You are on page 1of 4

MumbaiRealEstate

PositivesurpriseinDecunlikelytosustain
January17,2012 Kejal Mehta kejalmehta@plindia.com +91-22-66322246 Dhrushil Jhaveri dhrushiljhaveri@plindia.com +91-22-66322232 BSESensexv/sMumbaiRealEstate
BSE Realty SENSEX Mumbai (Ex DB Realty)

Sales registrations surprise positively at 5,891, down only 9% YoY In lieu of fewer launches this festive season, higher secondary market transactions may have caused the spurt in December 2011 sales Private Equity funds coming to the developers rescue in these times of liquidity stress Lease registrations flat (+1%) YoY at 8,444

Registrationssurprisepositively,trendreversalunlikely
December 2011 sales registrations have surprised positively, registering only a 9% YoY decline and a 45% MoM increase. The December number needs to be viewed in the context of the fewer launches witnessed in this years festive season. Higher transactions in the secondary market could have led to the better-than-expected sales registrations. However, anecdotal evidence continues to suggest a continued tough time faced by the developers. We would wait for data in the coming months to ascertain if this is a reversal in trend or just a monthly blip. In a recent transaction, IL&FS has invested ~Rs2bn in 8.3 acre Bharatmill project of Indiabulls Real Estate, pegging the land parcels value at a substantial premium to Rs15.8bn which Indiabulls had paid in the NTCmills auction in November 2010. The premium looks extremely high, given the oversupply in Central Mumbai micro market, coupled with the fact that parking FSI rules have also been modified post the auction, whereby a builder is now required to pay the BMC (40% of unearned revenue) to get additional parking FSI. Also, in another recent deal, OmkarRealtors raised ~Rs2.5bn from RedFortCapital for its Malad slum rehab project. Thus, private equity funds seem to be coming to the developers rescue in these times of liquidity stress. In terms of lease transactions, December numbers stood at 8,444, exhibiting a flattish trend, with a growth of 1% YoY (down 2% MoM).

130

80

30

Oct-10

Apr-10

Apr-11

Oct-11

Jul-10

Jan-10

Jan-11

Jul-11

Source:Bloomberg

StockPerformance (%) 1M Sensex 4.5 BSERealEstate 8.7 Ajmera Realty Godrej Properties HDIL Hubtown Indiabulls RealEst. Oberoi Realty Orbit Corporation Peninsula Land Phoenix Mills Sunteck Realty 16.6 (3.8) 27.0 6.4 20.6 7.0 44.7 25.9 18.7 (9.7)

Jan-12

Exhibit1: Trailing3monthSalesRegistrationsinMumbai 6M (12.8) (28.0) (28.2) (20.9) (55.8) 0.4 (52.7) (0.9) (9.9) (27.8) (11.7) (2.0) 12M (14.3) (36.2) (36.0) 7.2 (54.6) (18.5) (52.0) (5.0) (40.3) (32.1) (8.2) (44.0)
25,000 23,000 21,000 19,000 17,000 15,000 13,000 11,000 9,000 7,000 5,000

(nos)

Aug-08

Aug-09

Aug-10

Aug-11

Nov-09

Nov-10

May-09

May-10

Source:DGRMumbai,PLResearch
Prabhudas Lilladher Pvt. Ltd. and/or its associates (the 'Firm') does and/or seeks to do business with companies covered in its research reports. As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision. Please refer to important disclosures and disclaimers at the end of the report

May-11

Nov-08

Nov-11

Feb-09

Feb-10

Feb-11

SectorUpdate

(nos)

(nos)

100%

150%

200%

50%

0%

-50%

10,000

12,000

10,000

2,000 2,000 4,000 6,000 8,000


Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11

4,000

6,000

8,000

January 17, 2012


Source:DGRMumbai,PLResearch Source:DGRMumbai,PLResearch Exhibit2: Trailing3monthYoY%growth Exhibit6: RegistrationofLeaseAgreementsinMumbai Exhibit4: RegistrationofSaleDeedagreementsinMumbai

Source:DGRMumbai,PLResearch

(YoYgr.) (YoYgr.)

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

43% 63% 81% 100% 128% 143% 140% 122% 106% 74% 37% 16% 9% -1% -6% -12% -19% -24% -24% -25% -28% -23% -21% -21% -28% -26% -24% -23% -18%

15% 5%

25%

35%

-25%

-15%

-5%

70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% 100% 50% 0% -50%

150%

200%

Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11


0%

Source:DGRMumbai,PLResearch
9% 9% 11% 10% 12% 16% 2% 20% 18% 7% 26% 15% 21% 10% 12% 17% 3% -19% 7% 0% 12% 11% 19% 4% 23% 23% 20% 34% 32% 1% 58%

Source:DGRMumbai,PLResearch
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Source:DGRMumbai,PLResearch

10% 10% 11% 12% 10% 12% 13% 15% 18% 17% 21% 15% 15% 13% 11% 5% 6%

Exhibit3: Trailing3monthleasesYoY%growth

Exhibit5: YoY%growthinSaleDeedregistrations

Exhibit7: YoY%growthinLeaseAgreementregistrations

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

28% 38% 65% 97% 85% 122% 178% 123% 113% 128% 79% 22% 19% 9% -1% -13% -3% -20% -29% -21% -22% -30% -30% -1% -27% -31% -25% -22% -25% -20% -9%

Mumbai Real Estate

Nov-11

19% 20% 16% 14% 8% 14% 11% 15% 16%

33% 23%

(YoYgr.)

(YoYgr.)

100%

150%

200%

50%

0%

-50%

-100%

100%

150%

200%

50%

0%

-50%

January 17, 2012


11% 0% 11% 39% 41% 54% 70% 79% 37% 64% 68% 8% -19% 5% -20% -23% 15% 13% -5% -23% -3% -32% -44% -22% -9% -12% -6% -5% 107% 146% 87%

Source:DGRMumbai,PLResearch
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
31% 47% 79% 99% 94% 125% 185% 144% 125% 141% 79% 20% 12% 0% -3% -12% -4% -21% -30% -26% -26% -34% -32% -1% -26% -27% -26% -24% -27% -23%

Source:DGRMumbai,PLResearch
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 (YoYgr.)

Exhibit10: MumbaiSuburbSaleDeedRegistrations

Exhibit8: MumbaiIslandCitySaleDeedRegistrations

(YoYgr.)

250% 200% 150% 100% 50% 0% -50% -100%

20%

40%

60%

80%

0%

-40%

-20%

Source:DGRMumbai,PLResearch
11% 9% 13% 12% 12% 12% 0% 19% 16% 7% 28% 17% 22% 24% 12% 17% -1% -20% 36% 10% 23% 36% 2% 10% 10% 8% 6% 23% 31% 11%

Source:DGRMumbai,PLResearch

Exhibit11: MumbaiSuburbLeaseAgreementRegistrations
64%

Exhibit9: MumbaiIslandCityLeaseAgreementRegistrations
228% -6% 21% -15% 27% -63%

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

9% -3% -5% 12% 45% 13% 21% 29% 11% 19% 7% 17% -66% 17% 16% 30% -18% 11% -12% 1% 18% -10% 27% 14%

Mumbai Real Estate

Mumbai Real Estate

Prabhudas Lilladher Pvt. Ltd. 3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai-400 018, India Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209 RatingDistributionofResearchCoverage

60%

56.9%

%ofTotalCoverage

50% 40% 30% 20% 10% 0% Buy Accumulate Reduce

20.4%

20.4%

2.2% Sell

Accumulate Sell TradingSell UnderReview(UR) : : : : Outperformance to Sensex over 12-months Over 15% underperformance to Sensex over 12-months Over 10% absolute decline in 1-month Rating likely to change shortly

PLsRecommendationNomenclature
BUY Reduce TradingBuy NotRated(NR) : : : :

Over 15% Outperformance to Sensex over 12-months Underperformance to Sensex over 12-months Over 10% absolute upside in 1-month No specific call on the stock

This document has been prepared by the Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India (PL) and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of PL. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, PL has not independently verified the accuracy or completeness of the same. Neither PL nor any of its affiliates, its directors or its employees accept any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient's particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Either PL or its affiliates or its directors or its employees or its representatives or its clients or their relatives may have position(s), make market, act as principal or engage in transactions of securities of companies referred to in this report and they may have used the research material prior to publication. We may from time to time solicit or perform investment banking or other services for any company mentioned in this document. ForClients/RecipientsinUnitedStatesofAmerica: All materials are furnished courtesy of Direct Access Partners LLC ("DAP") and produced by Prabhudas Lilladher Pvt. Ltd. ("PLI"). This material is for informational purposes only and provided to Qualified and Accredited Investors. You are under no obligation to DAP or PLI for the information provided herein unless agreed to by all of the parties. Additionally, you are prohibited from using the information for any reason or purpose outside its intended use. Any questions should be directed to Gerard Visci at DAP at 212.850.8888.

January 17, 2012