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Office Property Market Overview

INDIA
April - 2015

Contents

Marco Economic Overview

Mumbai Office Market Overview

Delhi Office Market Overview

Gurgaon Office Market Overview

NOIDA Office Market Overview

10

Chennai Office Market Overview

12

Bengaluru Office Market Overview

14

Kolkata Office Market Overview

16

Pune Office Market Overview

18

Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
India | Office
April 2015

Office demand set


to improve
The Indian economy continued to see positive trends, with
Business Confidence Index marginally up by 20 basis points
in January 2015. Indias GDP recorded a 7.5% growth in the
October - December 2014; and the forecast is for the GDP
to expand by 7.8% in January to March 2015 quarter. In
addition, the WPI (Wholesale Price Index) inflation reached
its 10-year low at -2.06% in February 2015.
Both the economy and the office market turned the corner
in 2014 and are poised for further improvement in 2015.
For the commercial real estate sector, 2015 witnessed a
good start, with first quarter office absorption of 8.5 million
sq ft in the eight major metro cities in India, headed by
Bengaluru (3.82 million sq ft, including 1.74 million sq ft
pre-committed), NCR-Delhi, Gurgaon and NOIDA (1.48
million sq ft), Mumbai (1.33 million sq ft), Pune (0.89
million sq ft), Chennai (0.81 million sq ft) and Kolkata (0.22
million sq ft).
Office space absorption increased by 2.8% from last
quarter. Tenants from IT / ITeS and BFSI were the primary
sectors driving this demand. Within IT / ITeS, E-commerce
companies took up 52% of the total space absorbed. Select
micro markets in cities like Bengaluru, Mumbai and Noida
witnessed marginal increase in rental values in the range of
1% 3% QoQ.

Colliers View
With an expanding economy, improving business sentiment
and increasing job creations, the momentum in demand for
office real estate is expected to stay. In response to tenant
demand, the strongest markets (namely Bengaluru and
Gurgaon) will witness development of new stock. However,
developer sentiment towards speculative construction of
office buildings is expected to remain cautious, and this in
turn will limit the risk of further overbuilding.

Economic Barometer
Indicators

4Q 2014

1Q 2015

7.50%

7.80%1

56.20%

56.40%

Repo Rate

8.00%

7.50%

Reverse Repo Rate

7.00%

6.50%

Cash Reserve Ratio

4.00%

4.00%

0.11%

-2.06%

10.00% - 10.30%

10.00% - 10.25%

8.00% - 9.05%

8.00% - 8.75%

4Q 2014

1Q 2015

INR - USD

63.33

62.36

INR - EURO

77.00

66.48

Gross Domestic
Product
Business
Confidence Index

Ination (WPI)

Prime Lending Rate


Deposit Rate3
Exchange Rates

Return on Alternative Investments


4Q 2014

1Q 2015

QoQ
CHANGE

Gold

26,507

26,232

-1.04%

Silver

35,999

36,983

2.73%

Equity
(BSE Sensex)

27,499

27,957

1.67%

1,555

1,692

8.77%

Parameters

Realty Index

Note:
Estimates as per International Monetary Fund
Wholesale Price Index (WPI)
SBI interest rate < INR 1 crore Term Deposits for 1 Year

Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
Mumbai | Office
April 2015

Increasing demand
trend led by IT/
ITeS occupiers
Office absorption in Mumbai increased by 9% QoQ, from
1.22 million sq ft in 4Q 2014 to 1.33 million sq ft in 1Q 2015.
The IT/ITeS sector dominated the citys office absorption
with over 57% (0.75 million sq ft) of the total absorption,
followed by BFSI with 0.38 million sq ft (28%) and pharma
with 0.07 million sq ft (5%). The maximum number of office
transactions were concluded in the western suburbs (0.54
million sq ft) including BKC, Andheri, Malad and Goregaon,
followed byNavi Mumbai (0.39 million sq ft), and the central
suburbs (0.25 million sq ft) including Vikhroli, Powai and
Kanjurmarg. This rise in demand is largely attributed to an
increase in the confidence of occupiers regarding overall
business growth in India and abroad.
In major office transactions during the quarter, E-clerx
took about 0.2 million sq ft in Mindspace SEZ by K Raheja
Corp located in Navi Mumbai. Other major deals included,
Housing.com and Edelweiss, took up 0.13 and 0.10 million
sq.ft. at Nomura by Hiranandani at Powai and Kohinoor City
by Kohinoor Group at Kurla, respectively.
1Q 2015 witnessed new supply of 0.6 million sq ft. The
projects accounting for this new supply were 0.2 million sq
ft of Lodha Supremus (located in I-Think Campus) by Lodha
Group; and 0.4 million sq ft of Century Greenspan (located
in Worli) developed by Century, an Aditya Birla Group
company. No new project was launched during the quarter
as developers were focusing to complete their existing
ventures, about 7.7 million sq ft of Grade A office supply is
available for fitout in Mumbai, among which majority of the
supply is located in the western suburbs (47%) including
BKC, Andheri (E), Malad and Goregaon/JVLR, followed by
Central Mumbai (16%) including Worli, Prabhadevi and
Lower Parel.

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD**

200 - 230

5%

-7%

Worli/Prabhadevi

185 - 225

0%

2%

Lower Parel

145 - 190

0%

4%

BKC

225 - 320

0%

0%

Kalina

150 - 200

0%

-9%

Goregaon / JVLR

100 - 110

0%

10%

Andheri East

80 - 130

0%

-3%

Malad

80 - 100

0%

5%

Powai

120 - 130

4%

13%

Navi Mumbai

60 - 100

0%

22%

Thane / LBS

60 - 110

0%

13%

*Indicative Grade A rents in INR per SF per month


**Nariman Point, Ballard Estate & Fort

Research & Forecast Report | April 2015 | Colliers International

2.50
2.00
1.50
1.00

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

Average Rental And Capital Value Trend


30,000

Forecast

250

25,000

200

20,000

150

15,000

100

10,000

50

5,000

1Q 2017F

1Q 2016F

1Q 2015

1Q 2014

1Q 2013

1Q 2012

1Q 2011

1Q 2010

0
1Q 2008

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

E-clerx

Mindspace SEZ

Housing.com

AREA (SF)

LOCATION

LEASE / SALE

200,000

Navi Mumbai

Lease

Nomura

130,000

Powai

Lease

Edelweiss

Kohinoor City

100,000

Kurla

Sale

L&T infotech

Mindspace SEZ

90,000

Navi Mumbai

Lease

Capegemini

Gigaplex

85,000

Navi Mumbai

Lease

AREA (SF)

LOCATION

POSSESSION

Key Under Construction Projects


BUILDING NAME

DEVELOPER

Seawood Grand Central Tower


I & II

L & T Infrastructure

1,350,000

Navi Mumbai

2015

Godrej BKC

Godrej Group

1,200,000

BKC

2015

Kohinoor Square

Kohinoor Group

800,000

Dadar

2015

Notes:
1. Office Market: The major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra Kurla
Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur Shastri Marg are
emerging as new office and IT/ITES submakets.
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

Research & Forecast Report | April 2015 | Colliers International

Captial Values INR Per SF

300
Rental Values INR Per SF Per Month

For the last 4 consecutive quarters, there has been an


increase in the absorption of office real estate. This is likely
to continue on the back of an improving economy and
demand from IT/ITeS and BFSI sectors. The markets are
also witnessing a clear price segmentation with tenants
being less price sensitive in prime markets like CBD and
BKC. Developers are however averse to adding new stock
on speculative basis. These factors in the long run will result
in an upward pressure on rentals due to diminishing gap
between supply and demand.

4Q 2013

Colliers View

3Q 2013

1Q 2013

0.00

2Q 2013

0.50

1Q 2009

The New Development Plan of Mumbai 2014-34 was


unveiled by the MCGM (The Municipal Corporation of
Greater Mumbai). Development Plan 2034, which will
remain in place for 20 years, has suggested taking an areawise view on FSI, which may range from a minimum 2.5
to as much as 8 for areas closer to transport hubs (railway,
metro stations, etc.) or business districts.

Quarter Wise Absorption

Million Sq.ft

Despite a rise in demand, rental values remained


unchanged in most of the micro markets, except in CBD
and Powai where rents rose by 4% to 5% QoQ. Capital values
remained stable in all of the micro markets.

Research &
Forecast Report
Delhi | Office
April 2015

Absorption
declined due
to shrink in
transaction size
Delhi grade A office leasing market in 1Q 2015 saw an
absorption of only 0.11 million sq. ft. Manufacturing sector
companies took about 34% (0.03 million sq ft) of this total
absorption followed by BFSI 19% and IT/ITeS 18%. Majority
of the transactions were concluded in CBD (Connaught
Place) (0.03 million sq ft) followed by Saket (0.02 million sq
ft) and Jasola (0.01 million sq ft).
There was also demand from Government and media sector
for small office space primarily in Central Delhi micro
markets. Major transactions during the quarter include the
lease of 14,000 sq ft office space by Anchor in TDI Tower at
Jasola, 13,000 sq ft by SMCC Construction in Salcon Rasvilas
at Saket and the lease of 10,000 sq. ft. by Motilal Oswal in
Tolstoy House located at Connaught Place.

City Office Barometer


INDICATORS

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD**

185 - 450

0%

2%

Nehru Place

180 - 225

1%

1%

Saket

140 - 190

0%

-6%

Jasola

95 - 130

0%

0%

NSP***

65 - 75

0%

0%

*Indicative Grade A rents in INR per SF per month


**Connaught Place
***Netaji Subhash Place

The average transactions size in 1Q 2015 was around 6,000


sq ft which is lesser than the previous quarter average of
over 35,000 sq ft. This is the primary reason for overall lower
absorption numbers.
During the quarter approximately 0.14 million sq. ft. of
office space was added to the office market in Delhi. Key
projects contributing to this supply were commercial tower
on plot 2B by HT Group and commercial tower on plot 32B
by an Individual developer both located on Pusa Road and
Business Tower by Nagpal Builders located at Okhla Phase
II.

1Q 2014

Research & Forecast Report | April 2015 | Colliers International

No new commercial grade A office space were launched


this quarter. Rents in Delhi remain stable in 1Q 2015 across
all the micro markets. There was a marginal increase of 1%
QoQ in Nehru Place. Similarly capital values were remained
stable across all the micro markets.

Quarter Wise Absorption


0.80
0.70
Million Sq.ft

0.60

As the economy expands, we expect improvement in overall


leasing in coming quarters. However, the demand will
primarily come from the companies looking to locate near
Government offices. Less supply addition due to limited
land availability will keep the overall rents stable however
select premium building will continue to command
premium above market rates.

0.40
0.30
0.20

1Q 2015

4Q 2015

3Q 2014

2Q 2014

1Q 2014

4Q 2013

3Q 2013

0.00

2Q 2013

0.10
1Q 2013

Colliers View

0.50

Average Rental And Capital Value Trend


40,000

Forecast

30,000
200

25,000

150

20,000
15,000

100

10,000
50

5,000

Captial Values INR Per SF

35,000

250

1Q 2017F

1Q 2016F

1Q 2015

1Q 2014

1Q 2013

1Q 2012

1Q 2011

1Q 2010

1Q 2009

0
1Q 2008

Rental Values INR Per SF Per Month

300

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

Anchor

TDI Tower

SMCC Construction

AREA (SF)

LOCATION

LEASE / SALE

14,000

Jasola

Lease

Salcon Rasvilas

12,500

Saket

Lease

Motilal Oswal

Tolstoy House

10,000

Connaught Place

Lease

JDSU

Infotech Park

9,348

Dundahera

Lease

Reliance Corporate IT Park

Gopal Das Building

8,250

Connaught Place

Lease

Key Under Construction Projects


BUILDING NAME

DEVELOPER

AREA (SF)

LOCATION

POSSESSION

RPS Infinia

RPS Developer

1,000,000

Mathura Road

2015

NBCC Plaza

NBCC Ltd.

350,000

Okhla

2015

Caddie Commercial Tower

Caddie Hotel

100,000

Aerocity

2015

Notes:
1. Office Market: The commercial areas in New Delhi can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola
and Saket .
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
Gurgaon | Office
April 2015

Absorption dips
marginally by 6%
QoQ but solid
pipeline for 2Q
Gurgaon commercial real estate market remained active
in the first quarter of 2015. The citys office absorption
was recorded at approximately 1.12 million sq ft, which is
about 6% lower than that of the previous quarter. IT/ITeS
and BFSI with 47% and 25% share, respectively were the
prime contributors to this demand. Apart from this, media
and entertainment, manufacturing, pharma, FMCG and
engineering sectors also leased large office spaces during
the quarter. A few notable transactions this quarter were the
0.12 million sq ft office lease by Ernst & Young in Unitech
Cyber Park located at Sector 39, 0.10 million sq ft by Arvato
in JMD Megapolis located at Sector 48 and 0.08 million sq ft
by Boston Consulting in Bestech Business Park located on
Sohna Road.
At the end of the quarter, the total available office supply
stood at 16 million sq ft. Areas with the highest available
supply were Golf Course Road Ext / Sohna Road (30%),
Manesar (25%), National Highway 8 (15%), Udyog Vihar
and Industrial Sectors (14%) and Golf Course Road (9%).
The city witnessed the completion of three small projects
this quarter, namely, Spaze Palazo (0.25 million sq ft) by
Spaze Group at Sector 69, JMD Empire (0.18 million sq ft)
by JMD Group at Golf Course Extension Road and Legends
Heights (0.25 million sq ft) by ILD at National Highway
8. Given the large vacant stock, developers continued to
refrain from adding speculative supply. Only Earth Group in
collaboration with AMB Group launched Earth SKY GATE at
Sector 88. It is a mixed-use development project of about 1.5
million sq ft, which will have retail, commercial, bank space
and restaurant components.

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

MG Road

100 - 145

0%

7%

DLF Cyber City (IT)

90 - 100

0%

20%

Golf Course Road

55 - 80

0%

17%

55 - 95

0%

20%

55 - 80

0%

17%

National Highway 8

50 - 150

0%

14%

Udyog Vihar &


Industrial Sectors

30 - 45

0%

-12%

Manesar

40 - 45

0%

4%

Institutional Sectors
(Sec 44, 32, 18)
Golf Course Road
Ext./Sohna Road

*Indicative Grade A rents in INR per SF per month

Research & Forecast Report | April 2015 | Colliers International

2.00
1.60
1.20
0.80

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

4Q 2013

3Q 2013

Average Rental And Capital Value Trend


14,000

Forecast

120

12,000

100

10,000

80

8,000

60

6,000

40

4,000

20

2,000
1Q 2017F

1Q 2016F

1Q 2015

1Q 2014

1Q 2013

1Q 2012

1Q 2011

1Q 2010

0
1Q 2008

Captial Values INR Per SF

140
Rental Values INR Per SF Per Month

With the number of RFPs floating in the market, we


anticipate an increase in office absorption in the near future.
The Udyog Vihar and Institutional sectors will continue to
remain the most preferred office locations due to location
advantages and competitive rents. Rents are expected to
remain on the same levels due to the high vacancy levels
and robust under-construction developments in the
pipeline, especially in micro markets, such as the Southern
Peripheral Road and Golf Course Extension Road, in the
coming quarters.

1Q 2013

0.00

Colliers View

2Q 2013

0.40

1Q 2009

On the infrastructure front, the new state Government has


scrapped the decision to terminate the Kundli-ManesarPalwal (KMP) Expressway project, and instead has injected
fresh funds to the tune of INR 1,200 crores for completion
of the project. This project will be taken over by the Ministry
of Transport from Haryana Industrial and Infrastructure
Development Corporation (HSIIDC).

Quarter Wise Absorption

Million Sq.ft

Rents and capital values in Gurgaon remained stable in 1Q


2015 across all the micro markets due to the large available
supply and low absorption witnessed during the quarter.

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

AREA (SF)

LOCATION

LEASE / SALE

Ernst & Young

Unitech Cyber Park

125,000

Sector 39

Lease

Boston Consulting

Bestech Business Park

80,000

Sohna Road

Lease

Nagarro

Tower of Arc

70,000

Udyog Vihar

Lease

HSBC

Plot No. 80

67,000

Udyog Vihar

Lease

TCS

Vatika Business Park

62,000

Sohna Road

Lease

AREA (SF)

LOCATION

POSSESSION

Key Under Construction Projects


BUILDING NAME

DEVELOPER

Business Club

AIPL

700,000

Golf Course Extension


Road

2015

Parsvnath IT Park Technicia

Parsvnath Developers

695,000

Sohna Road

2015

Unitech Infospace, Gurgaon


Phase 2 Building 7

Unitech

450,000

NH-8

2015

Notes:
1. Office Market: The prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as
the citys new office destination.
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
NOIDA | Office
April 2015

Absorption
declined in 1Q
2015, despite few
large transactions
The NOIDA office market witnessed a major downturn
this quarter, in terms of absorption. The office market
witnessed about 0.5 million sq ft of office absorption, which
is almost half of 4Q 2014s absorption figure of 1 million
sq ft. Expansion and relocation were the primary demand
drivers this quarter. IT / ITeS continued to be the dominant
sector leasing office space in NOIDA. There was also some
demand from manufacturing companies who leased smaller
office spaces in locations like Sector 62 and 59. The most
significant leasing transaction for 1Q 2015 took place in
Institutional Sector 62, with Kronos leasing 70,000 sq ft in
Okaya Blue. Jubilant Industries signed a 67,000-sq ft lease
at Logix Technopark and Lava Mobile took 60,000 sq ft in a
stand-alone building in Sector 58.
The construction scenario showed signs of improvement,
and the city witnessed the completion of over 1.3 million sq
ft of prime office space. The projects that were completed
this quarter include World Trade Tower by Sapphire Group
measuring over 1 million sq ft and located in Sector 16 and
Stellar Business Park (0.24 million sq ft) by Stellar Group
located in Sector 135 (Expressway).

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

Commercial
Sectors**
Institutional
Sectors (Non IT)***
Institutional
Sectors (IT)***
Industrial Sector
(IT)****

RENTAL
VALUE*

% CHANGE
QoQ
YoY

90 - 110

-2%

3%

55 - 110

3%

18%

45 - 65

5%

5%

35 - 55

5%

15%

*Indicative Grade A rents in INR per SF per month


**Sector 18
***Sector 16A, 62, 125-142
****Sector 124, 57-60, 63-75

At present, approximately, 13 million sq ft of Grade A office


space is available for lease or sale in the NOIDA office
market. Approximately 51% of this vacant stock is located
in Institutional Sectors, including locations like Sector 16A,
Sector 62 and Sectors 125 to 142. About 48% is available in
the Commercial Sector (Sector 18). Overall rise in vacancy

10 Research & Forecast Report | April 2015 | Colliers International

1.20
1.00
0.80
0.60

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

0.00

4Q 2013

We anticipate an increase in absorption in the coming


quarters in sectors along NOIDA expressway and Sectors 62
to 65. In the Institutional Sectors, demand will be primarily
from midscale IT / ITeS companies, whereas NOIDA
expressway will see demand from large corporations. An
upward pressure on rents is expected in the Institutional
Sectors due to limited supply addition. Meanwhile, other
markets will remain stable.

3Q 2013

0.20

1Q 2013

Colliers View

2Q 2013

0.40

Average Rental And Capital Value Trend


14,000

Forecast

10,000

60
50

8,000

40

6,000

30

4,000

20

2,000
1Q 2017F

1Q 2016F

1Q 2015

1Q 2014

1Q 2013

1Q 2012

1Q 2011

10

Captial Values INR Per SF

12,000

70

1Q 2010

Rental Values INR Per SF Per Month

90
80

1Q 2009

In a major office sale transaction, Kotak Mahindra Group


and private equity fund New Vernon Capital Llc. have jointly
bought Green Boulevard, an information technology (IT)
park at Noida in the National Capital Region for Rs 270
crore from 3C Company. The property is about 700,000 sq ft
located in Sector 62.

Quarter Wise Absorption

Million Sq.ft.

levels was noticed during the quarter due to less absorption


and addition of new supply.

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

AREA (SF)

LOCATION

LEASE / SALE

Kronos

Okaya Blue

70,000

Sector 62

Lease

Jubilant Industries

Logix Techno Park

67,000

Expressway

Lease

Lava Mobile

Individual Building

60,000

Sector 58

Lease

Genpact

Stellar 135

60,000

Expressway

Lease

Oxford

Stellar IT Park

20,000

Sector 62

Lease

Key Under Construction Projects


BUILDING NAME

DEVELOPER

AREA (SF)

LOCATION

POSSESSION

Delhi One

The 3C Company

2,000,000

DND Flyway

2015

Mist Avenue

Bhasin Group

1,000,000

Sector 143

2015

Assotech Business Cresterra

Assotech

500,000

Sector 135

2015

Notes:
1. Office Market: NOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and125-142,
industrial sectors include Sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

11 Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
Chennai | Office
April 2015

IT/ITeS remains
the prime driver
with 53% of total
absorption
Chennai 1Q 2015 absorption stood at 0.8 million sq ft as
compared to the previous quarters 1.33 million sq ft. The
IT/ITES sector accounted for 53% of the total absorption
followed by manufacturing at 17% and pharma at 16%.
The BFSI, engineering, FMCG, media & entertainment and
logistics sectors were also represented in the deals closed
during the period. Approximately 50% of total absorption
was in the CBD followed by OMR (16%) and Ambattur
(11%). Notable transactions include the Income Tax
Department taking the entire BSNL Building of 0.19 million
sq ft located in the CBD. Apart from this, Ford took 0.06
million sq ft in SP Infocity at OMR and Bank Bazaar took
0.05 million sq ft in India Bulls located at Ambattur.
Cautious market sentiments restricted the new supply to
only 0.40 million sq ft. Projects contributing this supply
were Lalah Tower (0.28 million sq ft) by Ramaniyam on
Nelson Manickam Road; Sri Balaji Complex (0.06 million
sq ft) by Shanthi Builders at Royapettah; and AGR Platina
(0.05 million sq ft) by an independent developer at
Ekkaduthangal. The total available supply for lease / fitout stood at 10.7 million sq ft. By micro-market, OMR (IT
corridor) accounted for 34% of this total available supply,
followed by Ambattur 28% and the CBD 27%. No new
projects / parts of projects were launched in Chennai during
the quarter. Lack of new completed supply has led to a
decline in vacancy rates especially on the OMR stretch.

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD

60 - 80

0%

0%

Guindy

50 - 60

0%

4%

Ambattur

20 - 30

0%

0%

OMR I**

45 - 60

-1%

1%

OMR II & III***

25 - 45

0%

0%

GST Road

35 - 40

0%

0%

*Indicative Grade A rents in INR per SF per month


**OMR I (Madhya Kailash Perungudi- Toll gate I)
***OMR II (Thoraipakkam Sholinganallur) & OMR III (Semmencherry Siruseri)

Weak absorption continued to keep pressure on rents and


capital values in 1Q 2015, resulting in a marginal decline by
1% in OMR I (Madhya Kailash - Perungudi - Toll Gate I). All

12 Research & Forecast Report | April 2015 | Colliers International

2.4
2.0
1.6
1.2
0.8

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

4Q 2013

3Q 2013

Average Rental And Capital Value Trend


10,500

Forecast

30

3,000

15

1,500

1Q 2017F

4,500

1Q 2016F

45

1Q 2015

6,000

1Q 2014

60

1Q 2013

7,500

1Q 2012

75

1Q 2011

9,000

1Q 2010

90

Capital Values INR Per Sq.ft

105

1Q 2008

Rental Values INR Per Sq Ft Per Month

The demand for office space is expected to gain further


momentum in line with the revival in economic growth
projected for the medium term. However, the high
vacancy level, coupled with upcoming supply is likely to
restrain the rent growth particularly in micro-markets
like Thoraipakkam, Sholinganallur and Semmenchery to
Siruseri over the next few quarters.

1Q 2013

Colliers View

2Q 2013

0.4

1Q 2009

During this quarter, the Chennai Government has


allocated INR500 and INR750 crore for the Chennai Mega
City Development Mission and the Integrated Urban
Development Mission, respectively for 2015 - 2016. Apart
from this, the sum of INR420 crore has been allocated for the
Tamil Nadu Urban Road Infrastructure Fund. Civic bodies
are targeting the overall infrastructure development of the
city through these funds.

Quarter Wise Absorption

Million Sq.ft

other micro-markets remained stable; this is also attributed


to the huge vacant stock, especially on the OMR stretch.

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

Income Tax Department

BSNL Buidling

Ford

AREA (SF)

LOCATION

LEASE / SALE

197,000

CBD

Lease

SP Infocity

69,000

Old Mahabalipuram
Road

Lease

Bank Bazaar

India Bulls

50,000

Ambattur

Lease

Citi Bank

TRIL

44,000

Old Mahabalipuram
Road

Lease

Vasan Eye care Hospital

Harini Towers

40,000

CBD

Lease

Key Under Construction Projects


BUILDING NAME

DEVELOPER

AREA (SF)

SP InfoCity, OMR Phase 2

Shapoorji Pallonji Group

1,200,000

Chennai One (BPO Park) Phase 2 ETL Developers

1,100,000

Estancia Block B2

469,000

L&T & Arun Excello

LOCATION
Old Mahabalipuram
Road
Old Mahabalipuram
Road
GST Road

POSSESSION
2015
2015
2015

Notes:
1. Office Market: Prime office properties in Chennai are located in four principal sub-markets: the CBD, SBD (Guindy, Manpakkam,Velachery) and the PBD (Old Mahaballipuram
Road (OMR).
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

13 Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
Bengaluru | Office
April 2015

Momentum
continues with
over 2.3 million
sq ft of office
absorption
It was another solid performance for the Bengaluru office
market in 1Q 2015, with office absorption totalling 2.31
million sq ft. Apart from this, about 1.74 million sq ft of
office space was pre-committed for build to suit by MNCs
like Amazon, Wells Fargo, Arista Networks and WSP
Consultants. IT / ITeS commanded the absorption with
about 69% (1.6 million sq ft), followed by BFSI sector 14%
and Retail 6%. SBD locations, such as Bannerghatta Road,
Koramangala, Malleswaram, Yamalur, J P Nagar and Outer
Ring Road - Marathahalli to KR Puram, saw maximum
traction with about 1.4 million sq ft office absorption, trailed
by PBD locations like Whitefield, Hosur Road and Outer
Ring Road - KR Puram to Hebbal, where more than 0.45
million sq ft was leased during the quarter.
Bengaluru recorded new supply of over 2.1 million sq ft
in 1Q 2015, 23% higher than that of the previous quarter.
Projects constituting this supply were Purva Gainz by
Purvankara Projects and Prestige Trinity Center by Prestige
Group both located at Hosur Road, Divyasree Technopolis
- Block by Divyasree at Yamalur, Global Village SEZ by
Tanglin Group at Mysore Road and Pritech - Block 14 by
Primal Group at ORR Marathahalli Sarjapur Road.
The total available stock for fit-outs was approximately 11
million sq ft. EPIP Zone / Whitefield accounted for 39%
of the total stock, followed by Outer Ring Road (24%) and
Electronic City (18%).

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD

90 - 130

0%

16%

55 - 63

0%

7%

53 - 60

0%

0%

Bannerghatta Road

50 - 60

0%

0%

EPIP Zone/
Whitefield

28 - 36

0%

0%

Hosur Road

25 - 40

0%

8%

Electronic City

26 - 33

0%

7%

Outer Ring Road


(Marathalli Sarjapur)
Outer Ring Road
(North)**

*Indicative Grade A rents in INR per SF per month


**Northern part of ORR - KR Puram till Hebbal

14 Research & Forecast Report | April 2015 | Colliers International

4
3
2

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

4Q 2013

3Q 2013

1Q 2013

2Q 2013

Average Rental And Capital Value Trend


Forecast

60

12,000
10,000

50

8,000

40

6,000

30

4,000

20

2,000

1Q 2017F

1Q 2016F

1Q 2015

1Q 2014

1Q 2013

1Q 2012

1Q 2011

10

Capital Values INR Per Sq.ft

70

1Q 2010

Overall, the Bengaluru office market is in the sweet


spot in terms of supply-and-demand fundamentals.
About 2 million sq ft of office space is expected to witness
completion next quarter, out of which about 0.2 million sq ft
is already committed. This steady increase in development
activity and greater domestic and foreign investor interest
in office market should result in additional occupancy and
rent growth. Select micro markets located along Outer Ring
Road (Marthalli - Sarjapur) and EPIP Zone / Whitefield
will continue to remain preferred micro markets among
occupiers due to their strategic locations.

1Q 2009

Colliers View

1Q 2008

In one of the major real estate transactions, Brigade Group


and GIC Singapore jointly bought Hindustan Unilever
Ltd. (HUL)s prime 26 acres of land located in Whitefield
to develop an IT Special Economic Zone. The property is
located in a prime location with connectivity to two IT hubs,
namely, Whitefield and Outer Ring Road.

Million Sq.ft

Rental values were remained stable across Bengaluru,


however capital values posted an average rise of 2% QoQ
across the city, except CBD, Hosur Road and Bannerghatta
Road where capital values were remained stable.

Quarter Wise Absorption

Rental Values INR Per Sq Ft Per Month

The quarter witnessed many new project launches during


the quarter, such as Embassy Tech Village, HVP Crest,
Mantri Agara Project, Vaishnavi Project and Primal Park
(RGA Tech Park) Blocks 3 and 4. All these projects are
expected to add more than 4 million sq ft of Grade A office
space between 201617 in the citys inventory.

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

Amazon

Constellation Business
Park

Misys

AREA (SF)

LOCATION

LEASE / SALE

500,000

Outer Ring Road

Lease

World Technology Centre

150,000

Outer Ring Road

Lease

Nokia

Karle Town Centre

131,640

Outer Ring Road

Lease

Epsilon

Karle Town Centre

131,640

Outer Ring Road

Lease

GCC Services India Pvt Ltd

World Technology Centre

131,211

Outer Ring Road

Lease

LOCATION

POSSESSION

900,000

Outer Ring Road

2015

Bagmane Constellation Business


Bagmane Developers
Park - Virgo Block

800,000

Outer Ring Road

2015

RGA Tech Park

800,000

Sarjapur Road

2015

Key Under Construction Projects


BUILDING NAME

DEVELOPER

Maple Tree - 1 Phase

Adamas Builder

Primal Realty

AREA (SF)

Notes:
1. Office Market: Prime office properties in Bengaluru can be divided into three principal sub-market CBD/O CBD (MG Road, Millers Road, Vittal Mallya Road etc.) the SBD
(Banerghatta Road & Outer Ring Road (ORR)) and PBD (Hosur Road, EPIP Zone, Electronic City and Whitefield).
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

15 Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
Kolkata | Office
April 2015

Transaction
volumes picks up
in 1Q 2015
During 1Q 2015, Kolkata office market showed signs of
improvement with over 0.22 million sq ft of absorption
compared to the previous quarters absorption of only 0.15
million sq ft. IT / ITeS occupiers topped the chart with over
36% of the total, followed by manufacturing 29% and BFSI
13%. Major transactions during the quarter included the
lease of 0.05 million sq ft office space by Siemens VAI in
Godrej Water Side and the lease of 0.02 million sq ft by NIIT
in Eco Space. Sector V / New Town remained the preferred
micro market among occupiers, with 79% share in the total
absorption. A few small deals were also concluded in the
CBD and SBD micro markets. Developers continued to
remain watchful in launching new projects because many
of the large office spaces are currently struggling with leases
/ sales due to the limited new entrants and the absence of
expansion plans of existing occupiers.

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD**

85 - 115

0%

-7%

SBD***

65 - 75

0%

-7%

Sector V

40 - 45

-8%

-11%

PBD****

34 - 35

0%

-3%

*Indicative Grade A rents in INR per SF per month


**Park Street, Camac Street, Chowranghee Road, AJC Bose Road
***EM Bypass, Topsia, Ruby
****Salt Lake, New Town, Rajarhat

Similarly, the city did not witness any major completion


during the quarter due to cautious approach from
developers and low absorption levels seen in the past few
quarters. Meanwhile, PS Group completed its Non-IT
building, PS-Arcadia (0.1 million sq ft), located in Camac
Street area, which is part of CBD.
Rents across Kolkata remained stable during the quarter,
with a marginal decline recorded in Sector V / New Town
micro market due to large availability of supply and limited
demand pipeline. Similarly, capital values declined in Sector
V / New Town and PBD micro markets in the range of 23%
QoQ. The rest of the micro markets remained stable.

16 Research & Forecast Report | April 2015 | Colliers International

Quarter Wise Absorption


1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

3Q 2013

2Q 2013

4Q 2013

0.10
0.00

1Q 2013

The overall market sentiment improved in the first quarter.


However, developers are not very optimistic about the
continuation of this absorption trend. The city is expected
to see very limited supply in the form of small- to mediumsized projects as developers are focusing on finishing
projects with small- to medium-sized floor plates, which
are relatively easy to lease. Rentals are expected to remain
stable primarily because of existing vacancy and low
absorption base.

Million Sq.ft

Colliers View

Forecast

12,000

100

10,000

80

8,000

60

6,000

40

4,000

20

2,000

1Q 2017F

1Q 2016F

1Q 2015

1Q 2014

1Q 2013

1Q 2012

1Q 2011

1Q 2010

1Q 2009

Capital Values INR Per Sq.ft.

120

1Q 2008

Rental Values INR Per Sq Ft Per Month

Average Rental And Capital Value Trend

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

AREA (SF)

LOCATION

LEASE / SALE

Siemens VAI

Godrej Water Side

46,769

Sector V

Lease

NIIT

Eco Space

18,000

New Town

Lease

PWC

South City Pinacle

13,777

Sector V

Lease

Religare

PS Arcadia Central

10,000

Camac Street

Lease

Honda Motors

Eco Space

9,167

New Town

Lease

Key Under Construction Projects


BUILDING NAME

DEVELOPER

AREA (SF)

LOCATION

POSSESSION

Mani Twin

Mani Group

1,800,000

Rajarhat

2015

Technopolis 2

Forum Projects

1,200,000

Bantala

2015

Magnacon

Infinity Group

Salt Lake

2015

740,000

Notes:
1. Office Market: The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd, AJC Bose Rd), East Kolkata (EM Bypass, Topsia, Ruby), Salt Lake/
Sector V and New Town / Rajarhat.
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

17 Research & Forecast Report | April 2015 | Colliers International

Research &
Forecast Report
Pune | Office
April 2015

IT / ITeS driving
the city office real
estate
Renewals and expansions by IT / ITeS companies continued
to drive the Pune office market in 1Q 2015. However, the
citys office absorption was recorded at approximately
0.89 million sq ft, which is 40% lower than the previous
quarters absorption. Nagar Road and Airport Road /
Pune Station continued to remain as the most preferred
locations by major occupants, each with about 24% of the
total absorption, followed by Hinjewadi and Hadapsar /
Fursungi, each with about 16%.
Occupiers from the IT / ITeS sector were the primary
contributors to this demand, taking up more than 90% of
the total absorption. This was followed by other sectors like
Logistics, Pharma and Manufacturing, accounting for over
7% of the total absorption. A number of large-floor plate
deals were concluded this quarter, like the 0.13 million sq
ft lease by Vodafone India in Business @ Mantri located
on Nagar Road. In addition, Amdocs took 0.08 million sq
ft in Magarpatta Cybercity Tower 3, and more than 0.05
million sq ft each was taken by Rockwell Automation and
Access Health Services in Embassy - Mississippi located at
Hinjewadi.
About 4 million sq ft was available for lease in Pune market,
of which 24% was located on the Airport Road / Pune
Station, 18% Nagar Road and 16% in Hinjewadi. The city
witnessed limited new supply, and only about 0.64 million
sq ft of Grade A supply was added to the citys Grade A
inventory. Projects that contributed to this new supply were
Marvel Alaina and Marvel Edge, both by Marvel Group, at
Koregaon Park and Viman Nagar, respectively.

City Office Barometer


INDICATORS

1Q 2015

2Q 2015 F

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

Baner

45 - 55

0%

0%

Bund Garden

50 - 65

0%

0%

Airport road/pune
station

45 - 75

0%

7%

Aundh

45 - 60

0%

0%

Senapati Bapat
Road

55 - 85

0%

0%

Bavdhan

35 - 45

0%

0%

Kalyani Nagar

45 - 60

0%

0%

Nagar Road

40 - 60

0%

0%

Hinjewadi

34 - 45

3%

3%

Hadapsar/Fursungi

38 - 65

0%

7%

Kharadi

34 - 65

2%

2%

*Indicative Grade A rents in INR per SF per month

Despite low absorption, developers like Vascon launched

18 Research & Forecast Report | April 2015 | Colliers International

1.80
1.50
1.20
0.90
0.60

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

4Q 2013

3Q 2013

Average Rental And Capital Value Trend


8,000

Forecast

70

7,000

60

6,000

1Q 2017F

1,000

1Q 2016F

10
1Q 2015

2,000

1Q 2014

3,000

20

1Q 2013

30

1Q 2012

4,000

1Q 2011

5,000

1Q 2010

50
40

Capital Values INR Per Sq.ft.

80

1Q 2008

Rental Values INR Per Sq Ft Per Month

The office market of Pune will continue to remain upbeat


due to strong fundamentals. IT/ITeS will remain as the
key occupier in the coming quarters of 2015. Vacancy is
expected to decline due to lesser amount of new supply and
increase in absorption. Rents are expected to inch up in
medium term.

2Q 2013

0.00

Colliers View

1Q 2013

0.30

1Q 2009

The rents for prime office property remained stable across


all major micro markets, except in Hinjewadi and Kharadi,
where rents rose by 23% QoQ. Capital values remained
on the same level compared to that of the previous quarter
across Pune.

Quarter Wise Absorption

Million Sq.ft

Platinum Square (0.04 million sq ft) at Viman Nagar, Nyati


launched Nyati Emporius (0.03 million sq ft) at Baner
and MSR Group launched a 0.07 million sq ft project
at Sangamwadi. These projects are currently under
construction and are expected to be completed in 2016.

Top 5 Transactions of the Quarter


CLIENT

BUILDING NAME

AREA (SF)

LOCATION

LEASE / SALE

Vodafone India

Business @ Mantri

133,379

Nagar Road

Lease

Amdocs

Magarpatta Cybercity
Tower-3

88,000

Hadapsar

Lease

Rockwell Automation

Embassy - Mississippi

51,516

Hinjewadi

Lease

Access Health Services

Embassy - Mississippi

51,116

Hinjewadi

Lease

HCL

Business Bay

46,000

Yerwada

Lease

AREA (SF)

LOCATION

POSSESSION

Key Under Construction Projects


BUILDING NAME

DEVELOPER

SP Infocity Building 5

Shapoorji Pallonji Group

800,000

Phursungi

2015

Commerzone Building 8

K Raheja Corp

420,000

Yerwada

2015

Acendas Phase II

Acendas

615,000

Hinjewadi

2015

Notes:
1. Office Market: The prime office sub-markets of Pune include CBD (Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp), O CBD (Aundh, Airport Road and
Kalyani Nagar) and the eastern corridor, along with Nagar Road and Kharadi, which have emerged as a preferred location for financial and IT/ITES companies.
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th March 2015.

19 Research & Forecast Report | April 2015 | Colliers International

Primary Authors:

502
67 countries on
6 continents
United States: 140
Canada: 31
Latin America: 24
199
EMEA: 108

Surabhi Arora
Associate Director | Research
+91 124 456 7500
surabhi.arora@colliers.com
Sachin Sharma
Manager | Research
Amit Oberoi I National Director
Valuation & Advisory Services & Research
For Oce Services:
Mumbai: George Mckay I South Asia Director
george.mckay@colliers.com
Delhi / NCR: Vikas Kalia | National Director
vikas.kalia@colliers.com

$2.3

billion in
annual revenue

1.7

billion square feet


under management

16,300

professionals

About Colliers International

colliers.com

2015

Bengaluru: Goutam Chakraborty I Director


goutam.chakraborty@colliers.com
Pune: Rishav Vij I Senior Associate Director
rishav.vij@colliers.com
Chennai: Kaushik Reddy I Director
kaushik.reddy@colliers.com
Kolkata: Swapan Dutta I Senior Associate Director
swapan.dutta@colliers.com
Colliers International
Technopolis Building, 1st Floor,
DLF Golf Course Road,
Sector 54, Gurgaon - 122 002
TEL +91 124 456 7500