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PROPEQUITY

Creating Investor Intelligence

Tier I Cities
Residential Market
Dynamics
Oct 2013

PropEquity

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Creating Investor Intelligence

Index
SR. NO.

TOPIC

PAGE NO.

Glossary

Economic Snapshot

7 Prominent Cities: Real Estate Trends

National Capital Region

Mumbai Metropolitan Region

13

Bengaluru

17

Pune

21

Kolkata

25

Chennai

29

Hyderabad

33

12

Snapshot Q3 2013 vs. Q3 2012

37

13

Disclaimer

39

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Glossary
Acronym

Particulars

YTD

Year Till Data - Represents data till October 2013

NCR

National Capital Region

MMR

Mumbai Metropolitan Region

Sft

Square Feet

Y-o-Y

Year on Year

Q-o-Q

Quarter on Quarter

INR

Indian Rupees

Mn

Million

Times / Multiple

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Macro Economic Snapshot

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India: A Macroeconomic Perspective


The Q-o-Q GDP growth rate of India has been persistently declining, which is attributable to a
combination of factors such as weak global economic scenario, persistently high inflation rate, declining
industrial output and stagnation in service sector
Any significant hopes of revival are expected to be highly dependent upon the results of the upcoming
parliamentary elections
Indias GDP Growth Trend
12.00%

10.00%

9.7%

9.4% 9.3%
8.6%

GDP Growth Rate

8.5%
7.8%

8.00%

7.5%

8.9%

8.3%

7.3%
6.1%

6.00%

5.8%

7.8% 7.7%

6.9%

6.3%

6.1%

5.3% 5.5% 5.3%

4.7% 4.8%

4.4%

4.8%

4.00%

2.00%

0.00%
Q3

Q4

FY 08

Q1

Q2

Q3

FY 09

Q4

Q1

Q2

Q3

FY 10

Q4

Q1

Q2

Q3

FY 11

Q4

Q1

Q2

Q3

FY 12

Q4

Q1

Q2

Q3

FY 13

Q4

Q1

Q2

FY 14
Source: RBI

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India: A Macroeconomic Perspective


RBI has adopted tight monetary policy measures with a focus to tame inflation
The policy has led to soaring interest rates in the economy and consequently increasing the cost of
capital
Indian economy has witnessed stubbornly high inflation in the past. However, a declining trend has been
witnessed from March 2013, reflecting the efficacy of corrective measures adopted by the RBI
Gross Fiscal Deficit as % of GDP

7.0%
6.0%

6.40%

6.00%

5.0%

5.10%

4.0%
3.0%

4.60%

4.90%

3.30%

2.0%

2.60%

1.0%
0.0%
2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

Trend ~ Inflation vs. Repo Rate

Percentage

9%

Inflation (%)

8.5%

7%

8.1%

8.0%

8%

Repo Rate (%)


7.8%
7.5%

7.2%

7.3%

6%
5%

7.5%

7.3%

6.5%

4.6%

4%

Jan-12

Mar-12

May-12

Jul-12

Sep-12

Nov-12

Jan-13

Mar-13

May-13
Jul-13
Sep-13
Source: MOSPI, Finance Ministry, RBI

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Trends

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October 2013 - Snapshot


Oct
2012

Oct
2013

KOLKATA

Oct
2012

Oct
2013

Supply Additions
(Units)

9,683

3,944

Supply Additions (Units)

1,064

457

Absorption (Units)

9,033

4,966

Absorption (Units)

1,221

710

Unsold Supply (Units)

24,025

24,424

Unsold Supply (Units)

147,231

163,420

Weighted Average
Launch Price (INR/Sft)

2,987

3,962

Weighted Average
Launch Price (INR/Sft)

4,562

5,810

HYDERABAD

Oct
2012

Oct
2013

MMR

Oct
2012

Oct
2013

Supply Additions (Units)

1,670

1,490

Supply Additions
(Units)

Absorption (Units)

1,465

1,051

11,492

6,361

Unsold Supply (Units)

37,486

38,811

Absorption (Units)

6,230

3,454

Weighted Average
Launch Price (INR/Sft)

2,939

4,210

Unsold Supply (Units)

152,886

166,945

BENGALURU

Weighted Average
Launch Price (INR/Sft)

Oct
2012

Oct
2013

6,802

6,303

Supply Additions (Units)

5,301

2,628

Absorption (Units)

4,268

3,071

Unsold Supply (Units)

65,199

79,066

Weighted Average
Launch Price (INR/Sft)

3,777

4,259

NCR

Oct
2012

Oct
2013

Supply Additions
(Units)

3,458

4,409

Absorption (Units)

3,559

Unsold Supply (Units)


Weighted Average
Launch Price (INR/Sft)

PUNE

CHENNAI

Oct
2012

Oct
2013

2,268

Supply Additions (Units)

4,563

506

59,526

61,530

Absorption (Units)

2,505

1,588

3,825

4,682

Unsold Supply (Units)

41,814

42,857

Weighted Average
Launch Price (INR/Sft)

3,835

3,477

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National Capital
Region
NCR Delhi, Gurgaon, NOIDA, Greater
NOIDA, Ghaziabad, Faridabad

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NCR - Supply & Absorption Dynamics


Quarterly Supply Additions
Y-o-Y Comparative

Supply Absorption Dynamics


Months of Inventory
30

30
22

30,000
11

15

15

21

19

18

25

21
17

17

20
15
10

10,000

3%

Q3

Average Quarterly
Value of Launches
INR 173 Bn

Q4

Q1

Q2

Q3

Q4

Q1

2012
Average Quarterly
Value of Launches
INR 184 Bn

Q2

Q3

2013
Average Quarterly
Value of Launches
INR 168 Bn

Despite Q3 being the beginning of festive season, Q3 2013 witnessed lukewarm real estate
activity, both in terms of launches & absorption
On Y-o-Y basis, supply additions in Q3 2013 declined by 47% and absorptions waned by 30% over
the corresponding time period of 2012

However, first ten months of 2013 and 2012 have witnessed comparable supply additions
and absorption

Jan-Oct
2013

Q4 YTD

Quarterly Absorptions
Y-o-Y Comparative

70,728

Q2

2011

Jan-Oct
2012

0
Q1

70,947

In Units

40,000

20,000

35

86,335

33

50,000

89,133

Absorption (LHS)

Months of Inventory

Supply (LHS)

Jan-Oct
2012

Jan-Oct
2013

Supply additions dropped marginally ~ 3%; Absorptions remained flat

Inventory build up has been persistently increasing and stood at 33 months as on end of
Oct 2013
Average quarterly value of launches of first three quarters of 2013 has declined by approx.
9% as compared to corresponding period of 2012

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NCR - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend

Increase
23%

5,810

7,000
4,562

170
6,000

160
150

5,000

140
4,000

130
120

3,000

110
100

2,000
Q1

Q2

Q3

Q4

2011

Robust absorption rates kept


unsold supply in 2011 under
check enabling developers to
drive up capital values
Weighted average price of
new launches increased 26%
in 2011
The capital value momentum
can be mapped to increased
development focus in certain
new pockets of Gurgaon &
NOIDA

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Oct
2012

Unsold Supply
Y-o-Y Comparative

Q4 YTD

2012

2013

Unsold supply build-up


~ Inhibited capital value
escalations
Stagnant average capital
values attributable to
increased new launches
in Affordable /
peripheral locations of
NCR such as Greater
NOIDA (West), Raj
Nagar Extension,
Yamuna Expressway, Etc.

Increased development
focus in high capital
value pockets of
Gurgaon, like Dwarka
Expressway, led to sharp
increase in weighted
average price of new
launches in 2013

Oct
2013

11%

163,420

Decrease
3%

27%

147,231

Increase
26%

180

Weighted Average Launch Price

INR Per Sft

Units In Thousands

Availability

Oct
2012

Oct
2013

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NCR - Delivery Track Record & Future Commitments


Over 5 times average annual delivery commitments between 2014 2017 in NCR
Raises execution concerns

Y-o-Y Unit Completions

5.5x
Average Annual Delivered &
To Be Delivered Units

24,003

Total Units

96,012

96,679

131,928

96,679

97,777
527,715

4.0x

200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

720,406 UNITS

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

192,691 UNITS

UNITS COMPLETED TILL YR.


2012 ~ 96,012 UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

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NCR - AML Classification


Limited Affordable housing options in NCR
Mid End segment - Dominant budget segment in NCR with 70% contribution to supply as well
as absorptions
Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


2013

A
3%

2012

A
6%

2011

A
6%

0%

M
71%

L
26%

M
67%
M
74%

20%

40%

Luxury
24%

L
27%

Mid
71%

L
20%

60%

80%

Affordable
5%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


2013

A
4%

2012

A
5%

2011

A
5%
0%

M
76%

L
21%

M
68%
M
76%
20%

40%

Mid
73%

L
27%
L
19%
60%

80%

100%

Luxury
22%

Affordable
5%

14

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Mumbai
Metropolitan
Region
MMR Mumbai, Navi Mumbai, Thane

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MMR - Supply & Absorption Dynamics


Quarterly Supply Additions
Y-o-Y Comparative

Supply Absorption Dynamics


Months of Inventory

43

13

15

18

20

21

24

21

25

30
20

10,000

10

0
Q2

Q3

2011
Average Quarterly
Value of Launches
INR 165 Bn

Q4

Q1

Q2

Q3

Q4

Q1

2012
Average Quarterly
Value of Launches
INR 115 Bn

Q2

Q3

Jan-Oct
2013

Q4 YTD

2013
Average Quarterly
Value of Launches
INR 122 Bn

Thane & Navi Mumbai accounted for 75% of project launches in Q3 2013 in MMR, while
Mumbais share in new launches stood at 25%
On Y-o-Y basis, supply additions in Q3 2013 declined by 40% and absorptions waned by 39% over
the corresponding time period of 2012

First ten months of 2013, compared with corresponding period of 2012, also registered a
sharp drop in supply additions and absorptions

Jan-Oct
2012

0
Q1

30%
56%

Quarterly Absorptions
Y-o-Y Comparative

26%

Jan-Oct
2012

Jan-Oct
2013

49,440

20,000

25

50
40

32

30,000

60

66,922

In Units

40,000

48

60,878

50,000

87,509

Absorption (LHS)

Months of Inventory

Supply (LHS)

Supply additions dropped by 30%; Absorptions declined by 26%

Significant decline in absorption levels led to sharp increase in inventory overhang which
stood at 48 months as on end of Oct 2013
Average quarterly value of launches of first three quarters of 2013 compared to 2012
registered a modest growth of 6%

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MMR - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend

9,000

170

8,000

150

7,000

130

6,000

110

5,000

90

4,000

70

3,000

50
30

2,000

10

1,000
Q1

Q2

Q3

Q4

2011

Unsold supply in 2011 was


constant in MMR
The spike noticed in weighted
average launch price in Q2
2011 is attributable to large
ticket size launches in Mumbai
such as Razzak Heaven, Iris,
Darshan Pride, Crescent Aria,
etc.

Q1

Q2

Q3

Q4

2012

Drop in average capital


values in Q1 & Q2 2012
mapped to larger share of
new launches in Thane &
Navi Mumbai

Q1

Q2

Q3

Q4 YTD

Oct
2012

Oct
2013

Unsold Supply
Y-o-Y Comparative
9%

2013

Approx. 8% increase in
unsold supply in tandem
with declining
absorption rates
Navi Mumbai & Thane
inhibiting capital value
accounted for 90% of new
escalations
supply additions
Q3 & Q4 witnessed higher Weighted average
concentration of new
capital values on launch
supply in Mumbai, approx.
basis exhibited a
20% ~ Resulting in
decrease of 8%
increased capital values

Oct
2012

166,945

-10

6,303

Decrease
8%

6,802

Increase
31%

7%

152,886

Increase
20%

190

Weighted Average Launch Price

INR Per Sft

Units In Thousands

Availability

Oct
2013

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MMR - Delivery Track Record & Future Commitments

Y-o-Y Unit Completions

Approx. 1.9 times average annual delivery commitments between 2014 2017 in MMR
Likely to meet future delivery commitments
However, Navi Mumbai may witness execution slippages due to large scale project launches
1.9x
Average Annual Delivered &
To Be Delivered Units

46,887

Total Units

187,550

96,050

88,360

96,050

97,777
353,441

2.0x

180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

637,041 UNITS

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

283,600 UNITS

UNITS COMPLETED TILL YR.


2012 ~ 187,550 UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

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MMR - AML Classification


Expanding Mid-End segment owing to majority launches in satellite cities

Increased share of Luxury segment in 2013 ~ Mapped to new launches in Mumbai


Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


A
25%

2013

M
47%

A
30%

2012

M
50%

A
28%

2011
0%

40%

Luxury
22%

L
21%

M
51%
20%

Mid
50%

L
28%

L
21%
60%

80%

Affordable
28%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


A
24%

2013

M
53%

A
28%

2012

M
49%

A
24%

2011
0%

40%

Luxury
23%

L
22%

M
53%
20%

Mid
51%

L
24%

L
23%
60%

80%

100%

Affordable
26%

19

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Bengaluru

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Bengaluru - Supply & Absorption Dynamics


Quarterly Supply Additions
Y-o-Y Comparative

Supply Absorption Dynamics


Months of Inventory

In Units

20,000
15,000

26

24
18
15

15

18

25

18

15

15

15

30

20

15

15

12

10,000

10

5,000

12%
56%
51,961

25,000

46,341

Absorption (LHS)

Months of Inventory

Supply (LHS)

0
Q1

Q2

Q3

2011
Average Quarterly
Value of Launches
INR 90 Bn

Q4

Q1

Q2

Q3

Q4

Q1

2012
Average Quarterly
Value of Launches
INR 82 Bn

Q2

Q3

Q4 YTD

2013
Average Quarterly
Value of Launches
INR 102 Bn

Jan-Oct
2012

Jan-Oct
2013

Quarterly Absorptions
Y-o-Y Comparative

Moderate correction in supply additions and absorptions witnessed in Q3 2013

On Y-o-Y basis, supply additions in Q3 2013 declined by 14% and absorptions waned by 17% over
the corresponding time period of 2012

However, on comparison of first ten months of 2013 with the corresponding period of
2012, an increase in supply additions and absorptions was registered
Supply additions increased by 12%; Absorptions increased by 8%

37,595

Gradual decline in quarterly absorptions beginning from Q1 2013 contributing to inventory


pile up ~ Inventory overhang increased from 15 months in Q1 2013 to 26 months as on
end of Oct 2013
Average quarterly value of launches of first three quarters of 2013 increased by approx.
24% as compared to corresponding period of 2012 primarily due to capital value
escalations

Oct
2012

40,464

8%

Oct
2013

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Bengaluru - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend


Increase
20%

5,000

80

4,500

70

4,000

4,259

Increase
6%

3,777

Increase
10%

90

13%

Weighted Average Launch Price

3,500

60

3,000

50

2,500

40

2,000

30

1,500

20

1,000

10

500

0
Q3

Q4

Q1

Q2

2011

Build-up of unsold supply


witnessed in Bengaluru in
2011
Weighted average price of
new launches increased by
10% in 2011 ~ Primarily on
account of high ticket price
launches such as Century
Square, Nitesh Logos, Four
Seasons Private Residences,
etc.

Q3

Q4

Q1

Q2

2012

Modest increase in
capital values
attributable to

Increased new supply


additions in lower
budget segment
Larger chunk of
supply in locations
commanding lower
capital values than city
average

Q3

Oct
2013

Unsold Supply
Y-o-Y Comparative

Q4 YTD

21%

2013

Capital values exhibit a


20% increase from Q1 Q4 2013

Capital value increase


primarily driven by
high ticket size
launches such as
Indraprastha by
Sobha Developers,
77o Sky by DivyaSree,
etc.

Oct
2012

79,066

Q2

Oct
2012

65,199

Q1

INR Per Sft

Units In Thousands

Availability

Oct
2013

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Bengaluru - Delivery Track Record & Future Commitments


Approx. 2.0 times average annual delivery commitments between 2014 2017 in Bengaluru
At the present rate of execution, Bengaluru may meet future delivery commitments

Y-o-Y Unit Completions

2.0x
Average Annual Delivered &
To Be Delivered Units

21,370

Total Units

85,481

43,798

41,874

43,798

97,777
167,494

2.0x

90,000
80,000
70,000

60,000
50,000
40,000
30,000

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

296,773 UNITS

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

129,279 UNITS

20,000
10,000
0

UNITS COMPLETED TILL YR.


2012 ~ 85,481 UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

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Bengaluru - AML Classification


Dominant Mid-End budget segment ~ Constituting two - third of supply
Affordable budget segment shrinking gradually ~ Declining contribution to supply as well as
absorption
Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


A
9%

2013

M
69%

A
13%

2012

M
66%

A
11%

2011
0%

L
23%

L
21%

M
67%
20%

Mid
67%

Luxury
22%

L
22%

40%

60%

80%

Affordable
11%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


2013

A
13%

2012

A
14%

M
68%
M
64%

A
18%

2011
0%

L
18%
L
22%

M
66%
20%

40%

Mid
66%

L
16%
60%

80%

Luxury
19%

Affordable
15%
100%

24

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Pune

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Pune - Supply & Absorption Dynamics


Months of Inventory

25,000

27

24

In Units

20,000
15,000

25

21
18
15
12

15

15

18

20

15

12

30

15

12

10,000

10

5,000

30%
56%

Jan-Oct
2012

Jan-Oct
2013

30,146

Absorption (LHS)

Months of Inventory

Supply (LHS)

42,904

Quarterly Supply Additions


Y-o-Y Comparative

Supply Absorption Dynamics

0
Q1

Q2

Q3

2011
Average Quarterly
Value of Launches
INR 52 Bn

Q4

Q1

Q2

Q3

Q4

Q1

2012
Average Quarterly
Value of Launches
INR 52 Bn

Q2

Q3

Q4 YTD

2013
Average Quarterly
Value of Launches
INR 35 Bn

Quarterly Absorptions
Y-o-Y Comparative

On Y-o-Y basis, supply additions in Q3 2013 declined by 35% and absorptions waned by 46% over
the corresponding time period of 2012

Decline in supply additions & absorptions over the first ten months of 2013 compared to the
corresponding period of 2012

27%

Jan-Oct
2012

Jan-Oct
2013

29,048

39,935

Q3 2013 witnessed muted real estate activity both in terms of launches & absorption

Supply additions decreased by 30%; Absorptions declined by 27%

Gradual decline in quarterly absorptions beginning from Q3 2012 contributing to inventory


pile up ~ Inventory overhang increased from 12 months in Q3 2012 to 27 months as on
end of Oct 2013
Average quarterly value of launches for the first three quarters has dropped significantly in
2013 compared to 2012 on account of sharp reduction in new supply additions in Pune

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Pune - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend


Increase
11%

5,000
3,825

4,500

60

4,000

55

3,500

50

3,000

45

2,000

2,500
1,500

40

1,000

35

500

30

0
Q2

Q3

Q4

2011

Launch of large scale projects


such as Kul Ecoloch, Nanded
City, etc. led to a marginal
build-up of unsold supply in
2011 and inhibited increase
in capital values
Weighted average price of
new launches decreased by
2%

Q1

Q2

Q3

Q4

2012

High ticket launches in


Q1 & Q2 2012 such as
Cascada, Divine, Rose,
Icon, Suyog Pushpa, etc.
drove up capital values
Approx. 38% of total
new project launches in
Q4 2012 were launched
in > INR 5000/Sft
bracket ~ Pushing up
the average capital value

Q1

Q2

Q3

Oct
2012

Oct
2013

Unsold Supply
Y-o-Y Comparative

Q4 YTD

3%

2013

Average capital values


on
launch
basis
increased by 11% in first
ten months of 2013
Capital values on launch
basis
impacted
by
launches
in
higher
budget segment such as
Kyra,
Brisa,
Basilo,
Ribera, Prive, etc.

59,526

Q1

4,682

Increase
7%

Oct
2012

61,530

Decrease
2%

65

22%

Weighted Average Launch Price

INR Per Sft

Units In Thousands

Availability

Oct
2013

PROPEQUITY

27

Creating Investor Intelligence

Pune - Delivery Track Record & Future Commitments


Approx. 1.1 times average annual delivery commitments between 2014 2017 in Pune
Focus on managing unsold supply leading to attainable projection of supply commitment

Y-o-Y Unit Completions

1.1x
Average Annual Delivered &
To Be Delivered Units

31,907

Total Units

127,627

49,512

34,092

49,512

97,777
136,370

1.6x

80,000

70,000
60,000

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

313,509UNITS

50,000
40,000
30,000

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

177,139 UNITS

20,000
10,000
0

UNITS COMPLETED TILL YR.


2012 ~ 127,627UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

PROPEQUITY

28

Creating Investor Intelligence

Pune - AML Classification


Dominant budget segment ~ Mid-End

Real estate activity picking up in the Luxury segment with considerable shrinkage in Affordable
budget segment
Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


A
15%

2013

M
70%

Mid
65%

L
14%

2012

A
24%

M
64%

L
12%

2011

A
25%

M
63%

L
12%

0%

20%

40%

60%

80%

Luxury
13%
Affordable
22%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


A
18%

2013

M
70%

A
27%

2012

M
62%

A
20%

2011
0%

L
12%
L
11%

M
69%
20%

40%

L
11%
60%

80%

100%

Mid
67%

Luxury
11%
Affordable
22%

29

PROPEQUITY

Creating Investor Intelligence

Kolkata

PROPEQUITY

30

Creating Investor Intelligence

Kolkata - Supply & Absorption Dynamics

34

6,000

30

In Units

5,000

21

4,000
3,000

12

15

15

15

15

Q4

Q1

21

18

18

21

2,000
1,000
0
Q1

Q2

Q3
2011

Average Quarterly
Value of Launches
INR 16 Bn

Q2

Q3
2012

Average Quarterly
Value of Launches
INR 24 Bn

Q4

Q1

Q2

Q3

40
35
30
25
20
15
10
5
0

Jan-Oct
2012

Jan-Oct
2013

Q4 YTD

2013
Average Quarterly
Value of Launches
INR 15 Bn

Despite Q3 being the beginning of festive season, fewer new supply additions were
observed in Kolkata ~ Developers resorting to supply adjustment in the wake of mounting
inventory overhang

36%
56%

On Y-o-Y basis, supply additions in Q3 2013 declined by 53% and absorptions waned by 29% over
the corresponding time period of 2012

Gradual decline in quarterly absorptions beginning from Q2 2013 contributing to inventory


pile up ~ Inventory overhang increased from 18 months in Q1 2013 to 34 months as on
end of Oct 2013
37% drop in average quarterly value of launches in first three quarters of 2013 over
corresponding time period of 2012 primarily on account of fewer new launches

Quarterly Absorptions
Y-o-Y Comparative

12%

Jan-Oct
2012

Jan-Oct
2013

10,904

7,000

11,251

Months of Inventory

12,440

Absorption (LHS)

Months of Inventory

Supply (LHS)

17,461

Quarterly Supply Additions


Y-o-Y Comparative

Supply - Absorption Dynamics

PROPEQUITY

31

Creating Investor Intelligence

Kolkata - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend


Decrease
4%

Increase
27%

4,500

3,962

Decrease
6%

30

33%

Weighted Average Launch Price

3,500

20

3,000
2,500

15

2,000

10

1,500
1,000

500

0
Q3

Q4

2011

Weighted average price of


new launches exhibit a
decrease of 6%
Increasing absolute unsold
supply coupled with sizable
new supply addition in lower
budget segment ~ Negatively
impacting average capital
values

Several launches in the price


falling in the price range of
INR 2,000 INR 3,000/Sft

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Unsold Supply
Y-o-Y Comparative

Q4 YTD

2012

2013

Build-up of unsold
supply led to a correction
in new launch project
pricing ~ 4% decrease
The sporadic movement
of price in Q2 2012 is
attributable to project
launches in higher
budget segment (P.S.
Magnum, Himadri,
Mandeville Garden, etc.)

Developers resorted to
adjusting new supply
additions inline with
absorption trend ~
Resulting in steady
absolute unsold supply
levels
High ticket price
launches witnessed in
micro markets of Topsia,
Rajarhat, etc. ~ Driving
up the average capital
values in the city

Oct
2013

2%

24,424

Q2

Oct
2012

24,025

Q1

2,987

4,000

25

INR Per Sft

Units In Thousands

Availability

Oct
2012

Oct
2013

PROPEQUITY

32

Creating Investor Intelligence

Kolkata - Delivery Track Record & Future Commitments

Y-o-Y Unit Completions

Approx. 1.9 times average annual delivery commitments between 2014 2017 in Kolkata
Relatively smaller market size of organized real estate development in Kolkata
Meeting delivery commitments might not be a challenge
1.9x
Average Annual Delivered &
To Be Delivered Units

8,063

Total Units

32,251

13,141

15,645

13,141

97,777
62,582

1.6x

30,000
25,000
20,000
15,000
10,000
5,000
0

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

107,974 UNITS

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

45,392 UNITS

UNITS COMPLETED TILL YR.


2012 ~ 32,251 UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

PROPEQUITY

33

Creating Investor Intelligence

Kolkata - AML Classification


Decreasing share of Affordable and Luxury segment launches

Consolidation of real activity in the Mid-End budget segment


Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


A
23%

2013

M
65%

L
12%

2012

A
35%

M
50%

L
15%

2011

A
35%

M
49%

L
16%

0%

20%

40%

60%

Mid
53%

80%

Luxury
15%

Affordable
32%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


A
25%

2013

M
62%

A
31%

2012

M
50%

A
25%

2011
0%

40%

Luxury
18%

L
18%

M
54%
20%

Mid
55%

L
13%

L
20%
60%

80%

100%

Affordable
27%

34

PROPEQUITY

Creating Investor Intelligence

Chennai

PROPEQUITY

35

Creating Investor Intelligence

Chennai - Supply & Absorption Dynamics


Quarterly Supply Additions
Y-o-Y Comparative

Supply Absorption Dynamics


Months of Inventory
27

24

12,000

6,000

18
15
12

15

15

12

18

20

15

15

15
10

4,000

2,000
0

29%
56%

Jan-Oct
2012

Jan-Oct
2013

0
Q1

Q2

Q3

2011
Average Quarterly
Value of Launches
INR 52 Bn

Q4

Q1

Q2

Q3

Q4

Q1

2012
Average Quarterly
Value of Launches
INR 43 Bn

Q2

Q3

Q4 YTD

2013
Average Quarterly
Value of Launches
INR 35 Bn

Quarterly Absorptions
Y-o-Y Comparative

On Y-o-Y basis, supply additions in Q3 2013 declined by 47% and absorptions declined by 27%
over the corresponding time period of 2012

Supply additions & absorptions also declined over the first ten months of 2013 compared to
the corresponding period of 2012

Supply additions decreased by 29%; Absorptions declined by 18%

17% drop in supply additions in the first three quarters of 2013 over the corresponding period of
2012 resulted in 19% drop in average quarterly value of launches

25,004

Q3 2013 witnessed muted real estate activity both in terms of launches & absorption,
however, absorptions outpacing supply additions indicate cleanup from old inventory

18%
20,391

In Units

8,000

25

21

10,000

30

20,416

14,000

28,616

Absorption (LHS)

Months of Inventory

Supply (LHS)

Gradual decline in quarterly absorptions beginning from Q1 2013 contributing to inventory


pile up ~ Inventory overhang increased from 18 months in Q1 2013 to 27 months as on
end of Oct 2013
Average quarterly value of launches for the first three quarters exhibits declining trend
Jan-Oct
2012

Jan-Oct
2013

PROPEQUITY

36

Creating Investor Intelligence

Chennai - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend

5,000

45

4,500

40

4,000

35

3,500

30

3,000

25

2,500

20

2,000

15

1,500

10

1,000

500

0
Q2

Q3

Q4

2011

High unsold supply build up in


2011 inhibited launch capital
value escalations
Weighted average price of
new
launches
remained
unchanged in 2011

Q1

Q2

Q3

Q4

2012

Year 2012 witnessed a


build up in absolute
unsold supply which kept
capital values under
check
Weighted average price
of new launches
decreased 2% in 2012

Q1

Q2

Q3

Oct
2012

Oct
2013

Unsold Supply
Y-o-Y Comparative

Q4 YTD

2%

2013

Weighted average price of new


launches increased 18% till Q3
2013 due to launches in higher
budget segment such as to high
ticket new launches like Prestige
Downtown,
Czars,
Isha
Poriyagham, Sundaram, etc.
Sharp decrease in capital values
was recorded in Q4 2013 YTD
owing to larger share of
launches in the Affordable
segment

42,857

Q1

3,477

3,835

Decrease
8%

Decrease
2%

41,814

No
Change

50

9%

Weighted Average Launch Price

INR Per Sft

Units In Thousands

Availability

Oct
2012

Oct
2013

PROPEQUITY

37

Creating Investor Intelligence

Chennai - Delivery Track Record & Future Commitments

Y-o-Y Unit Completions

Approx. 2.2 times average annual delivery commitments between 2014 2017 in Chennai
Lower average annual delivery commitments from 2014 onwards as compared to 2013 project
deliveries
2.2x
Average Annual Delivered &
To Be Delivered Units

11,293

Total Units

45,172

35,522

24,315

35,522

97,777
97,261

3.1x

50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

177,955 UNITS

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

80,694 UNITS

UNITS COMPLETED TILL YR.


2012 ~ 45,172 UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

PROPEQUITY

38

Creating Investor Intelligence

Chennai - AML Classification


Dominant Mid-End segment ~ Registered 15% increase in supply share from 2011 to 2013

Waning Supply additions in Affordable segment

Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


A
17%

2013

M
70%

A
14%

2012

M
71%

A
20%

2011

L
13%

20%

40%

Luxury
16%

L
14%

M
61%

0%

Mid
67%

L
18%
60%

80%

Affordable
17%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


2013

A
20%

2012

A
20%

M
67%
M
64%

A
25%

2011
0%

40%

Luxury
17%

L
16%

M
56%
20%

Mid
61%

L
14%

L
19%
60%

80%

100%

Affordable
22%

39

PROPEQUITY

Creating Investor Intelligence

Hyderabad

PROPEQUITY

40

Creating Investor Intelligence

Hyderabad - Supply & Absorption Dynamics


Quarterly Supply Additions
Y-o-Y Comparative

Supply Absorption Dynamics


Months of Inventory

30

24

21

Q1

Q2

Q3

2011
Average Quarterly
Value of Launches
INR 27 Bn

Q4

27

24

24

Q1

Q2

Q3

24

24

Q4

Q1

2012
Average Quarterly
Value of Launches
INR 21 Bn

27

Q2

Q3

1%

Q4 YTD

2013
Average Quarterly
Value of Launches
INR 28 Bn

Jan-Oct
2012

Quarterly Absorptions
Y-o-Y Comparative

Persistent uncertainty over the fate of Hyderabad with regards to Telangana issue translated
into cautious approach from developers as reflected by fewer new launches in Q3 2013
On Y-o-Y basis, supply additions in Q3 2013 declined by 40% and absorptions waned by 16% over
the corresponding time period of 2012

However, marginal correction in supply additions & absorption has been witnessed over the
first ten months of 2013 compared to the corresponding period of 2012

6%
14,611

Jan-Oct
2013

13,679

30

40
35
30
25
20
15
10
5
0

14,246

37
33

14,407

10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000

Absorption (LHS)

Months of Inventory

In Units

Supply (LHS)

Supply additions decreased by 1%; Absorptions declined by 6%

Since Q1 2013, Inventory has been on an increase, which stood at 37 months as on end of
October 2013
Average quarterly value of launches of first three quarters of 2013 has increased by approx.
33% as compared to corresponding period of 2012, primarily driven by low base effect

Jan-Oct
2012

Jan-Oct
2013

PROPEQUITY

41

Creating Investor Intelligence

Hyderabad - Pricing & Unsold Supply Trend


New Launch Pricing
Y-o-Y Comparative

Launch Price vs. Availability Trend


Increase
38%

39

4,000

38

3,500

37

3,000

36

2,500

35

2,000

34

1,500

33
32

1,000

31

500

30

4,210

4,500

0
Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Q1

Q2

Q3

Oct
2012

Oct
2013

Unsold Supply
Y-o-Y Comparative

Q4 YTD
4%

2013

Unsold supply in 2011 was fairly 2012 witnessed marginal Unsold supply level increases
marginally by 1.5%,
high in Hyderabad inhibiting
build-up in unsold supply
any capital value escalations
primarily driven by new However, declining absorption rate
leading to increase of months of inventory
activity in tandem with
Weighted average price of new
Weighted average Capital value on
increase in capital values
launches decreased by 7%
launch basis increase by 38% ~

The drop in capital values can Increase in capital values


primarily driven by high budget
also be mapped to weak
attributable launches in
segment launches witnessed in
investment sentiments in
higher budget segment in
Hyderabad owing to the
Jubilee Hills, Hi-Tech City,
regions such as Gachibowli,
persistent Telangana issue
Gachibowli, etc.
Madhapur, Kukatpally, etc.

Oct
2012

38,811

Q1

2,939

Increase
27%

37,486

Decrease
7%

40

43%

Weighted Average Launch Price

INR Per Sft

Units In Thousands

Availability

Oct
2013

PROPEQUITY

42

Creating Investor Intelligence

Hyderabad - Delivery Track Record & Future Commitments

Y-o-Y Unit Completions

Approx. 1.3 times average annual delivery commitments between 2014 2017 in Hyderabad
Persistent overhang of Telangana issue compelled developers to adopt cautious approach
Changes in political environment may lead to execution challenges
1.3x
Average Annual Delivered &
To Be Delivered Units

13,921

Total Units

55,685

30,312

17,944

30,312

97,777
71,776

2.2x

45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2017 ~

157,773 UNITS

ESTIMATED TOTAL COMPLETIONS


BY END OF YR. 2013 ~

85,997 UNITS

UNITS COMPLETED TILL YR.


2012 ~ 55,685 UNITS
2009

2010

2011

2012

2013

2014

2015

2016

2017
Years

PROPEQUITY

43

Creating Investor Intelligence

Hyderabad - AML Classification


Hyderabad depicting signs of a gradual transition to dominant Mid-End segment market
Shrinking Affordable supply share ~ Dropped from11% to 4% over 2011 to 2013 YTD
Luxury segment supply gradually picking up
Segment Wise Supply Split 2011- 2013YTD

Y-o-Y Segment Wise NEW LAUNCH Trend


2013

A
4%

M
71%

L
25%

A
13%

2012

M
66%

A
11%

2011
0%

L
20%

M
71%
20%

40%

Mid
70%

Luxury
20%

L
18%
60%

80%

Affordable
10%

100%

Segment Wise Absorption Split 2011- 2013YTD

Y-o-Y Segment Wise ABSORPTION Trend


2013

A
8%

M
75%

2012

A
11%

M
69%

A
14%

2011
0%

L
17%
L
20%

M
66%
20%

40%

Mid
69%

L
21%
60%

80%

100%

Luxury
20%

Affordable
11%

PROPEQUITY

Creating Investor Intelligence

Snapshot -

PROPEQUITY
Creating Investor Intelligence

Jan-Oct 2013 vs. Jan-Oct 2012

PROPEQUITY

45

Creating Investor Intelligence

Snapshot - Jan-Oct 2013 vs. Jan-Oct 2012


Parameters

NCR

MMR

Bengaluru

Pune

Kolkata

Chennai

Hyderabad

Supply Addition

Drop
-3%

Drop
-30%

Rise
+12%

Drop
-30%

Drop
-36%

Drop
-29%

Drop
-1%

Total Absorption

No
Change

Drop
-26%

Rise
+8%

Drop
-27%

Drop
-12%

Drop
-18%

Drop
-6%

Unsold Supply

Rise
+11%

Rise
+9%

Rise
+21%

Rise
+3%

Rise
+2%

Rise
+2%

Rise
+4%

Capital Values
(Oct 2013 vs Oct 2012)

Rise
+27%

Drop
-7%

Rise
+13%

Rise
+22%

Rise
+33%

Drop
-9%

Rise
+43%

Avg. Annual Future


Committed Units / Avg.
Annual Delivered Units

5.5 x

1.9 x

2.0 x

1.1 x

1.9 x

2.2 x

1.3 x

Positive

Neutral

Negative

PROPEQUITY

46

Creating Investor Intelligence

Disclaimer
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contained in this document or made available in association with any further assessment. This
report may not be reproduced without prior written consent of PropEquity.
This report has been prepared for informational purposes and upon the understanding that it will
be used only for the purposes set forth above. Any projections of financial or operating results,

market forecasts, etc. are based on estimates by the Company and PropEquitys market analysis.
Hence, there can be no assurance that such results will be realized.
In furnishing this report, PropEquity does not undertake any obligation to provide interested parties

with access to any additional information. This report shall not constitute an indication that there
has been no change in the business or affairs of the Company since the date hereof.
Inquiries and requests for more information relating to these materials should be directed to
PropEquity.

PROPEQUITY

Creating Investor Intelligence

Thank You

PROPEQUITY
Creating Investor Intelligence