors or any other professional.
We have assumed that demand; supply, pricing, fiscal and monetary policies of
Government, taste of public will remain same as on date of analysis over the period of
time of development. All of these factors are in strong relation with the cash flow
estimation of property. Any radical change in any of the factor may affect estimation at
large.
Unless advised by the company or representative of the company, no allowance is
made for any expense of realization or for taxation, which may arise in the event of a
disposal. The property is considered as if free and clears of all mortgages or other
charges that may be secured thereon.

35
For the purpose of this report we have assumed that the property is not subject to
environmental contamination. However, as we are not experts in this field, we
recommend that an appropriate consultant may be engaged to confirm our
assumptions.
If
the
subsequent
investigation
identifies
any
environmental
contamination on the site, our report may require revision.

36

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Pre-tax Re -valuation Report of a

Residential apartment Located in Worli, Mumbai

Knight Frank India Private Limited

Valuation Report Re - valuation of an apartment in Worli, Mumbai

Larsen & Toubro Ltd.

Turf View Apartment, Seth Motilal Sanghi Marg, Worli

Re-valuation of a residential apartment in Worli

Built-up Area 1665 sq. ft.

Sales Comparison Approach

21st December 2012

Pradeep Gandhi, MRICS

Valuation Report Re - valuation of an apartment in Worli, Mumbai

Floor Space Index

Central Business District

Municipal Corporation of Greater Mumbai

Bombay Electric Supply & Transport

Rupees per square feet

Foreign Direct Investment

Gross National Product

Net Present Value

Gross Domestic Product

Twenty Foot Equivalent Units

Consumer Price Index

Cash Reserve Ratio

Statutory Liquidity Ratio

United States Dollar

43,560 sq. ft.

10.764 sq. ft.

Valuation Report Re - valuation of an apartment in Worli, Mumbai

Engagement of Knight Frank India Pvt. Ltd. ......................................................................... 2

Scope of enquiries and investigations................................................................................. 3

Basis of Valuation ............................................................................................................... 4

Economic Snapshot: INDIA .................................................................................................. 5

Economic Indicators (As on 21st December 2012) ................................................................. 5

Real Estate Indicators .......................................................................................................... 5

City Overview - MUMBAI....................................................................................................... 6

Salient Features Mumbai ................................................................................................... 6

Demographic and Employment Indicators ........................................................................... 7

Infrastructure of Mumbai ..................................................................................................... 9

Real Estate Market CommentaryMumbai ......................................................................... 14

Residential Overview ......................................................................................................... 14

Supply and Absorption ...................................................................................................... 14

The Property ...................................................................................................................... 18

Property Description .......................................................................................................... 18

Connectivity and Neighbourhood ...................................................................................... 19

Valuation Bases ................................................................................................................ 20

Valuation Assumptions ..................................................................................................... 20

Valuation Analysis ............................................................................................................. 21

Annexure I: Photographs ................................................................................................................ 29

Valuation Report Re - valuation of an apartment in Worli, Mumbai

Engagement of Knight Frank India Pvt. Ltd.

Currency and Measurement

Responsibility to Third Parties

Disclosure and Publication

Valuation Report Re - valuation of an apartment in Worli, Mumbai

Scope of enquiries and investigations

Legal Parameters of Property

We have been provided with the following document

Photo copy of Sale Agreement of the property

Valuation Report Re - valuation of an apartment in Worli, Mumbai

The date of valuation is 21st December 2012.

Economic Snapshot: INDIA

Economic Indicators (As on 21st December 2012)

GDP Growth Rate Q1 2012-13

Final Valuation Report L&T Worli December 2012

Final Valuation Report L&T Worli December 2012