PROPERTY INSIGHTS

India Quarter 4, 2011

Underlying demand will continue to prevail

INDIA MARKET OVERVIEW

Indias economic growth has slowed down Even in the backdrop of uncertainities, the performance of the various real estate sectors in the country has been consistent with commercial office space sector showing great degree of resilience with substantially high absorption levels during the year in review. Retail sector too, inspite of high inflationary conditions in the economy, witnessed quite a few major retailers, both national and international, expanding their operations. Mall supply which remained subdued during 2010 saw major improvement with most cities witnessing major projects becoming operational. In the residential sector, though the developers initiated new project launches, buyers demonstrated catiousness in purchase decisions, thereby restraining major price escalations in the segment. considerably. Sectors such as banking & finance, trade, hospitality,

insurance & business services,

transport,communication and electricity, gas & water supply recorded the best performances and primarily powered the countrys GDP growth to 6.9% during the period July-September 2011. High rates of inflation continues to prevail though some moderation was observed in food inflation in November 2011. Rupee continued to remain under stress since August 2011 weakening to an all-time low at more than INR 52 against the US dollar in December 2011. A deceleration in investment flows were observed with FDI inflows registering major decline in wake of the uncertainty in the global macroeconomic situation and tightening of liquidity in most countries.

INDIA ECONOMIC OVERVIEW

Trends & Updates
According to Central Statistical Organization estimates, during the period July-September 2011, Indias Gross Domestic Product (GDP) at factor cost (at 2004-05 prices) recorded a growth of 6.9%. This was a significant decline compared to 8.4% growth recorded during the same period in the previous year. Finance, insurance & business services, trade, hotels, transport, communication sector and electricity, gas & water supply were the primary growth drivers. Performance of agriculture and construction as well as the manufacturing sectors continues to remain low. Moreover, high rates of inflation have also resulted in lowering the growth rate.

In Mid Quarter Monetary Policy Review, December 2011, Reserve Bank of India (RBI) maintained the repo
Growth Rate (%)
12% 9.6% 10% 8% 6% 4% 2% 0%

GROSS DOMESTIC PRODUCT GROWTH RATE

and reverse repo rates at 8.5% and 7.5% respectively. This was primarily on account of the decelerating domestic growth rates and to cushion the economy from persistent financial uncertainties and worsening global economic outlook. The trend of overall depreciation in the rupee against the US dollar which was observed in AugustSeptember 2011 persisted during October-December 2011. In spite of the RBIs intervention by bringing about interest rate revision, the rupee has been under

9.3%

9.3%

9.7% 8.5% 8.6% 7.6% 6.1% 7.5% 5.8% 6.0% 6.5% 8.8%

8.9% 8.3% 7.8% 7.7% 6.9%

10.1%

9.7%

9.4%

8.6%

Source: Central Statistical Organisation, of India Source: Central Statistical Organisation, Govt. Govt. of India
EXCHANGE RATE MOVEMENT (INR/USD)
54 52 50 48 47 47 47 46 46 45 44 46 47 47 47 46 44 45 45 45 45 45 49 48 45 45 45 44 51 53

stress. The Indian rupee weakened to an all-time low against the US dollar at more than 52 in December 2011. High inflationary conditions in the economy coupled with high global commodity prices and uncertainties have also been crucial determinants. However, as per industry analysts, the rupee depreciation is expected to be positive for the country as it will boost exports in view of the slowing economy.

INR/ USD

48 46 44 42 40

44

Source: MInistry of Finance, Govt.of India Source: MInistry of Finance, Govt.of India

EXCHANGE RATE MOVEMENT (INR/USD)

54 52 50 48 47 47 47 46 46 45 44 46 47 47 47 46 44 45 45 45 45 45 49 48 45 45 45 44 51 53

INR/ USD

The third quarter of 2011-2012 witnessed investors continuing with a cautious approach in view of the global uncertainties and the prevailing macroeconomic instability. The Foreign Direct Investments (FDI) inflow in the housing and real estate sector witnessed significant decline and was recorded at approximately INR 87 crores during the first month of the third quarter of 2011-2012. The decline was by about 74% compared to the same time period in 2010-2011. The total inflow as such stood at INR 2,130 crores for the period April-October 2011. The BSE Realty Index continued with its subdued trend during the week ended 30th December 2011 closing at 1375.65 points. The index which closed at 2870.59 points in January 3rd 2011 registered a decline by about 52% by the end of the year 2011. The index continued to touch 2000 points till the last week of July 2011 recording minor variations in the course. However, by the end of August 2011, the uncertainties in the global markets accentuated anxiety levels; thereby the index remained quite conservative.

48 46 44 42 40

44

Source: MInistry of Finance, Govt.of India Source: MInistry of Finance, Govt.of India

BSE REALTY INDEX

4500 4000 3500 3000

Index

2500 2000 1500 1000 500 0

Source: BSE

Source: BSE

Though the property prices appreciated in early 2011 and developers initiated launch of new projects, the cautious demand levels resulted in lowering the developers profit margins and in some cases, even pressuring them.

Residential Overview
During the period October-December 2011, the capital values of the residential properties across the countrys major metros remained stabilized. Marginal appreciation was observed only in the city of Chennai during the quarter in review. Most of the appreciation was recorded in the first two quarters of 2011; and by July 2011 the countrys major metros witnessed stabilization in the values. This was to a great extent accentuated by high borrowing rates creating pressure on affordability. Moreover, cautious approach of buyers with regard to purchases/investments also resulted in the prices to remain at the same level. The southern region dominated new residential unit launches, accounting for approximately 59% of the total launches during the period OctoberDecember 2011. Most of the new unit launches during the period under review were recorded in the mid segment category. In Chennai, Hyderabad and Pune, most of the launches were in the mid-end category while NCR, Bangalore and Mumbai witnessed a balanced mix of both high and mid-end segment launches. On account of the uncertainty prevailing in the market with high inflation projections for 2012, an immediate reversal in the interest rate is unlikely. This may lead to continuation of the borrowing rates on the higher side, which may consequently create pressure on the affordability factor. Moreover, anticipation in the market prevails of a price decline in the short to medium term. Though the demand level is likely to remain cautious, the underlying demand for housing units and unavailability of suitable housing options will continue to prevail.
New unit launches (%)
Source: Cushman & Wakefield Research
Bangalore (Burnton Road Lavalle Road) Hyderabad (Banjara Hills) Mumbai (South) Pune (Koregaon Park) Chennai (Boat Club) Kolkata (Ballygunge) NCR (Satya Niketan Anand Niketan)

RESIDENTIAL CAPITAL VALUES GROWTH INDEX

800 700 600 500 400 300 200 100 -

Source: Cushman & Wakefield Research

NEW RESIDENTIAL UNIT LAUNCHES ACROSS LOCATIONS IN 4Q 2011

40% 35% 30% 25% 20% 15% 10% 5% 0%

35%

16% 11% 13% 8% 9% 8%

Featured Story: The Year Gone By Real Estate Market in 2011

Housing Markets across India exhibit varying trends
During the year 2011, the Indian real estate market was characterized by cautious sentiments. The housing market registered mixed trends during the year. While demand in the property market strengthened in the first half of the year, towards the second half of 2011, the housing market was governed by subdued market sentiments. The dampened sentiments in the market could be attributed to the uncertainty in economic conditions, inflationary pressures, rising home loan rates, and high price points across majority of residential markets.

Owing to the prevailing uncertainties, the capital values across markets registered slower appreciation in comparison to the growth recorded in 2010. Among the major cities, NCR, Bangalore, Chennai and Kolkata have registered higher escalation in property rates. Several residential precincts in these cities registered substantial appreciation in the range of 21-31% in property prices. Other markets such as Hyderabad, Mumbai and Pune witnessed slower growth in capital values. The appreciation in these markets was registered in the range of 2-13% during the year. During the year, select markets in Mumbai and Hyderabad also witnessed price corrections on account of moderation in demand. Mid-end markets across major cities, driven by inherent demand, have fared better in comparison to the high-end markets. Several mid-end markets have clocked growth of more than 25% in 2011. The leasing market in the residential sector remained buoyant during 2011. Markets in proximity to the office districts and with better connectivity witnessed substantial demand during the year. Postponement of purchasing decisions by end users
50000 40000

Capital Values across major residential Capital Values acrossmajor residential markets markets
100% 80% 60% 30000 40% 20000 20% 10000 0% -20%

Rajiv Gandhi Salai (Perungudi)

South Central

Jubilee Hills

South Central

South Central

Nugambakkam

South Central

Banjara Hills

Poes Garden

South West

Kukatpally

Gurgaon

Gurgaon

O Central

North East

South East

South East

Boat Club

Central

Central

T. Nagar

Mumbai

NCR

Bangalore

Chennai

Madhapur, Gachibowli

Hyderabad

Kolkata

Average capital values in December 2011 (INR/sq.ft.)

Source: Cushman & Wakeeld Research

Change from Peak Value (In %)

Source: Cushman & Wakefield Research

further propelled the demand for rental properties across most markets, especially during the second half of 2011. Cities such as Bangalore and Chennai witnessed maximum appreciation in rental values on account of increased demand. Select markets in these cities recorded rental escalations in the range of 45-55%. While majority of markets across India registered healthy demand, Mumbai can be singled out as the only market to register correction in rental values, primarily on account of prevailing high price points and increased availabilities.

Commercial Office and Retail Markets in 2011

According to Cushman & Wakefield Research, office space absorption in 2011 has increased by 8% over the previous year. The total absorption during
In Million sq.ft.
12 11 10 9 8 7 6 5 4 3 2 1 0 0.55 0.4 1.36 4.46 5.1 4.54 4.8 4.1 3.26 1.97 6.4 6.23 4.4 2.6

Office Supply and Absorption 2011 across major cities

11.53 9.04

the year was recorded at 35.51 msf. The supply on the other hand, registered a decline of almost 20% helping reduce the demand-supply gap marginally. Overall office space vacancy in India has remained high at 18%. Among the major cities, Bangalore registered the highest absorption of 11.53 msf. along with additional pre commitments of 5 msf. for next year. Chennai and NCR have also witnessed a considerable growth in the absorption of 32% and 15% respectively over the previous year. Rentals across most micro markets remained stable for the most part during 2011 barring Mumbai CBD Nariman Point (8-9% drop) and peripheral ORR micro market (11% increase) in Bangalore.

Supply 2011

Absorption 2011

Source: Cushman & Wakefield Research

Source: Cushman & Wakeeld Research

In the retail sector, the country awaited major policy measures regarding approving FDI in multibrand retail, allowing 100% FDI in single brand retail along with the implementation of Goods and Services Tax (GST). During the first half of 2011, end consumer demand persisted and retailers seemed
4

North

confident of expansion. NCR, Bangalore, Pune, Mumbai and Chennai witnessed healthy mall supply catering to this demand. Most of the mall supply was seen to come up in peripheral locations. However, both Hyderabad and Kolkata did not see any fresh mall supply during 2011. In cities like Chennai, NCR, Hyderabad and Kolkata rental values remained stable mostly across malls during the second half of the year in view of lack of supply. Simultaneously, a lack of availability of mall space pushed retailers to opt for main streets across the major cities. Hence, main streets continued to register increased enquires from national and international retailers. Rentals in

main streets in CBD in most major cities witnessed significant y-o-y appreciation. The year also witnessed several land mark initiatives by the government for the real estate sector. The remarkable announcements were the introduction of the Land Acquisition Reforms & Rehabilitation Bill, The Real Estate Regulatory Bill, 100% allowance of FDI in single brand retail and the new development norms in some States. Although many of the bills are yet to be enacted and approved by the parliament, it is still worthy to note that these are the first steps in the right direction aimed to institutionalize the sector.

Going Ahead
Indian housing market is expected to remain cautious on account of uncertain global economic conditions. The trends exhibited by major cities across India are likely to prevail over the next few quarters. Bangalore, Pune and Mumbai are expected to witness several residential launches in the next few quarters. Limited availability of ready properties is likely to put positive pressure on several premium markets across major cities. Capital values across majority of locations are expected to remain stable or register moderate appreciation. However the rental markets across several cities are likely to remain active resulting in rental escalations. Commercial office space market in 2012 is expected to be driven by steady demand. Space uptake by firms in the IT/ITES and BFSI space are likely to remain as the primary demand drivers. While majority of the office districts are expected to register stable rentals, CBD markets in cities like Pune, Kolkata and Chennai along with suburban markets in locations like NCR and Hyderabad are expected to register slight appreciation in the short term. This may be attributed to the limited availability of grade A space in these locations. On account of supply that is anticipated in major cities, the vacancy levels are expected to remain stable or register mild fluctuations in cities like NCR, Pune and Chennai. Contrary to other markets, Bangalore and Hyderabad are expected to register a dip in vacancy rate due to the growing demand. Indian retail market is likely to continue on the growth trajectory in 2012. Increased retailer interest both by international and domestic retailers is expected to persist in the market, further boosted by the policy approval for 100% FDI allowance in single brand retail and industrys expectations of at least an allowance of 51% FDI in multibrand retail. Approximately 9.9 msf of mall supply is anticipated in the year 2012 across the major cities of which the NCR, Mumbai and Bangalore are likely to register 2.2 msf of mall supply in the first half of the year. Majority of the retail markets are expected to see stability in terms of mall rentals with the anticipated increase in availability of mall space. On the other hand, prime main street markets across the major cities are likely to witness escalation in rentals due to the demand driven by increased retailer interest and scarcity of space.

Index
Ahmedabad Bangalore Chennai Hyderabad Kolkata Mumbai National Capital Region Pune 7 10 14 17 20 23 26 30

Ahmedabad
Market Overview
Ahmedabad witnessed a moderate spate of transaction activity in the fourth quarter of 2011 in the residential segment. Capital values have remained stable across all micro markets so as to sustain demand. More sales are witnessed in readily available properties as it is preferred by end users due to which some projects nearing completion have shown appreciation in capital values. Construction activity was witnessed in Ring Road and Thaltej catering to the mid-segment. Some of these projects include Shreekunj High end Apartments (Nidhi Group) and Sapphire (Shree Shivam Corporation) which are likely to be available for possession by mid 2012. The Ahmedabad Urban Development Authority (AUDA) has announced the development of a 60m wide, 76 km long city level Ring Road estimated at a cost of Rs.335 crores to add to the 2 ring roads already operational. The ring road will help in better connectivity to Sanand and will divert the regional traffic that enters city roads, hence reducing congestion.
Price (INR/sft)-December 2011

Premium Ready Residential Property Values in December'11

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2,850 2,600 2,600 4,500

Source: Cushman & Wakefield Research

Trends & Updates

Ready Residential Property Update
Due to its proximity to major commercial hubs Satellite and Prahlad Nagar have seen a 17% and 7% appreciation in capital values in the high end segment. Developers are offering various incentives and favourable payment schedules to increase demand.

Average Capital values High end (INR 000/Sq.ft.)

Location Satellite Vastrapur S.G.Highway Prahlad Nagar Q1 2010 3.8-4.3 3.4-3.7 3.5-4.1 4.0-5.0 Q2 2010 3.9-4.6 3.6-4.0 3.5-4.1 4.1-5.0 Q3 2010 4.0-4.6 3.6-4.0 3.6-4.3 4.2-5.2 Q4 2010 4.0-4.8 3.7-4.0 3.7-4.3 4.2-5.3 Q1 2011 4.3-5.0 3.7-4.0 3.7-4.3 4.2-5.3 Q2 2011 4.3-5.1 3.7-4.0 3.7-4.5 4.2-5.3 Q3 2011 4.3-6 3.7-5 3.7-4.5 4.2-6 Q4 2011 4.3-6 3.7-5 3.7-4.5 4.2-6

Source: Cushman and Wakefield Research Note: The above values for high segment typically include units of 2,000-4,000 sq.ft.

Average Capital values Mid range (INR 000/Sq.ft. Location Satellite Vastrapur S.G.Highway Prahlad Nagar Q1 2010 2.8-3.4 2.6-3.2 2.8-3.4 2.7-3.3 Q2 2010 2.8-3.6 2.6-3.3 2.8-3.4 2.7-3.3 Q3 2010 2.8-3.8 2.6-3.5 3.0-3.6 2.8-3.6 Q4 2010 2.8-3.8 2.6-3.5 3.0-3.8 2.8-3.6 Q1 2011 2.8-4.1 2.6-3.6 3.3-4.1 2.8-3.6 Q2 2011 2.8-4.2 2.6-3.8 3.3-4.2 3.0-4.0 Q3 2011 2.8-4.3 2.6-3.8 3.3-4.3 3.2-4.2 Q4 2011 2.8-4.3 2.6-3.8 3.3-4.3 3.2-4.2

Source: Cushman and Wakefield Research Note: The above values for mid segment typically include units of 1,200-1,800 sq.ft.

New Residential Launches

Ahmedabad witnessed just 2 significant launches in the fourth quarter of 2011. Newer residential developments are launched along the GandhinagarAhmedabad Road and Satellite road. The city has witnessed restrained new projects in this quarter due to the liquidity crisis faced by developers and high interest rates. However, new projects are expected to launch in the coming quarter.

Project Name Orchid elegance Pacifica Reflections

Developer Dhyaana Reality Pacifica Companies

Location Bopal Off Ring Road

Number of Units* 240 220

Area of Units 2BHK: 1215sq.ft. to 1285sq.ft. 3BHK: 1490sq.ft. to 1545sq.ft. 2BHK: 1325sq.ft. to 1425sq.ft. 3BHK: 1600sq.ft. to 1900sq.ft.

* Estimated and as per market information

Under construction Residential Property Update

Construction activity has witnessed a slowdown in the last quarter. Residential projects under construction are mainly concentrated in locations such as Ring Road, S.G. Highway and Bopal.

Office
Ahmedabad witnessed a total commercial supply of around more than 4.3 lakh sft for the year and 1.3 lakh sft for the quarter. A 14% year on year drop in supply compared to 2010. The city saw absorption of just over 1 lakh sft for the fourth quarter of 2011. The absorption for 2011 stood at 4.2 lakh sft with S.G Highway and Satellite Road contributing 61% of total absorption.

Retail
Ahmedabad witnessed fresh mall supply of around 7 lakh sft in the form of Alpha One at tVastrapur. The mall includes anchor stores like HyperCity and Shoppers Stop with retailers such as Nike, Tommy Hilfiger, Pepe Jeans and Samsonite. Modest demand and relatively high vacancy rates have kept rental values unchanged from the last quarter.

Outlook
Prices in the residential markets are expected to move upwards in the coming months. Most new projects are expected in the mid-end range segment. Commercial office space rentals in the CBD area may witness an increase due to limited grade A supply. However, rentals are expected to remain stable across other micro markets due to moderate demand and current vacancy levels. Ahmedabad is not expected to witness any new mall supply during the first quarter of 2012. Rental values across malls and main streets are expected to remain stable so as to sustain demand.

Bangalore
Market Overview
A cautious approach by both the end-users as well as the investors continued to prevail in Bangalores residential market on account of high price points in most markets and high interest rates. Capital values mostly remained stable during the fourth quarter of 2011. New project launches continued during the quarter though the market had substantial availability, as significant numbers of projects were launched during the year, thereby offering buyers with a wide range of options to choose from. With the infrastructure development works like the flyover constructions, metro rail as well as elevated highways commencing in full swing across the city, the immediate micro markets as well as adjacent ones are witnessing increased prominence. Bangalore office market continued with its buoyant trend registering high demand levels. Quite a few significant big ticket deals were closed during the quarter. However, demand for spaces in the range of 3,000-20,000 square feet was dominant and comprised of almost 60% of the number of deals closed during the quarter. Vibrancy persisted in the citys retail market with two major malls becoming operational during the quarter. Continued interest was observed from retailers across segments and quite a few new lease deals were also closed during the quarter across the upcoming malls.
Source: Cushman & Wakeeld Research Source: Cushman & Wakefield Research

Premium Ready Residential Property Values in December'11

8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 4,100 7,000 5,750 4,450 5,250 4,500

Price (INR/sft)-December 2011

Trends & Updates

Ready Residential Property Update
Demand to a great extent remained subdued for ready/second generation properties on account of the high price points quoted coupled with the high interest rates for mortgages. An anticipation of a decline in prices prevailed. Moreover, investors were also apprehensive as the rentals fetched were comparatively on the lower side relative to the capital investments. Buyers had a wide range of options to choose in new developments/ launches, wherein they were able to secure discounts, thereby tilting the scale in favour of developer stock. As a result, investors primarily in high-end properties faced difficulties in exiting their investments as it was unfeasible for lowering their quotes considering their initial capital investments. Second generation properties maintained their capital values in view of substantial availability in new properties or project launches. However, no incident of distress sales or reduction in the prices was observed across the second generation properties.

10

Average Capital values High end (INR000/Sq.ft.) Location Central South Off Central East North 2009 12.00-14.50 6.00-8.50 5.00-6.60 5.60-7.00 5.50-7.00 Q1 2010 12.00-15.00 5.50-9.00 5.00-6.60 5.60-6.80 5.50-6.50 Q2 2010 13.00-16.00 5.80-9.00 5.00-6.80 6.00-7.00 5.50-6.80 Q3 2010 13.00-16.00 5.80-9.00 5.00-6.80 6.00-7.00 5.50-7.00 Q4 2010 13.50-17.5 6.00-9.50 5.00-7.00 6.50-7.50 5.50-7.00 Q1 2011 13.60- 17.60 6.10-9.70 5.20-7.10 6.50-7.70 5.70-7.00 Q2 2011 14.00-18.00 6.50-10.00 5.50-7.50 6.80-8.00 6.00-7.40 Q3 2011 14.00-18.00 6.50-10.00 6.00-8.50 6.80-8.00 6.50-8.00 Q4 2011 14.00-18.00 6.50-10.00 6.00-8.50 6.80-8.00 6.50-8.00

Source: Cushman and Wakefield Research Note: The above values for high segment typically include units of 3,000-5,000 sq.ft.

Average Capital values Mid range (INR000/Sq.ft.) Location Central East South East South North South West Off Central* Off Central** North West 2009 5.00-6.00 2.40-2.70 2.50-3.20 4.60-5.70 2.80-4.00 2.70-3.90 3.70-5.70 3.30-5.70 3.50-5.20 Q1 2010 5.00-6.50 2.40-2.90 2.50-3.50 4.60-5.70 2.60-4.30 2.90-3.90 3.70-5.70 3.50-5.70 3.50-5.10 Q2 2010 5.20-6.60 2.70-3.00 2.70-3.80 4.60-5.80 2.80-4.30 3.00-4.30 3.80-5.90 3.60-5.90 3.80-5.40 Q3 2010 5.50-7.00 2.70-3.00 2.80-4.00 4.80-6.00 2.80-4.30 3.20-4.50 4.00-6.20 3.80-6.20 3.80-5.60 Q4 2010 5.50-7.00 2.70-3.10 2.80-4.00 4.80-6.00 2.80-4.40 3.20-4.50 4.00-6.20 3.80-6.20 3.80-5.60 Q1 2011 5.60-7.10 2.70-3.30 2.80-4.30 4.80-6.30 2.80-4.50 3.30-4.70 4.20-6.40 3.90-6.40 3.90-5.80 Q2 2011 5.80-7.40 3.00-3.50 3.00-4.50 5.00-6.50 3.00-4.80 3.60-5.00 4.50-6.70 4.30-6.70 4.30-6.20 Q3 2011 6.00-7.50 3.20-3.80 3.40-5.00 5.00-6.50 3.00-4.80 3.60-5.00 4.50-6.70 4.30-6.70 4.30-6.20 Q4 2011 6.00-7.50 3.20-3.80 3.40-5.00 5.00-6.50 3.00-4.80 3.60-5.00 4.50-6.70 4.30-6.70 4.30-6.20

Source: Cushman and Wakefield Research Note: The above values for mid segment typically include units of 1,700-2,500 sq.ft.

Key to Locations:
High Segment Central: Lavelle Road, Off Palace Road, Off Cunnigham Road, Ulsoor Road, Richmond Road South: Koramangala, Outer Ring Road, Bannerghatta Road, JP Nagar Off Central: Frazer Town, Benson Town, Richards Town, Dollars Colony East: Whitefield (villas) North: Hebbal, Yelahanka, Jakkur, Devanahalli East: Marathalli, Whitefield, Airport Road South East: Sarjapur Road, Outer Ring Road, HSR Layout South: Koramangala, Jakkasandra South West: Jayanagar, J P Nagar, Kanakpura Road, Bannerghatta Road, BTM Layout North: Hebbal, Bellary Road, Yelahanka, Dodballapur Road, Jalahalli Off Central*: Vasanth Nagar, Richmond Town, Indiranagar Mid Segment Central: Brunton Road, Artillery Road, Ali Askar Road, Cunningham Road North West: Malleshwaram, Rajajinagar Off Central*:* Cox Town, Frazer Town, HRBR, Benson Town, etc

11

New Residential Launches

Bangalore continued to witness some major new launches from the prominent developers. The new launches recorded during the quarter also included formal launches of projects which were pre-launched in the earlier quarters. New project launches were across upper, mid as well as lower segment brackets with a mix of apartment and villa developments.
Project Name The Promont DLF Maiden Heights Developer Tata Housing DLF Homes Location Banashankari Rajapura

Moreover, the southern peripheries of the city were observed to account for most of the new launches during the quarter. Marketing of pre-launched projects was also observed with developers offering customized discounts and value added services to the buyers for quick uptakes in their projects. * Estimated and as per market information
Number of Units* 320 696 Area of Units 3BHK: 2376sq.ft. to 2522sq.ft. 4BHK: 3024sq.ft. to 3033sq.ft. 2BHK: 913sq.ft. to 925sq.ft. 3BHK: 1222sq.ft. to 1230sq.ft.

* Estimated and as per market information

Under Construction Residential Property Update

Significant numbers of projects were launched during the year and the same commenced construction leading to substantial availability in the market. This provided the buyers with a wide range of options to choose across different price bands, type of developments and locations among others. During the quarter in review, consistent work progression was recorded in the under construction projects. In view of substantial availability in new properties, no significant appreciation in the capital values of these projects was observed barring a few exceptions. Moreover, developers continued to offer customized discounts and value added services without bringing about any direct reduction in the capital values.

Office
During the fourth quarter of 2011, the commercial market in the city however, exhibited growth with comparatively high demand levels despite the discomfort in the market on account of the global uncertainties. Absorptions were clocked at approximately 3.09 msf and rentals mostly remained stabilized across all micro markets. Supply remained subdued during the first half of the year; however, during the last two quarters it showed marked improvement. Supply totaled approximately 2.33 msf, during the fourth quarter of 2011. The vacancy levels in the city registered a decline to approx. 12%as on 4Q 2011 from 16% (4Q 2010) on account of good absorption levels coupled with constricted infusion of supply.

12

Retail
During the fourth quarter of 2011, the commercial market in the city however, exhibited growth with comparatively high demand levels despite the discomfort in the market on account of the global uncertainties. Absorptions were clocked at approximately 3.09 msf and rentals mostly remained stabilized across all micro markets. Supply remained subdued during the first half of the year; however, during the last two quarters it showed marked improvement. Supply totaled approximately 2.33 msf, during the fourth quarter of 2011. The vacancy levels in the city registered a decline to approx. 12%as on 4Q 2011 from 16% (4Q 2010) on account of good absorption levels coupled with constricted infusion of supply.

Outlook
Demand is likely to remain cautious in the initial months of 2012 with buyers adopting a wait and watch policy in view of the high price points as well as the high borrowing rates. Further capital value escalations are unlikely and prices are expected to remain stable in the forthcoming quarters. New project launches are likely to continue with most developers initiating pre-launch of their projects at discounted prices to gauge the tempo of the market and consumer attitude to pricing and product offering. Locations in the North and South peripheries of the city are likely to see greater share in the project launches. High land, construction and other associated costs may compel the developers to launch projects at higher price points. Developers, however, are expected to continue offering customized discounts and better bargains to ensure quick uptakes in their projects. Approximately 11msf of new supply is expected in the commercial office space segment in 2012. During the initial months of 2012, the absorption levels will remain on the higher side. Marginal scarcity of space options, as a result, is likely to prevail in early 2012. Vacancy rates too may come down marginally or remain stable. Three new mall developments are likely to become operational by the first half of 2012. On account of the already high rentals commanded, prime rents are likely to continue at the same level. Retailer interest too is expected to remain persistent.

13

Chennai
Market Overview
Demand for residential properties in Chennai continued to remain healthy during the last quarter of 2011. Developers continued to launch projects in the suburban and peripheral locations in order to capitalize on the demand in these locations. The leasing activity remained buoyant during the fourth quarter of 2011. Locations such as Poes Garden, Kilpauk and Adyar noticed substantial appreciation in the high-end segment. In the mid-end segment, Adyar, Anna Nagar and Nungambakkam recorded significant rental appreciation during the quarter.
Price (INR/sft)-December 2011
* Estimated and as per market information
5,000 15,000 25,000

Premium Ready Residential Property Values in December'11

22,000
20,000

19,500

13,500 9,000 12,500

10,000

Trends & Updates

Ready Residential Property Update
Premium residential markets such as Boat Club and Poes Garden registered marginal appreciation driven by the inherent demand. Demand for ready property remained significant during the quarter. High-end markets such as R.A. Puram, Adyar and Kilpauk also saw revision in prices, driven primarily by the resale activity.
Average Capital values High end (INR 000/sq.ft.) Location Boat Club R.A Puram* Besant Nagar Kotturpuram Adyar Poes Garden** Nungambakkam Anna Nagar Kilpauk 2008 18-24 13-15 NA NA 5.5-10 14.5-20 13-16 6-9 4-8 2009 18-20 13-15 NA NA 5.5-9.5 14.5-18 13-16 6-9 4-8 Q1 2010 18-21 13-16.5 NA NA 6-11 14.5-19 13-16.5 6.5-10 5-9 Q2 2010 18-21 13-16.5 NA NA 8-12 14.5-19 13-16.5 7.5-10.5 6-9.5 Q3 2010 18-21 13-16.5 NA NA 8-12 14.5-19 13-16.5 7.5-10.5 8-11 Q4 2010 18-23 13-16.5 NA NA 8-12 14.5-20 13-16.5 7.5-10.5 8-12 Q1 2011 19-23 13-16.5 NA NA 8-12 15-20 13-16.5 8-10.5 8. 5-12 Q2 2011 19-23.5 13-16.5 NA NA 8-12 15.5-20.5 13-16.5 8-10.5 8. 5-12.5 Q3 2011 20-24.5 13-16.5 12.5-13.5 12-14 10-13.5 15.5-23.5 13-17 8-11.5 8.5-12 Q4 2011 20-25.0 14-17 12.5-13.5 12-14 11.5-13.5 17.5-24.5 13-17 8-11.5 9-15

The suburban markets saw an improved demand for ready property due to the uncertainty over completion of several under construction projects. With no significant demand, majority of the mid-end segment markets remained stable.

Source: Cushman & Wakefield Research Note: The above values for high segment typically include units of 1,800-4,000 sq.ft. The time series have been adjusted to reflect the updated values *RA Puram also includes Alwarpet and Abhiramapuram **Poes Garden also includes Venus Colony and Kasturi Rangan Road

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Average Capital values Mid range (INR 000/sq.ft.) Location Adyar Rajiv Gandhi Salai (Perungudi) Velachery T Nagar Mylapore Mogappair Kilpauk 2008 4.5-6.5 2.5-3.6 3.8-4.2 4-6.5 NA NA 4.5-6 2009 4.5-6.5 2.5-2.8 3.5-4 4-6.5 NA NA 4.5-6 Q1 2010 5-6.5 2.5-3.25 3.5-4.5 5-6.5 NA NA 5-6 Q2 2010 6-8.5 3-4 3.5-5 6.5-9 NA NA 5-7 Q3 2010 6-8.5 3.5-4.5 3.5-5 7.5-10.5 NA NA 5-8 Q4 2010 6-8.5 3.5-4.5 3.5-5 7.5-10.5 NA NA 6-8 Q1 2011 6-8.5 3.8-5 3.5-5 7.5-10.5 NA NA 6-8.5 Q2 2011 6-8.5 4-5.5 3.5-5.3 7.7-11 NA NA 6.5-8.5 Q3 2011 6.5-10 4-5.5 3.5-5.5 8-11 8-12.5 5-5.5 7-9 Q4 2011 8-11 4-5.5 3.5-5.5 8.5-11.5 8-12.5 5-5.5 7.5-9.5

Source: Cushman & Wakefield Research Note: The above values for mid segment typically include units of 1,000-2,000 sq.ft. The time series have been adjusted to reflect the updated values

New Residential Launches

New launches trend during the last quarter of 2011 remained subdued. The uncertainty prevailing over market conditions has resulted in fewer launches compared to the previous quarters. Majority of the launches were registered in the suburban and peripheral locations, though concentrated more in the southern residential pockets of Chennai. Substantial number of launches was registered in Rajiv Gandhi Salai and GST Road. Prominent developers such as Vijay Shanthi Builders and Landmark Construction were noticed to unveil new projects during the quarter. Majority of the projects that were rolled out catered to the mid-end segment while the supply in the high-end segment was sluggish.

Project Name Tivoli Boulevard

Developer Landmark Construction Vijay Shanthi Builders

Location Mogappair Vandalur-Kelambakkam Road East Avenue, Korattur Potheri, GST Besant Nagar

Number of Units* 88 332

Area of Units 2BHK: 1200sq.ft. to 1400sq.ft. 3BHK: 1500sq.ft. to 1800sq.ft. 3BHK: 1170sq.ft. to 1278sq.ft. Row Houses: 2255sq.ft. to 2275sq.ft. 3BHK: 1660sq.ft. 2BHK & 3BHK: 650sq.ft. to 1012sq.ft. NA

Aspects Valencia Green 201

Landmark Constructions ICIPL Kgeyes Builders

24 16 585

* Estimated and as per market information

Under construction Residential Property Update

The prices for majority of under construction projects continued to remain stable. The developers refrained from increasing prices in order to improve the momentum of sales. However, select projects nearing completion in suburban markets were noticed to register marginal appreciation during the quarter. The handover of projects including Hiranandani Upscale, HIRCO Palace Gardens and Temple Green are happening in a phased manner. Several projects such as Lancor Central Park South and DLF Garden City are expected to hand over some of their apartments during the first quarter of 2012.

15

Office
During the fourth quarter of 2011, Chennai witnessed significant office space absorption of approximately 1.88 msf. with the uptake of office space in SEZs gaining momentum. Contrary to the buoyant absorption registered during the quarter, influx of supply remained sluggish. The market registered a supply of just 0.1 msf. Limited supply and buoyant demand resulted in moderation of vacancy levels (16.3% for fourth quarter 2011) in the fourth quarter of 2011. Despite the healthy demand scenario, rental values during the last quarter remained stable on account of cautious market sentiments.

Retail
Retail market in Chennai was characterized by dearth of prime retail space. Scarcity of space in main streets resulted in significant rental appreciation in majority of the retail precincts in Chennai. Khader Nawaz Khan Road and Anna Nagar 2nd Avenue registered the maximum appreciation in the range of 13-16% during the quarter. In malls, absorption in several centrally located malls resulted in an overall lower vacancy of 6.6% during the quarter. Despite much anticipation, there was no mall supply recorded during the quarter. The mall rentals exhibited a stable trend during this time period.

Outlook
The cautious demand in the market is expected to result in stable capital values across most residential markets. Despite anticipating a drop in property registrations, the developers might restrict decreasing the capital values in view of rising construction costs. The rental values are likely to continue appreciating during the next few quarters on account of buoyant demand. In the commercial office space markets, rentals are expected to remain stable. However, grade A buildings in CBD locations might register a slight appreciation due to the insufficient supply in this market. Persistent demand for retail space in the main streets is likely further exert a positive pressure on the rental values during 2012. Mall supply of approximately 850,000 sf is expected to be infused in the first quarter of 2012 with rentals likely to remain stable over the next few months.

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Hyderabad
Market Overview
The uncertainty over the land reservation regulation has continued for the fourth quarter in a row. With no clarity on provision of LIG and EWS housing, developers have further delayed announcing new projects. Unlike the last 6 months, Hyderabad residential market has witnessed some launches this quarter in the form of project extensions and reBHKanding / relaunching of old projects. Subdued political turmoil, stability in prices and various promitional offers towards the end of the year have resulted in a higher number of enquiries, thereby recording a marginal rise in sales in key residential localities such as Miyapur, Gachibowli, Madhapur and Kukatpally. Projects in prime residential localities with locational advantages and that are in the final stages of completion have witnessed a growth in number of enquiries. The commercial office space market in
Price (INR/sft)-December 2011

Premium Ready Residential Property Values in December '11

12000 10250 10000 8550 8000 6000 4650 4000 2000 0 4100 8000

5200

Source: Cushman & Wakefield Research

Hyderabad has regained momentum towards the end of 2011.Demand for office space was recorded at over 1.6msf, which is nearly 60% higher than Q3. In the retail market, overall demand has remained on the lowerside as comapred to the previous quarters. Upcoming malls such as Manjeera Trinity and Manjeera Majestic have witnessed some precommitments during this quarter.

Trends & Updates

Ready Residential Update
Property prices have recorded mixed trends across the city during this quarter. High-end projects recorded marginal appreciation in most micro markets including Madhapur and Gachibolwi. Overall market conditions, especially in the mid-end segment, looked favourable as compared to the last two quarters, thus encouraging developers to evaluate their options in terms of sales and promitional activities . Projects in the medium segment in Miyapur and its surroundings have recorded a 6-8% growth in capital values. Prices have gone up by 8-12% in few projects that are close to the IT and Financial districts and are ready for immediate possession.

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Average Capital values High end (INR 000/sq.ft.) Location Banjara Hills Jubilee Hills Himayatnagar West & East Marredpally Begumpet, Somajiguda Madhapur, Gachibowli Kukatpally Miyapur, Nizampet Road 2008 6.5-7.1 6.5-7.1 3.4-4.4 3.3-4.3 3.9-4.5 3.8-4.4 3.3-4.3 Not Available 2009 5.8-6.5 5.5-6.3 3.3-4.0 3.3-3.8 3.9-4.5 3.5-4.3 3.3-4.0 2.6-3.3 Q1 2010 6.0-6.7 5.7-6.6 3.5-4.0 3.3-3.9 3.9-4.5 3.7-4.5 3.5-4.3 2.7-3.4 Q2 2010 6.0-7.0 5.7-7.0 3.7-4.0 3.5-4.0 4.1-4.5 3.8-4.5 3.5-4.3 2.7-3.4 Q3 2010 6.0-7.0 5.7-7.0 3.5-4.0 3.5-4.0 4.1-4.5 3.8-4.7 3.5-4.5 2.7-3.4 Q4 2010 6.0-7.2 6.0-7.0 3.7-4.0 3.5-4.0 4.1-4.5 3.8-4.9 3.5-4.5 2.7-3.4 Q1 2011 6.0-7.4 6.0-7.0 3.7-4.0 3.5-4.2 4.1-4.7 3.8-5.0 3.5-4.8 2.7-3.4 Q2 2011 6.3-7.4 6.2-7.0 3.7-4.0 3.6-4.2 4.3-4.7 4.0-5.0 3.8-4.8 2.7-3.4 Q3 2011 6.3-7.5 6.2-7.1 3.7-4.0 3.6-4.2 4.3-4.7 3.9-5.0 3.8-5.0 2.8-3.4 Q4 2011 6.4-7.5 6.2-7.2 3.7-4.2 3.6-4.3 4.3-4.8 3.9-5.3 3.8-5.1 2.8-3.5

Source: Cushman and Wakefield Research The above values for high end typically include units of 1,600-3,200 sq.ft.

Average Capital values Mid range (INR 000/sq.ft.) Location Banjara Hills Jubilee Hills Himayatnagar West & East Marredpally Begumpet, Somajiguda Madhapur, Gachibowli Kukatpally Miyapur, Nizampet Road 2008 3.4-4.2 3.4-4.0 2.6-3.0 2.5-3.0 2.5-3.0 2.6-3.0 2.4-2.8 Not Available 2009 3.6-4.2 3.5-4.0 2.7-3.0 2.5-2.8 2.6-3.1 2.5-3.1 2.4-2.9 1.8-2.5 Q1 2010 3.6-4.3 3.7-4.0 2.7-3.2 2.5-2.9 2.8-3.1 2.5-2.9 2.6-3.2 1.8-2.5 Q2 2010 3.6-4.3 3.7-4.0 2.7-3.5 2.7-3.0 2.8-3.5 2.6-3.2 2.6-3.2 1.8-2.5 Q3 2010 3.6-4.5 3.7-4.0 2.7-3.5 2.7-3.0 2.8-3.5 2.6-3.2 2.6-3.2 1.8-2.5 Q4 2010 3.6-4.5 3.7-4.0 2.7-3.5 2.7-3.0 2.8-3.5 2.6-3.4 2.7-3.2 1.8-2.5 Q1 2011 3.6-4.5 3.7-4.0 2.7-3.5 2.7-3.0 2.8-3.5 2.6-3.4 2.7-3.2 1.8-2.7 Q2 2011 3.8-4.5 3.9-4.2 2.7-3.5 2.8-3.0 2.9-3.5 2.8-3.4 2.9-3.2 2.4-2.7 Q3 2011 3.8-4.6 4.0-4.2 2.7-3.5 2.8-3.0 2.9-3.5 2.8-3.3 2.9-3.3 2.4-2.7 Q4 2011 3.8-4.6 4.0-4.2 2.7-3.7 2.8-3.2 2.9-3.6 2.8-3.5 2.9-3.5 2.4-3.0

Source: Cushman and Wakefield Research The above values for mid range typically include units of 1,200-1,600 sq.ft.

New Residential Launches

Seven projects totalling approximately 1,700 units were launched across the high-end and mid-end segments in the upcoming locations of Miyapur, Nizampet and Gachibowli. Majority of the projects launched during this quarter were either approved prior to the land reservation clause or are extensions of ongoing projects.
Project Name Babukhan Lakefront Purple Town Aparna Hill Park Avenues Vertex Prime Eden Park PBEL Phase II Rajapushpa Retreat Developer Babukhan Properties Manjeera Constructions Aparna Constructions Vertex homes pvt. Ltd Aditya Constructions PBEL property development (India) Pvt.Ltd Rajapushpa properties Pvt.Ltd Location Kokapet Gopanpally, Gachibowli Miyapur Nizampet Road Nallagandla, Gachibowli Bandlaguda, APPA Junction Kokapet Number of Units* 40 47 647 284 80 394 168 Area of Units 4BHK+4T: 2885sq.ft. to 3678sq.ft. 4BHK+4T: 3400sq.ft. 2BHK+2T: 1150sq.ft. to 1340sq.ft. 3BHK+3T: 1400sq.ft. to 1670sq.ft. 2BHK+2T: 1140sq.ft. 3BHK+3T: 1280sq.ft. to 1470sq.ft. 3BHK+3T: 1805sq.ft. to 2380sq.ft. 2BHK+2T: 1077sq.ft. to 1269sq.ft. 3BHK+3T: 1289sq.ft. to 1703sq.ft. 2BHK+2T: 1250sq.ft. 3BHK+2T: 1410sq.ft. to 2085sq.ft.

Mid-end housing projects continue to concentrate on Miyapur, Nizampet and the immediate surroundings due to their proximity to the IT and financial districts and presence of large pool of potential buyers.

* Estimated and as per market information

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Under construction Residential Property Update

Property prices across the city have mostly remained stable during Q4. Madhapur and Gachibowli witnessed a minor appreciation especially in the projects that are close to completion. Some projects with successful completion of Phase I have witnessed 8-10% increase in property prices for the second phase. Moderately stable prices and steady political environment along with several promotional offers by the developers have attracted the buyers during this quarter. The number of enquires have gone up this quarter as several potential buyers evaluated properties, mainly in key residential catchments. Projects such as Empress Towers, Rainbow Vistas, Aparna Hill Park Avenues, Vertex Prime, PBEL City and Green Grace have witnessed a growing number of enquiries considering successful completion of the earlier projects by the developers and locational advantages.

Office
The market recorded approximately 1.25 msf of office space absorption during the fourth quarter. Demand for SEZ space was clearly evident through pre-commitments of over 4 lakh sft, especially in the suburban micro markets, which include Madhapur and Gachibowli.
Despite healthy absorption and a growth in enquiries, office rentals have remained stable due to continued infusion of second generation space and availability of space options across all micro markets.

Retail
Large format stores, which are rapidly expanding into tier-II cities, have continued negotiations in suburban locations such as Attapur, Mehdipatnam, LB Nagar and Chandanagar during this quarter. Retailers who adopted a wait and watch approach during the third quarter have started actively exploring space options towards the end of 2011 due to stability in the political environment. Continued scarcity of space in operational malls has lead to a growth in enquires in upcoming malls such as Manjeera Trinity and Manjeera Majestic in Kukatpally.

Outlook
The political factors which influenced the city during the second half seems to have stabilized giving a positive outlook for 2012. The residential market is likely to witness a moderate growth in during 2012. Several new project launches are likely if the current regulation on land reservation gets resolved. Property prices across the city are likely to remain stable thru first half of 2012. The overall demand is likely to grow due to reasonably stable prices and continued supply. Majority of the upcoming SEZ supply in 2012 is already pre-committed. The shortage of grade A supply is likely to continue in the commercial office space market during 2012. In the retail market, some large format stores may get operational in the suburbs by the end of 2012. As retailers are becoming more flexible in terms of suitability of space, demand for small format stores is likely to remain healthy in prime retail locations such as Banjara Hills and Jubilee Hills over the next two quarters.

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Kolkata
Market Overview
During the fourth quarter of 2011, Kolkatas residential market witnessed reduced transaction activities across the micro markets. Buyers seemed to defer buying decisions due to rising interest rates and high inflation. Clarity over the States Land Acquisition policy was not provided, which influenced developers and financial investors to take a wait and watch approach. Along with Rajarhat, which remains the hub of real estate activities in the city, peripheral locations like Garia and Barasat also assumed increased importance. Keeping with the global market sentiments and the countrys reduced growth rate, the office markets in Kolkata witnessed slightly moderate absorption. Total absorption was recorded at around just over 2 lakh sft. in the fourth quarter, dropping by more than 50% in comparison to last quarter. Retail markets in Kolkata exhibited less vibrancy in terms of transactions as lack of supply remained a major concern for retailers; retail establishments in CBD continued to witness high occupancy.
Price (INR/sft)-December 2011 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 6500 6000 4500 5500

Premium Ready Residential Property Values in December'11

8500 8500

Source: Cushman & Wakefield Research

Trends & Updates

Ready Residential Property Update
High-end properties across the city witnessed a 6 - 8% quarterly appreciation in view of lack of supply. Capital values remained stable compared to last quarter. However, they witnessed more than 20% y-o-y appreciation in the high-end segment and more than 25% y-o-y appreciation in the midend segment.

Average Capital values High end (INR 000/Sq.ft.) Location South South Central South East South West Central East North East 2008 5.0 - 6.0 9.0-10.0 4.5-5.7 9.5-10.0 7.5-8.5 4.0-5.0 2.5-3.0 2009 4.8-5.9 8.5-9.6 4.5-5.7 8.6-9.8 7.2-8.1 4.0-4.7 2.4-2.9 Q1 2010 4.9-6.0 8.5-10.0 4.5-6.0 8.7-10.0 7.3-8.5 4.0-4.7 2.4-3.0 Q2 2010 5.3-6.5 9.5-11.5 4.5-6.3 8.9-11.5 7.5-9.0 4.0-4.8 2.4-3.4 Q3 2010 5.3-6.8 9.5-13.0 4.5-8.0 8.9-13.0 7.5-9.2 4.0-4.9 2.4-3.9 Q4 2010 5.3-6.8 9.5-13.0 4.5-8.0 8.9-13.0 7.5-9.2 4.0-4.9 2.4-3.9 Q1 2011 6.0-8.0 9.5-14.0 5.0-8.5 10.0-12.0 7.8-9.5 4.2-5.0 2.6-4.2 Q2 2011 6.3-8.0 10.0-17.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.3 2.8-4.5 Q3 2011 6.3-8.5 10.0-18.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.5 2.8-4.5 Q4 2011 6.3-8.5 10.0-18.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.5 2.8-4.5

Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sq.ft.

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Average Capital values Mid range (INR 000/Sq.ft.) Location South South Central South East North East North 2008 2.8-4.3 4.5-5.5 2.5-3.0 1.8-2.2 1.8-3.5 2009 2.7-3.9 4.2-5.3 2.4-2.8 1.9-2.2 1.8-3.4 Q1 2010 2.9-4.0 4.3-5.4 2.4-2.9 2.0-2.2 1.9-3.5 Q2 2010 3.2-4.5 4.5-5.8 2.4-3.2 2.0-2.3 2.0-3.7 Q3 2010 3.2-4.5 4.5-6.0 2.5-3.3 2.2-2.7 2.2-4.7 Q4 2010 3.2-4.5 4.5-6.0 2.5-3.2 2.2-2.7 2.2-4.7 Q1 2011 3.2-5.0 5.0-7.0 2.7-4.0 2.3-2.8 2.3-4.8 Q2 2011 3.8-5.5 5.5-7.2 2.8-4.5 2.4-3.0 2.8-5.2 Q3 2011 3.8-5.5 5.5-8.0 2.8-4.5 2.4-3.0 2.8-5.2 Q4 2011 3.8-5.5 5.5-8.0 2.8-4.5 2.4-3.0 2.8-5.2

Source: Cushman and Wakefield Research NNote: The above values for mid-end segment typically include units of 1,600-2,000 sq.ft.

Key to Locations:
Key to Locations: South*: Southern Avenue, Dover Lane South Central*: Ballygunge, Queens Park, Rainy Park, Gurusaday Road, etc. South East: EM Bypass SouthWest: Alipore Park Road, Ashoka Road, Central: Lansdowne, Park Street East: Salt Lake North East: Rajarhat South**: New Alipore, Golf Green, Tollygunge, etc. South Central**: Hindustan Park North: Kankurgachi, Lake Town, Jessore Road, Ultadanga, etc.

Belvedere Road, etc.

New Residential Launches

Almost 1,300 units were launched during the fourth quarter, compared to 1,776 units in the last quarter. Most of the project launches were in the midend segment. Both peripheral markets and Rajarhat New Town witnessed almost an equal number of project launches. Most of the projects launched during this quarter were priced between Rs.1,500/- to Rs.4,500/-. Significantly, the presence of individual developers was more prominent in comparison to large corporate developers.

Project Name Siddha Sphere

Developer Siddha Group

Location Rajarhat New Town

Number of Units* 297

Area of Units 2BHK: 845sq.ft. to 1105sq.ft. 3BHK: 1090sq.ft. to 1415sq.ft. 1BHK: 479sq.ft. to 509sq.ft. 3BHK: 1963sq.ft. to 2046sq.ft. 4BHK: 2494sq.ft. to 2615sq.ft.

Purnasons Magnolia City Greentech City

Magnolia Infrastructure Group Vedic Realty & Diamond Group

Shastri Road, Barasat Rajarhat New Town

222 200

* Estimated and as per market information

21

Under construction Residential Property Update

Under construction projects by reputed developers in Rajarhat New Town have witnessed at least 5% appreciation over the last quarter. However quite a few large format projects by reputed developers in New Town Rajarhat area have seen slow construction work primarily due to the lack of infrastructure facility.

Office
During the fourth quarter, Kolkatas office market exhibited a balanced trend of supply and absorption. Total absorption during this quarter was recorded at almost 0.21 msf sft, while total supply during the quarter was nearly 0.24m sf. Although the absorption was less compared to last quarter, the quarter reported the highest fresh absorption of the year. Interestingly, the total demand during this quarter was generated by regional corporate companies which mainly included BFSI and engineering companies.

Retail
Kolkatas retail market witnessed a sluggish trend during the last quarter of the year. In spite of increased enquiries from retailers, the transactions were reduced as availability of space in prime locations was a major concern. In view of lack of supply in malls coupled with very low vacancy in existing malls, retailers were then inquiring for main street locations, which pushed the main street rentals significantly upward in the CBD.

Outlook
The residential market in Kolkata is expected to see a vibrant scenario in 2012 in terms of new launches and transactions. However, if inflation rises further, sales in mid-end segment may be hampered. Growth of high-end segment is likely to be stable. Peripheral locations like Barasat in North and Garia in South will continue to continue to witness increased importance due to more number of affordable project options and improved infrastructure facility. Uncertainties over West Bengal Governments Land Acquisition policy may dampen the mindset of developers and financial investors. Hence supply scenario may be restricted. Retail markets will continue to see a low supply situation. Hence retailers will opt for main streets in CBD and peripheral locations with good catchment. Therefore main street rentals will continue to appreciate in the short term.

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Mumbai
Market Overview
The residential market in Mumbai has witnessed a slowdown during the last quarter. This is primarily due to a slower pace in construction activity by builders due to a liquidity crunch.
20,000 40,000

Premium Ready Residential Property Values in December'11

37,500 38,000

30,000

30,000

Residential capital values have remained stable for most micro markets in Mumbai as developers have refrained from price correction despite the high input costs and high cost of funding. End users have shown more interest for projects nearing completion in the mid range segment resulting in appreciation of capital values in some projects in select micro markets. During the quarter, office space supply was registered at 2.6 msf, whereas less than a million square feet was absorbed during the same period. The CBD witnessed an 8.3% drop due to low demand, whilst all the other micro markets showed stability in rentals. With the micro markets of Kurla
10,000

10,500

12,500

Price (INR/sft)-December 2011

Source: Cushman & Wakefield Research

and Malad contributing majorly, the year witnessed a healthy supply of 2.2 msf of mall space. Main street rentals witnessed appreciation of about 4-12% over the last quarter due to limited availabilities and high demand. Large infrastructure projects such as the Mumbai metro and monorail projects are currently facing delays of around 6 months, though further delays may still be expected.

Trends & Updates

Ready Residential Property Update
Capital values at prime residential locations are expected to reduce so as to maintain demand for existing projects. However, high-end residential capital values in Central Mumbai and mid range capital values in South Central have witnessed a 4% and 2% drop respectively.

Average Capital values High end (INR000/sq.ft.) Location South South Central Central North Far North North East 2008 43-55 47-67 33-53 27-31 9-13 14-18 2009 42.5-58 42- 66 34-55 22-30 10-16.5 10-16 Q1 2010 42.5-58 42-66 34-55 22-30 10-16.5 10-16 Q2 2010 43-60 45-70 35-55 24-31 11-16.5 10-16 Q3 2010 43-60 45-70 35-55 24-31 11-16.5 10-16 Q4 2010 43-60 45-70 35-55 24-32 11-16.5 10-16 Q1 2011 43-60 45-70 35-55 24-32 11-16.5 10-16 Q2 2011 45-65 45-75 35-55 24-32 11-16.5 10-17 Q3 2011 45-65 45-75 35-55 24-32 11-16.5 10-18 Q4 2011 45-65 45-75 32-54 24-32 11-16.5 10-18

23

Average Capital values Mid range (INR000/sq.ft.) Location South South Central Central North Far North North East 2008 27-34 34-43 18-28 13.5-19.5 7-9 6-7.4 2009 28-37 35-45 15-26 16-24 8.5-11.5 6.4-8.5 Q1 2010 28-38 36-46 15.5-27 16-24 9-12 6.5-8.5 Q2 2010 30-40 40-48 15.5-30 16-24 9-12 6.5-8.5 Q3 2010 30-40 40-48 15.5-30 16-24 9-12 6.5-8.5 Q4 2010 30-40 40-48 17-30 16-25 9-12 6.5-8.5 Q1 2011 30-40 40-48 17-30 16-25 9-12 6.5-8.5 Q2 2011 30-40 40-48 17-30 16-25 9-12 7-8.5 Q3 2011 30-40 40-48 17-35 16-25 9-13 7-10 Q4 2011 30-40 39-47 17-35 16-25 9-13 6.5-10

Note: High End - Approximately 2,500 sq.ft. to 6,000 sq.ft. for South, South Central, Central and North (Bandra & Khar) - Approximately 1,800 sq.ft. to 4,000 sq.ft. for North (Santacruz & Juhu), Far North and North East

Mid Range for Approximately South, South 1,400 sq.ft. to 2,500 and sq.ft. North

Central,

Central

- Approximately 1,200 sq.ft. to 1,600 sq.ft. for Far North and North East

Key to Locations:
South: Colaba, Cuffe Parade, Nariman Point, Central: Worli, Prabhadevi, Lower Parel/ Parel North: Bandra (W), Khar (W), Santacruz (W), Juhu, etc. Far North: Andheri (W), Malad, Goregaon, etc. North East: Powai Churchgate, etc. South Central: Altamount Road, Carmichael Road, Malabar Hill, Napeansea Road, Breach Candy, Pedder Road, etc.

New Residential Launches

Mumbai witnessed just 2 significant launches in the fourth quarter of 2011 as developers have refrained from launching new projects due to the prevailing
Project Name Island City Center 1 & 2 Samarpan Exottica Developer Bombay Reality Kanakia Spaces Location Dadar Borivali Number of Units* 700 136 Area of Units 3BHK: 1500sq.ft. to 1800sq.ft. + (300 sq.ft. terrace) 4BHK: 2000sq.ft. to 2400sq.ft. + (300 sq.ft. terrace) 2BHK: 1180sq.ft. 2.5BHK: 1450sq.ft. 3BHK: 1580sq.ft.

economic uncertainties and reduced demand from buyers.

Source: Cushman & Wakefield Research

Under construction Residential Property Update

Construction activity has witnessed a slowdown in Mumbai during the last quarter with developer delaying delivery of projects due to liquidity concerns and a slowdown in demand from both end users and investors. Under construction projects have maintained price points quoted in the previous quarter while projects nearing completion have witnessed a minor appreciation. Also, developers are offering various incentives and favourable payment schedules to increase demand.

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Office
With few deals materializing, Mumbai has witnessed a moderate spate in commercial office space transactional activity in the fourth quarter of 2011. During the quarter, office space supply was registered at 2.6 msf; where as the total demand was estimated to be 0.9 msf. For the whole year, Mumbai witnessed a commercial supply of 10.4 msf, mainly concentrated in the western suburbs of Andheri, Goregaon and Malad which contributed close to 48% of the total supply. Whilst all the secondary and peripheral micro markets showed stability in the commercial rentals, the CBD witnessed an 8.3% drop due to low demand.

Retail
Market City Kurla admeasuring 1 msf became operational during the fourth quarter of 2011. The year has witnessed a healthy supply of 2.2 msf of mall space, majority of which was in the micro markets of Kurla and Malad. Main street rentals in Colaba Causeway, Kemps Corner and Vashi witnessed appreciation of about 8%, 12% and 4% respectively over the last quarter due to limited availabilities and high demand.

Outlook
A slowdown in construction activity is further expected, which would result in restrained residential supply in the coming months. End users are adopting a wait and watch policy for either home loan rates or capital values to reduce in the coming quarters.
An upcoming commercial office space supply of 2.3 msf in the next quarter coupled with current vacancy levels would keep rentals stable. Mall rentals in locations like Malad, Lower Parel and Linking Road may witness an upward pressure on account of low vacancy levels. However, mall rentals in Thane are expected to remain stable as approximately 1 msf of mall supply is expected by the second quarter of 2012.

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National Capital Region

Market Overview
Overall, the end user sentiment in the NCR seems weak with delayed buying decisions in the wake of inflationary conditions, rising home loan rates, and high price points. Interestingly, a few developers in Gurgaon claimed that recent project launches in Gurgaon witnessed an upward price revision owing to good response from end users and investors alike. The values of ready property remained in a similar range as the last quarter highlighting cautiousness in the market. The office segment saw heightened real estate activity with increase in both supply and absorption compared to the last year. The supply increased significantly by 73% and demand was noted to be 14.8% higher than the previous year, driven by IT/ ITeS, insurance, consulting and engineering firms. In contrast, the retail segment saw reduced mall supply by 36% compared to last year as few malls were planned in anticipation of a slow revival. Farm houses in Delhi that were built before February 2007, and which fall in the green belt are likely to get regularized as per the proposed policy by Delhi Development Authority (DDA). The policy will apply to not only those farmhouses that have construction beyond the permissible limit, but also
Price (INR/sft)-December 2011
Source: Cushman & Wakefield Research
30,000 25,000 20,000 15,000 10,000 5,000 -

Premium Ready Residential Property Values in December'11

24,500

13,000 10,000

11,500

10,250

those that had been built without proper sanctions. Both will be regularized under the proposed policy after certain penalties. To ease traffic congestion and provide an alternate mode of transport, the Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) has suggested a 10.4-km monorail corridor - from Shastri Park to Trilokpuri in East Delhi. The connectivity from Noida to South Delhi is also likely to improve with the construction of the metro rail, which is expected to begin in January 2012 and will connect areas such as Kalkaji, Malviya Nagar, Green Park and Vasant Kunj directly. This enhanced connectivity is expected to strengthen price of select locations in Noida.

Trends & Updates

Ready Residential Property Update
NCR residential market during 2011 exhibited signs of balanced growth. The capital values registered steady growth during the first half of 2011. However, the growth during the second half of 2011 was restricted to select Delhi locations with limited supply. The trends displayed in the leasing markets in NCR during the year included the high-end markets registering marginal growth (3-5%) and mid-end markets witnessing significant growth (11-40%). Values across suburban locations during the last two quarters were noticed to stabilize due to moderation in demand. However, over the quarter the rental and capital values have remained stable over across the region highlighting stability in the markets.

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Average Capital values High end (INR 000/Sq.ft.) Location South West South East South Central Central Gurgaon Noida 2008 28-33 19-23 20-23 45-50 5.2-11 5.2-6.2 2009 29-34 21-24 21-25 40-45 5.3-12.5 5.2-6.5 Q1 2010 30-35 21-25 22-25.5 40-45 6-15 5.3-6.7 Q2 2010 30.5-35.5 21.5-25.5 23-26 40-45 6-15 5.4-6.8 Q3 2010 36-43 24-30 25-32 50-57 6.2-18 5.5-7 Q4 2010 36-43 24-30 25-32 50-57 6.2-18 5.5-7 Q1 2011 36-45 24-30 25-35 50-60 7.5-20 5.5-7 Q2 2011 40-47 25-32 27-40 50-60 8.5-21 5.5-7.5 Q3 2011 42-50 25-35 27-40 50-65 8.5-21 5.5-7.5 Q4 2011 42-50 25-35 27-40 50-65 8.5-21 5.5-7.5

Source: Cushman & Wakefield Research Note: The above values for high end segment typically include units of 2,000-4,000 sq.ft.

Average Capital values Mid range (INR 000/Sq.ft.) Location South East South Central Gurgaon Noida 2008 14-16 18-20 3.8-5.2 3-4.5 2009 14.5-16.5 18.5-20.5 4-6.5 3.2-5.5 Q1 2010 15-17.5 18.5-20.5 4.2-7 3.3-5.6 Q2 2010 15-18 19-21 4.3-7.5 3.5-5.6 Q3 2010 15-20 20-23.5 4.5-7.5 3.8-5.6 Q4 2010 15-20 20-23.5 4.5-7.5 3.8-5.6 Q1 2011 15-22 20-25 4.8-8.5 4-5.6 Q2 2011 15-25 22-27 5-9 4.2-5.8 Q3 2011 15-28 25-30 5-9 4.2-5.8 Q4 2011 15-28 25-30 5-9 4.2-5.8

Source: Cushman & Wakefield Research Note: The above values for mid range segment typically include units of 1,600-2,000 sq.ft.

Key to Locations:
High Segment South West: Shanti Niketan, Westend, Anand Niketan, Vasant Vihar South East: Friends Colony East, Friends Colony West, Maharani Bagh, Greater Kailash - I, Greater Kailash II. South Central: Defence Colony, Anand Lok, Niti Bagh, Gulmohar Park, Hauz Khas Enclave, Safdarjung Development Area, Mayfair Gardens, Panchsheel Park, Soami Nagar, Sarvodaya Enclave. Central: Jorbagh, Golf Links, Amrita Shergil Marg, Aurangzeb Road, Prithviraj Road, Sikandara Road, Tilak Marg, Ferozshah Road, Mann Singh Road, Sunder Nagar, Nizamuddin, Tees January Marg, Chanakyapuri. Mid Segment South East: New Friends Colony, Kalindi Colony, Ishwar Nagar, Sukhdev Vihar, Kailash Colony, Pamposh Enclave. South Central: Uday Park, Green Park, Saket, Asiad Village, Geetanjali Enclave, Safdarjung Enclave, Sarvapriya Vihar, Panchsheel Enclave, Navjeevan Vihar.

New Residential Launches

The first half of the year saw improved demand. However, the second half of 2011 registered cautious and subdued demand. A few developers offered freebies and discounts to potential buyers to increase sales as the sales have been stagnant leading to increase in inventories in the last two quarters. New launches in the fourth quarter catered to both mid-end and highend segments and last quarter saw the least number of launches during the year.

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Project Name Amrapali Hanging Gardens

Developer Amrapali Group

Location Sector-107, Noida

Number of Units* 1,100-1,200

Area of Units* 1BR+1T: 565sq.ft. 2BR+2T: 985sq.ft. 2BR+2T+1SR: 1075sq.ft. 3BR+2T: 1265sq.ft. High Rise 1BR+1T: 1197sq.ft. 2BR+2T: 1478sq.ft. to 1854sq.ft. 3BR+3T: 2165sq.ft. to 2813sq.ft. 4BR+4T: 3434sq.ft. 5BR+6T: 4293sq.ft. 6BR+6T: 4961sq.ft. Independent Floor 3BR+3T: 2073sq.ft. 4BR+4T: 3533sq.ft. 4BR+3T+1SR: 2372.6sq.ft. Lower Penthouse 2BR+2T: 3141sq.ft.

Revanta

Raheja Developers

Sector 78, Gurgaon

214 townhouses comprising of 770 units & 555 apartments

* Estimated and as per market information

Under construction Residential Property Update

Many developments in the high-end and mid-end segments are expected to be ready for possession in the coming months which may put pressure on the capital values. Properties in Gurgaon such as DLF Park Place, Belaire and Tata Raisana to name a few are in advance stages of construction and are likely to be delivered this year.

Office
The city witnessed significant additions of approximately 6.4 million square feet (msf) to the office stock in 2011, of which 68% consist of IT developments in the suburban location. The last quarter has seen highest completions of approximately 2.2 msf, majority (55%) of which were concentrated in the suburban location of Gurgaon. IT/ITeS, insurance, consulting and engineering firms were the main drivers for commercial office space leasing for the year resulting in 6.23 msf being occupied. The last quarter accounted for a third of the leasing activity, majority of which was noted in Gurgaon. Owing to buoyant demand, office rents across the markets appreciated in the range of 5-12% over the year with suburban locations noticing high growth compared to the CBD/Off CBD locations. However, rental values remained stable over the last quarter.

Retail
During the last quarter of the year, malls admeasuring 800,000 became operational adding to total of 2.3 million square feet (msf) of new mall space this year. Retail rents witnessed no change during the last two quarters indicating stability in most of the markets across city. However, in the year two quarters, strengthening demand amidst stable economic conditions had resulted in the expansion and entry of both domestic and international retailers across malls and main streets in the city further leading to an increase in rents.

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Outlook
Prices across suburban locations in NCR are likely to remain stable in the short term owing to moderate sales activity and cautiousness in the market. Premium locations in Delhi are expected to appreciate only marginally. The office markets are expected to see additions of approximately 2.1 msf in 1Q 2012 spread across Gurgaon and Noida. The rents in suburban locations are likely to appreciate marginally whereas rents across Delhi locations will remain stable. Approximately 1.2 msf of mall developments are likely to get complete in the first half of the year across Gurgaon, Ghaziabad and West Delhi with rentals likely to remain at current level.

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Pune
Market Overview
Pune saw moderate volumes of residential activities resulting in stable rental and capital values across most micro markets. Although the city has witnessed an increase in enquiries for residential projects, it has not resulted in an increase in capital values in fourth quarter of 2011. The sub-urban and peripheral locations of Baner, Balewadi and Hinjewadi witnessed the maximum construction activities in fourth quarter of 2011. In 2011, Pune witnessed an infusion of approximately 4.2 million square feet (msf) of commercial office space, 72% catering to SEZ space, 18% catering to IT space and 10% catering to non IT space. The city saw absorption of approximately 2.9 msf of commercial space, 69% being absorbed by IT/ITeS sector and 31% absorbed by non IT sector in 2011. During the year, commercial office space rental trend was almost stable in most micro markets across the city. However, owing to lack of new quality commercial space, as well as their premium location, the micro markets of SB Road and Wakdewadi saw an appreciation of approximately 9% in commercial rentals in 2011. Pune saw an inflow of 3.3 msf of retail space, catering towards the suburban and peripheral locations of the city in 2011. The city saw an improvement in transaction activities, which was not restricted to operational malls and high streets, but also included pre-commitments in under construction malls. Restrained availability of space in high streets has given an opportunity to landlords to command a high premium. With international brands continuing with their preference for established high streets, the micro markets of JM Road, FC Road and Aundh witnessed an appreciation in rentals.
Price (INR/sft)-December 2011
6000 5000 4000 3000 2000 1000 0 5000 3500 4600 4600 4000

Premium Ready Residential Property Values in December'11

5500

Source: Cushman & Wakefield Research

Trends & Updates

Ready Residential Property Update
The last quarter saw a couple of residential projects being completed and handed over in Pune. Some of the projects include Kool Homes at Balewadi and Rohan Mithila (First Phase) at Viman Nagar. The micro markets of Koregaon Park and Aundh did not witness any movement in capital values in fourth quarter of 2011 for the high-end segment. However, owing to the presence of commercial hubs coupled with better infrastructural facilities, Kalyani Nagar saw an increase of 5% in capital values with respect to the third quarter of 2011 in the high-end segment. The micro market of Aundh witnessed the maximum appreciation of 11% with respect to third quarter of 2011. The micro markets of Baner, Kalyani Nagar and Wanowrie saw an appreciation of approximately 5%9% with respect to third quarter of 2011 in mid-end segment.

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Average Capital values High end (INR 000/Sq.ft.) Location Koregaon Park, Bundh Garden Aundh Kalyani Nagar Wanowrie 2008 9.6-12.7 4.9-6.1 7.6-9.6 3.4-4.5 2009 8.5-10.7 5-5.2 7.3-9.2 3.3-3.6 Q1 2010 8.5-12.5 5-5.5 7.3-10.5 3.3-4.2 Q2 2010 8.5-12.5 5-5.5 7.3-10.5 3.3-4.2 Q3 2010 9-13 5-5.5 8-12 4-5 Q4 2010 9-13 5-5.5 8-12 4-5 Q1 2011 9-13 5-6 8-12 4-5 Q2 2011 9-13 5-6 8-12 4-5 Q3 2011 9-13 5-6 7.5-12 4-5.5 Q4 2011 9-13 5-6 8-12.5 4-5.5

Source: Cushman & Wakefield Research Note: The above values for high segment typically include units above 1500 sq.ft.

Average Capital values Mid range (INR 000/Sq.ft.) Location Koregaon Park, Bundh Garden Aundh Baner Wakad Kalyani Nagar Wanowrie 2008 4.5-5 3.5-4 3-3.8 2.5-3 4.5-5.5 3-3.2 2009 4.5-5.5 3.6-4.2 2.9-3.6 2.2-2.8 4.5-5.5 2.8-3.1 Q1 2010 4.5-5.5 3.6-4.5 3-4 2.4-3 4.5-5.5 3-3.2 Q2 2010 4.5-5.5 3.6-4.5 3-4 2.4-3 4.5-5.5 3-3.2 Q3 2010 4.5-6 4-5 3-4 2.6-3.4 5-6 3-3.8 Q4 2010 6-7 4-5 3.5-5.5 3.5-4 6.5-7 4-5.5 Q1 2011 6-7 4.5-5.5 3.8-5.5 3.5-4.2 6.5-7.5 4-5.5 Q2 2011 6-7 4.5-5.5 4-5.5 3.8-4.4 6.5-7.5 4-5.5 Q3 2011 6-7 4-5 4-5 3.7-4.5 6.5-7 4-4.7 Q4 2011 6-7 4.5-5.5 4-5.5 3.7-4.5 6.5-7.5 4-5.5

Source: Cushman & Wakefield Research Note: The above values for mid segment typically include units of 1,600-2,000 sq.ft.

New Residential Launches

The infusion of residential units in city catered to both high-end as well as mid-end segments. New launches were witnessed in the suburban and peripheral locations of Pune, including Hinjewadi,
Project Name Life Republic Developer Kolte-Patil Developers Limited Location Hinjewadi

Baner and Balewadi. These projects were launched at pricing levels that were almost similar to the pricing levels for new launches in the previous quarter of 2011.
Number of Units* 15,000 Area of Units 1BHK: 567sq.ft. to 595sq.ft. 2BHK: 799sq.ft. to 1215sq.ft. 3BHK: 2106sq.ft. 2BHK: 1093sq.ft. 3BHK: 1346sq.ft. 2BHK: 1000sq.ft. to 1071sq.ft. 3BHK: 1278sq.ft. to 1335sq.ft. 2BHK: 1045sq.ft. to 1185sq.ft. 3BHK: 1290sq.ft. to 1340sq.ft. 4BHK: 2495sq.ft.

Alacrity Shanti Terraces Blliss

B.U. Bhandari Landmarks Vimalraj Sancheti Developers Unique Developer

Baner Sus Pashan Road Wakad

108 68 78

* Estimated and as per market information

Under construction Residential Property Update

Residential projects such as Forest County and Tuscan Estate at Kharadi are likely to be ready for possession from 2013 onwards. Also, the construction activities have been more pronounced among the projects located in Baner, Aundh and NIBM Road.

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Office
Owing to an impending liquidity crisis coupled with an already existing inventory, the fourth quarter of 2011 saw a moderate infusion of supply in commercial spaces and was estimated at 0.6 msf, which was 67% less than the previous quarter. Majority of the supply was catering to the IT/ITeS sectors, which accounted for over 60%. There were no pre-commitments recorded during the quarter. Total absorption was recorded at approximately 0.8 msf, which registered an increase of 26% over the previous quarter. This led to moderation of the vacancy rate, which was recorded at 25%

Retail
With the launch of Kumar Pacific Mall and Abhiruchi Mall, the city saw an inflow of 0.7 msf of retail space in the fourth quarter of 2011. The city saw an improvement in transaction activities across the operational malls and established main streets. Upcoming retail developments likely to be completed in the near future had been successfully drawing interest from retailers as evident from the quantum of pre commitments in them.

Outlook
The rental and capital values for residential properties across segments are likely to remain stable across most micro markets in Pune. The excess supply coupled with moderate demand in peripheral locations is likely to put pressure on rentals. The slowdown in the economy will lead to more developers shifting their offerings towards affordable projects in Pune. The city is expected to witness an infusion of commercial office space for approximately of 0.7 msf in the next three months of 2012 catering mainly to the IT/ITeS sector. Also, the retail market in the city is likely to witness approximately 500,000 sf of additional mall supply by the first quarter of 2012.

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This research report has been prepared by Cushman & Wakefield specially for distribution to Citibank customers.

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