Tier I Cities ~ Residential Market Dynamics Oct 2013
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Transcript of Tier I Cities ~ Residential Market Dynamics Oct 2013
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Tier I Cities Residential Market Dynamics Oct 2013
PropEquity
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Index
SR. NO. TOPIC PAGE NO.
1 Glossary 3
2 Economic Snapshot 4
3 7 Prominent Cities: Real Estate Trends 7
4 National Capital Region 9
5 Mumbai Metropolitan Region 13
6 Bengaluru 17
7 Pune 21
8 Kolkata 25
8 Chennai 29
9 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
x 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
Source: RBI
9.7%
8.5%
7.8% 7.5%
6.1% 5.8%
6.3%
8.6%
7.3%
9.4% 9.3% 8.9%
8.3% 7.8% 7.7%
6.9%
6.1%
5.3% 5.5% 5.3% 4.7% 4.8%
4.4% 4.8%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2
FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14
GD
P G
row
th R
ate
Indias GDP Growth Trend
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India: A Macroeconomic Perspective
Source: MOSPI, Finance Ministry, RBI
7.2%
8.1%
4.6%
6.5%
8.5% 8.0% 7.8%
7.5% 7.3%
7.3%
7.5%
4%
5%
6%
7%
8%
9%
Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13
Perc
enta
ge
Trend ~ Inflation vs. Repo Rate Inflation (%) Repo Rate (%)
3.30% 2.60%
6.00% 6.40%
5.10% 4.60%
4.90%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Gross Fiscal Deficit as % of GDP
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
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7 Prominent Cities: Real Estate Trends
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October 2013 - Snapshot
NCR Oct
2012 Oct
2013
Supply Additions (Units)
9,683 3,944
Absorption (Units) 9,033 4,966
Unsold Supply (Units) 147,231 163,420
Weighted Average Launch Price (INR/Sft)
4,562 5,810
MMR Oct
2012 Oct
2013
Supply Additions (Units)
11,492 6,361
Absorption (Units) 6,230 3,454
Unsold Supply (Units) 152,886 166,945
Weighted Average Launch Price (INR/Sft)
6,802 6,303
PUNE Oct
2012 Oct
2013
Supply Additions (Units)
3,458 4,409
Absorption (Units) 3,559 2,268
Unsold Supply (Units) 59,526 61,530
Weighted Average Launch Price (INR/Sft)
3,825 4,682
KOLKATA Oct
2012 Oct
2013
Supply Additions (Units) 1,064 457
Absorption (Units) 1,221 710
Unsold Supply (Units) 24,025 24,424
Weighted Average Launch Price (INR/Sft)
2,987 3,962
HYDERABAD Oct
2012 Oct
2013
Supply Additions (Units) 1,670 1,490
Absorption (Units) 1,465 1,051
Unsold Supply (Units) 37,486 38,811
Weighted Average Launch Price (INR/Sft)
2,939 4,210
BENGALURU Oct
2012 Oct
2013
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
CHENNAI Oct
2012 Oct
2013
Supply Additions (Units) 4,563 506
Absorption (Units) 2,505 1,588
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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11 15
15 18
22 21 19
17 17
21
30
33
0
5
10
15
20
25
30
35
0
10,000
20,000
30,000
40,000
50,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
89
,13
3
86
,33
5
70
,94
7
70
,72
8
NCR - Supply & Absorption Dynamics
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
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
Quarterly Supply Additions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
3%
Average Quarterly Value of Launches
INR 173 Bn
Average Quarterly Value of Launches
INR 184 Bn
Average Quarterly Value of Launches
INR 168 Bn
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2,000
3,000
4,000
5,000
6,000
7,000
100
110
120
130
140
150
160
170
180
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
4,5
62 5
,81
0
14
7,2
31
16
3,4
20
NCR - Pricing & Unsold Supply Trend
Increase 26%
Decrease 3%
Increase 23%
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
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 2012
Oct 2013
Oct 2012
Oct 2013
New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
27%
11%
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0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
NCR - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
Over 5 times average annual delivery commitments between 2014 2017 in NCR Raises execution concerns
97,777 96,012 96,679 527,715
24,003 96,679 131,928
4.0x
5.5x
Y-o
-Y U
nit C
om
ple
tions
Years
UNITS COMPLETED TILL YR.
2012 ~ 96,012 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
192,691 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
720,406 UNITS
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A 5%
A 5%
A 4%
M 76%
M 68%
M 76%
L 19%
L 27%
L 21%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
A 6%
A 6%
A 3%
M 74%
M 67%
M 71%
L 20%
L 27%
L 26%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
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
Affordable 5%
Mid 71%
Luxury 24%
Segment Wise Supply Split 2011- 2013YTD
Affordable 5%
Mid 73%
Luxury 22%
Segment Wise Absorption Split 2011- 2013YTD
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MMR Mumbai, Navi Mumbai, Thane
Mumbai
Metropolitan
Region
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66
,92
2
49
,44
0
87
,50
9
60
,87
8
13 15 18
20 21 21 24 25 25
32
43 48
0
10
20
30
40
50
60
0
10,000
20,000
30,000
40,000
50,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
MMR - Supply & Absorption Dynamics Quarterly Supply Additions
Y-o-Y Comparative
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Jan-Oct 2012
Jan-Oct 2013
56% 30%
26%
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
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%
Average Quarterly Value of Launches
INR 165 Bn
Average Quarterly Value of Launches
INR 115 Bn
Average Quarterly Value of Launches
INR 122 Bn
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15
2,8
86
16
6,9
45
6,8
02
6,3
03
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
-10
10
30
50
70
90
110
130
150
170
190
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
MMR - Pricing & Unsold Supply Trend
Oct 2012
Oct 2013
New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
Oct 2012
Oct 2013
9%
7%
Increase 20%
Increase 31%
Decrease 8%
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.
Drop in average capital values in Q1 & Q2 2012 mapped to larger share of new launches in Thane & Navi Mumbai Navi Mumbai & Thane
accounted for 90% of new supply additions
Q3 & Q4 witnessed higher concentration of new supply in Mumbai, approx. 20% ~ Resulting in increased capital values
Approx. 8% increase in unsold supply in tandem with declining absorption rates inhibiting capital value escalations
Weighted average capital values on launch basis exhibited a decrease of 8%
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0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
MMR - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
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
97,777 187,550 96,050 353,441
46,887 96,050 88,360
2.0x
1.9x
Years
UNITS COMPLETED TILL YR.
2012 ~ 187,550 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
283,600 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
637,041 UNITS
Y-o
-Y U
nit C
om
ple
tions
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A 24%
A 28%
A 24%
M 53%
M 49%
M 53%
L 23%
L 22%
L 24%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
A 28%
A 30%
A 25%
M 51%
M 50%
M 47%
L 21%
L 21%
L 28%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
Affordable 28%
Mid 50%
Luxury 22%
Segment Wise Supply Split 2011- 2013YTD
Affordable 26%
Mid 51%
Luxury 23%
Segment Wise Absorption Split 2011- 2013YTD
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
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Bengaluru
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37
,59
5
40
,46
4
46
,34
1
51
,96
1
12
15 15 15
18 18
15 15 15
18
24 26
0
5
10
15
20
25
30
0
5,000
10,000
15,000
20,000
25,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
Bengaluru - Supply & Absorption Dynamics Quarterly Supply Additions
Y-o-Y Comparative
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Oct 2012
Oct 2013
56% 12%
8%
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%
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
Average Quarterly Value of Launches
INR 90 Bn
Average Quarterly Value of Launches
INR 82 Bn
Average Quarterly Value of Launches
INR 102 Bn
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65
,19
9
79
,06
6
3,7
77
4,2
59
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0
10
20
30
40
50
60
70
80
90
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
Bengaluru - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
Oct 2012
Oct 2013
Oct 2012
Oct 2013
13%
21%
Increase 10%
Increase 6%
Increase 20%
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.
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
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.
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0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
Bengaluru - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
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
97,777 85,481 43,798 167,494
21,370 43,798 41,874
2.0x
2.0x
Years
UNITS COMPLETED TILL YR.
2012 ~ 85,481 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
129,279 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
296,773 UNITS
Y-o
-Y U
nit C
om
ple
tions
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A 18%
A 14%
A 13%
M 66%
M 64%
M 68%
L 16%
L 22%
L 18%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
A 11%
A 13%
A 9%
M 67%
M 66%
M 69%
L 22%
L 21%
L 23%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
Affordable 15%
Mid 66%
Luxury 19%
Segment Wise Absorption Split 2011- 2013YTD
Affordable 11%
Mid 67% Luxury
22%
Segment Wise Supply Split 2011- 2013YTD
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
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Pune
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39
,93
5
29
,04
8
42
,90
4
30
,14
6
12 12
15 15 15 15
12
18 18
21
24
27
0
5
10
15
20
25
30
0
5,000
10,000
15,000
20,000
25,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
Pune - Supply & Absorption Dynamics Quarterly Supply Additions
Y-o-Y Comparative
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Jan-Oct 2012
Jan-Oct 2013
56% 30%
27%
Q3 2013 witnessed muted real estate activity both in terms of launches & absorption 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
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
Average Quarterly Value of Launches
INR 52 Bn
Average Quarterly Value of Launches
INR 52 Bn
Average Quarterly Value of Launches
INR 35 Bn
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59
,52
6
61
,53
0
3,8
25
4,6
82
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
30
35
40
45
50
55
60
65
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
Pune - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
Decrease 2%
Increase 7%
Increase 11%
Oct 2012
Oct 2013
Oct 2012
Oct 2013
22%
3%
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%
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
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.
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0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
Pune - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
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
97,777 127,627 49,512 136,370
31,907 49,512 34,092
1.6x
1.1x
Years
UNITS COMPLETED TILL YR.
2012 ~ 127,627UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
177,139 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
313,509UNITS
Y-o
-Y U
nit C
om
ple
tions
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A 20%
A 27%
A 18%
M 69%
M 62%
M 70%
L 11%
L 11%
L 12%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
A 25%
A 24%
A 15%
M 63%
M 64%
M 70%
L 12%
L 12%
L 14%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
Affordable 22%
Mid 67%
Luxury 11%
Segment Wise Absorption Split 2011- 2013YTD
Affordable 22%
Mid 65%
Luxury 13%
Segment Wise Supply Split 2011- 2013YTD
Pune - AML Classification
Dominant budget segment ~ Mid-End Real estate activity picking up in the Luxury segment with considerable shrinkage in Affordable
budget segment
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Kolkata
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12
,44
0
10
,90
4
17
,46
1
11
,25
1
Kolkata - Supply & Absorption Dynamics Quarterly Supply Additions
Y-o-Y Comparative
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Jan-Oct 2012
Jan-Oct 2013
56% 36%
12%
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
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
12 15 15 15 15
18
21 21 18
21
30
34
0
5
10
15
20
25
30
35
40
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply - Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
Average Quarterly Value of Launches
INR 16 Bn
Average Quarterly Value of Launches
INR 24 Bn
Average Quarterly Value of Launches
INR 15 Bn
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PROPEQUITY Creating Investor Intelligence
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24
,02
5
24
,42
4
2,9
87
3,9
62
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
5
10
15
20
25
30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
Kolkata - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
Decrease 6%
Decrease 4%
Increase 27%
Oct 2012
Oct 2013
Oct 2012
Oct 2013
33%
2%
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
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
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PROPEQUITY Creating Investor Intelligence
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0
5,000
10,000
15,000
20,000
25,000
30,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
Kolkata - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
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
97,777 32,251 13,141 62,582
8,063 13,141 15,645
1.6x
1.9x
Years
UNITS COMPLETED TILL YR.
2012 ~ 32,251 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
45,392 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
107,974 UNITS
Y-o
-Y U
nit C
om
ple
tions
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PROPEQUITY Creating Investor Intelligence
33
Affordable 27%
Mid 55%
Luxury 18%
Segment Wise Absorption Split 2011- 2013YTD
Affordable 32%
Mid 53%
Luxury 15%
Segment Wise Supply Split 2011- 2013YTD
Kolkata - AML Classification
Decreasing share of Affordable and Luxury segment launches
Consolidation of real activity in the Mid-End budget segment
A 35%
A 35%
A 23%
M 49%
M 50%
M 65%
L 16%
L 15%
L 12%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
A 25%
A 31%
A 25%
M 54%
M 50%
M 62%
L 20%
L 18%
L 13%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
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PROPEQUITY Creating Investor Intelligence
34
Chennai
-
PROPEQUITY Creating Investor Intelligence
35
25
,00
4
20
,39
1
28
,61
6
20
,41
6
Chennai - Supply & Absorption Dynamics Quarterly Supply Additions
Y-o-Y Comparative
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Jan-Oct 2012
Jan-Oct 2013
56% 29%
18%
Q3 2013 witnessed muted real estate activity both in terms of launches & absorption, however, absorptions outpacing supply additions indicate cleanup from old inventory
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% 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 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
12 12
15 15 15 15
18
15
18
21
24
27
0
5
10
15
20
25
30
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
Average Quarterly Value of Launches
INR 52 Bn
Average Quarterly Value of Launches
INR 43 Bn
Average Quarterly Value of Launches
INR 35 Bn
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PROPEQUITY Creating Investor Intelligence
36
41
,81
4
42
,85
7
3,8
35
3,4
77
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0
5
10
15
20
25
30
35
40
45
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
Chennai - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
No Change
Decrease 2%
Decrease 8%
Oct 2012
Oct 2013
Oct 2012
Oct 2013
9%
2%
High unsold supply build up in
2011 inhibited launch capital
value escalations
Weighted average price of
new launches remained
unchanged in 2011
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
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
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PROPEQUITY Creating Investor Intelligence
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0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
Chennai - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
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
97,777 45,172 35,522 97,261
11,293 35,522 24,315
3.1x
2.2x
Years
UNITS COMPLETED TILL YR.
2012 ~ 45,172 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
80,694 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
177,955 UNITS
Y-o
-Y U
nit C
om
ple
tions
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PROPEQUITY Creating Investor Intelligence
38
A 25%
A 20%
A 20%
M 56%
M 64%
M 67%
L 19%
L 16%
L 14%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
A 20%
A 14%
A 17%
M 61%
M 71%
M 70%
L 18%
L 14%
L 13%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
Affordable 22%
Mid 61%
Luxury 17%
Segment Wise Absorption Split 2011- 2013YTD
Affordable 17%
Mid 67%
Luxury 16%
Segment Wise Supply Split 2011- 2013YTD
Chennai - AML Classification
Dominant Mid-End segment ~ Registered 15% increase in supply share from 2011 to 2013
Waning Supply additions in Affordable segment
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PROPEQUITY Creating Investor Intelligence
39
Hyderabad
-
PROPEQUITY Creating Investor Intelligence
40
14
,61
1
13
,679
14
,40
7
14
,24
6
Hyderabad - Supply & Absorption Dynamics Quarterly Supply Additions
Y-o-Y Comparative
Quarterly Absorptions Y-o-Y Comparative
Jan-Oct 2012
Jan-Oct 2013
Jan-Oct 2012
Jan-Oct 2013
1%
6% 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
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
21 24
30 30
24 24 27
24 24 27
33
37
0
5
10
15
20
25
30
35
40
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
Month
s of In
vento
ry
In U
nits
Supply Absorption Dynamics
Supply (LHS) Absorption (LHS) Months of Inventory
Average Quarterly Value of Launches
INR 27 Bn
Average Quarterly Value of Launches
INR 21 Bn
Average Quarterly Value of Launches
INR 28 Bn
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PROPEQUITY Creating Investor Intelligence
41
37
,48
6
38
,81
1
2,9
39
4,2
10
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
30
31
32
33
34
35
36
37
38
39
40
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD
2011 2012 2013
INR P
er
Sft
Units
In T
housa
nds
Launch Price vs. Availability Trend
Availability Weighted Average Launch Price
Hyderabad - Pricing & Unsold Supply Trend
Unsold supply in 2011 was fairly high in Hyderabad inhibiting any capital value escalations
Weighted average price of new launches decreased by 7%
The drop in capital values can also be mapped to weak investment sentiments in Hyderabad owing to the persistent Telangana issue
2012 witnessed marginal build-up in unsold supply primarily driven by new activity in tandem with increase in capital values
Increase in capital values attributable launches in higher budget segment in regions such as Gachibowli, Madhapur, Kukatpally, etc.
Unsold supply level increases marginally by 1.5%,
However, declining absorption rate leading to increase of months of inventory
Weighted average Capital value on launch basis increase by 38% ~ primarily driven by high budget segment launches witnessed in Jubilee Hills, Hi-Tech City, Gachibowli, etc.
New Launch Pricing Y-o-Y Comparative
Unsold Supply Y-o-Y Comparative
Decrease 7%
Increase 27%
Increase 38%
Oct 2012
Oct 2013
Oct 2012
Oct 2013
43%
4%
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PROPEQUITY Creating Investor Intelligence
42
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
Hyderabad - Delivery Track Record & Future Commitments
Total Units
Average Annual Delivered & To Be Delivered Units
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
97,777 55,685 30,312 71,776
13,921 30,312 17,944
2.2x
1.3x
Years
UNITS COMPLETED TILL YR.
2012 ~ 55,685 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~
85,997 UNITS
ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2017 ~
157,773 UNITS
Y-o
-Y U
nit C
om
ple
tions
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PROPEQUITY Creating Investor Intelligence
43
A 14%
A 11%
A 8%
M 66%
M 69%
M 75%
L 21%
L 20%
L 17%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise ABSORPTION Trend
A 11%
A 13%
A 4%
M 71%
M 66%
M 71%
L 18%
L 20%
L 25%
0% 20% 40% 60% 80% 100%
2011
2012
2013
Y-o-Y Segment Wise NEW LAUNCH Trend
Affordable 11%
Mid 69% Luxury
20%
Segment Wise Absorption Split 2011- 2013YTD
Affordable 10%
Mid 70% Luxury
20%
Segment Wise Supply Split 2011- 2013YTD
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
-
PROPEQUITY Creating Investor Intelligence
PROPEQUITY Creating Investor Intelligence
Snapshot - Jan-Oct 2013 vs. Jan-Oct 2012
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PROPEQUITY Creating Investor Intelligence
45
Snapshot - Jan-Oct 2013 vs. Jan-Oct 2012
Parameters NCR MMR Bengaluru Pune Kolkata Chennai Hyderabad
Supply Addition
Total Absorption
Unsold Supply
Capital Values (Oct 2013 vs Oct 2012)
Avg. Annual Future Committed Units / Avg. Annual Delivered Units
Drop -3%
Drop -30%
Rise +12%
Drop -30%
Drop -36%
Drop -29%
Drop -1%
No Change
Drop -26%
Rise +8%
Drop -27%
Drop -12%
Drop -18%
Drop -6%
Rise +11%
Rise +9%
Rise +21%
Rise +3%
Rise +2%
Rise +2%
Rise +4%
Rise +27%
Drop -7%
Rise +13%
Rise +22%
Rise +33%
Drop -9%
Rise +43%
5.5 x 1.9 x 1.1 x
1.9 x 2.2 x 1.3 x 2.0 x
Positive Neutral Negative
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PROPEQUITY Creating Investor Intelligence
46
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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.
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PropEquity.
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PROPEQUITY Creating Investor Intelligence
PROPEQUITY Creating Investor Intelligence
Thank You