C&w India Real Estate Outlook 2009

OUTLOOK 2009 INDIA REAL ESTATE OVERVIEW A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION

MARCH 2009

CONTENTS Executive Summary

1

India Economic Outlook

2

Realty Sector Outlook

4

Mumbai Market Outlook

6

NCR Market Outlook

12

Bangalore Market Outlook

17

Pune Market Outlook

22

Chennai Market Outlook

27

Hyderabad Market Outlook

32

Kolkata Market Outlook

37

Ahmedabad Market Outlook

42

End Notes

46

EXECUTIVE SUMMARY The year 2008 proved to be quite eventful for India's realty sector. Following the boom of the past couple of years, the sector was faced with the beginning of a downturn. Perhaps 'turbo-coupled' (the 'de-coupled' theory having rendered passé by now) with the global economy, by mid-2008 the effects of the US sub-prime crisis together with the stock market crash had reached Indian shores. Evaporating liquidity and gradually disappearing demand for real estate spaces lead to corrections in prices across all asset classes by end-2008. Tier-II and III cities and towns experienced a relatively lesser impact of the economic downturn in 2008. The realty sector is currently facing significant trouble on declining housing sales and unavailability of finances. Under the circumstances, as investment capacity gets impacted, large volumes of high-priced residential stock (as also, the supply pipeline) will need to re-align pricing. There is a likelihood of continued delay in execution of on-going projects as well as postponement of newer developments in the housing sector. The total supply for commercial office space across the top 1 eight cities of India in 2008 was approximately 60 million sq.ft. (about 34% higher than the previous year), with SEZ supply recorded at approximately 19.3 million sq. ft. Commercial office space absorption across the top cities increased by

nearly 6% in 2008, with almost 30% of this space take-up being dominated by pre-commitments from last year. Fresh pre-commitments made in 2008 amounted to 12.8 million sq. ft., a 45% drop from 2007. A considerable difference between supply and absorption, however, led to rising vacancy rates across all micro-markets, causing significant rental corrections in the year. Though the total office supply projection for 2009 is approximately 88 million sq.ft., Cushman & Wakefield Research estimates only about 50 million sq. ft. to get delivered by end-2009. On the retail front, the year saw an approximately 17% increase in mall supply over 2007 at India's top metropolitan centres. But at 9.6 million sq. ft., it was a substantial shortfall, of more than 50%, from mall supply projections made earlier. Despite shortfall in mall supply, vacancy rates remained at a national average of 9%, suggesting that most malls were finding it difficult to manage operational costs. By mid-2008, the supply shortage compounded by a demand slowdown had pushed down rentals, which fell significantly across most micro-markets. The correction in 2009 will in all likelihood reach the non-metros, as the ripple effect of the economic downturn reach tier-II and III locations.

1 Mumbai, NCR, Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad

1

INDIA ECONOMIC OUTLOOK

Inflation reached an all time high of 13% in August 2008 which triggered the RBI to address the issue by raising the Cash Reserve Ratio (CRR), Repo and Reverse Repo Rates. As the cash crunch gained prominence, affecting growth rate and end user demand, fiscal stimuli were infused into the economy for curbing inflation by the end of the year (from 13% in mid1 2008 inflation fell to 5% by end-2008) . The real estate sector was greatly affected in 2H 2008 in light of testing economic times. As the tremors of the US recession trickled to affect the home markets, banks and financial institutions alike turned apprehensive of funding projects that were earlier nurtured by foreign institutional investors (FIIs). This resulted in the slowing down of several developments that were under progress as well as the deferment of supply for the year. The corporate sector too remained cautious and restricted themselves from the aggressive expansion plans they had nurtured thus far. Correcting rentals for commercial properties along with the attractive offers and easy leasing terms being offered by developers stood testimony to the slackness in demand for commercial space. The residential segment too saw investors and speculators exiting the market, making way for primary home buyers who anticipated further corrections and more realistic and affordable price points. The turn of events through the year, have put the tenant back in the power seat as he holds the negotiation key in the realty markets today. Infrastructure development has always remained the focus of the Indian government with planned projects such as the

2

Delhi Mumbai Industrial Corridor (DMIC), the Elevated Expressway in Bangalore connecting Hosur Road to Electronics City and several airport projects across the country that are underway. Public Private Partnerships (PPP) too have proved to be a successful model for various projects ranging from mass rapid transport systems (MRTS) and roads to airports and sea ports. Foreign Direct Investment (FDI) Since the opening up of the real estate sector in 2005, Private Equity (PE) funds in India have been very active. A large number of transactions have been recorded in the past three years at entity, portfolio and Special Purpose Vehicle (SPV) level. According to the Indian Department of Industrial Policy and Promotion (DIPP), there has been a substantial amount of FDI inflow into the housing and Real Estate (RE) sector, with approximately 78% of last year's inflows already having been accumulated during the first six months of FY 2008-09. Given the current global and domestic economic situation in which the Indian realty sector has been affected too, 2H 2008 hardly witnessed any FDI inflows. FDI inflow in Housing & Real Estate Sector 100,000

Investment (INR million)

The Indian economy experienced a setback in 2008 after registering a robust growth pattern over the last couple of years. India's GDP growth, which was recorded at 9% in 200708, saw a downward trend in 2008-09 and is estimated to reach around 7% in 2009-101. In spite of this decline, it still remains the second fastest growing economy in the world. The country's growth drivers in the past few years have remained the agriculture, services, manufacturing, trade as well as the construction sectors.

80,000

60,000

40,000

20,000

0 Apr 05 Mar 06

Apr 06 Mar 07

Apr 07 Mar 08

Apr 08 Sept 08

Source: www.dippnic.in

1 Interim Budget 2009 - 10 by Govt. of India (http://indiabudget.nic.in/)

INDIA ECONOMIC OUTLOOK Private Equity (PE) Deals Though economic factors were challenging in 2008, it remained a successful year for the global private equity industry as the first half of the year witnessed significant activity in this area too. According to Private Equity Intelligence (PREQIN), the year 2008 was globally the second

highest fund-raising year in the history of the industry. India too registered significant investment in the first half of 2008 while the last quarter has been affected the most with substantial projects being shelved. A few of the representative PE deals in 2008 across various asset classes are listed below:

Residential Investor/Fund

SPV Parent Company

Kind of development

Location of the project

Proposed/Invested

Investment

Citigroup Venture Capital International

Indu Projects

Residential project

Hyderabad

Invested

USD 50 million

ICICI Prudential PMSI Real Estate Portfolio

DS Kulkarni Developers

Residential project

Bangalore

Invested

INR 35 crore

HDFC AMC Infrastructure

Ansal Properties &

Residential project

NOIDA

Invested

INR 236 crore/ USD 55 million

Westport Capital, US based firm

Alliance Group

Residential project

Hyderabad

Invested

USD 100 million

Red Fort Capital

Indu Projects

Residential project

Hyderabad

Invested

INR 220 crore

Retail Investor/Fund

SPV Parent Company

Kind of development

Location of the project

Proposed/Invested

Investment

Yatra Capital

Palladium Constructions

Retail cum residential building complex

Bangalore

Invested

INR 111.62 crore

Triangle India Real Estate Fund

Provogue (India) Ltd

Retail

Aurangabad, Indore, Nagpur and Jaipur

Proposed

INR 457 crore

Commercial Investor/Fund

SPV Parent Company

Kind of development

Location of the project

Proposed/Invested

Investment

TAIB

Logix TechnoPark

IT Park

NOIDA

Invested

USD 69 million

Citi Property Investors BPTP

IT Park

Gurgaon

Invested

USD 160 million

Red Fort Capital

Godrej Properties

IT Park

Kolkata

Invested

NA

Yatra Capital

Riverbank Holdings Pvt. Ltd

IT SEZ

Kolkata

Invested

INR 115 crore

DE Shaw

HDIL

IT Park

Mumbai

Invested

USD 250 million

Source: Cushman & Wakefield Research

Policy Changes & Impact The year 2008-09 witnessed several announcements by the central government pertaining to policy changes as measures to curb inflation and to combat the effect of the global deleveraging on the nation's economy. Recommendations form various industries in these troubled times necessitated the government to take measures by formulating and altering fiscal policies and stimulus packages to steer clear off troubled waters. ? The Maharashtra government took a bold step by granting

allowed corporate entities engaged in the development of integrated townships, hotels, hospitals and non-banking financial companies exclusively financing infrastructural projects to avail ECBs under the approval route. ? Housing loans to individuals carrying a risk weightage of

50% was increased from INR 2 million to INR 3 million ? There was a decrease in stamp duty charges in states such

as Delhi, UP, Haryana etc.

100% extra Floor Space Index (FSI) in IT/ ITeS Parks to be used for financial services such as banks, insurance companies and securities within the IT Parks.

? The sunset clause on Software Technology Parks of India

? The policy on External Commercial Borrowing (ECB) was

debt without it being classified as NPL (Non Performing Loans)

also reviewed by the Reserve Bank of India (RBI) to provide the required momentum to the realty market. It

(STPI) benefits was extended for a year till 31st March 2010 ? The government also allowed the rescheduling of bank

3

REALTY SECTORAL OUTLOOK Commercial Office Space

Retail Space

The total supply for commercial office space across the top eight cities of India in 2008 was approximately 60 million sq.ft. While this was about 34% higher than supply of the previous year, it was also 24% less than the office supply projected for 2008 at the beginning of the year. Delhi NCR accounted for the highest supply (14.07 million sq.ft) in 2008, followed by Bangalore, Chennai and Mumbai. These four metropolitan centres together accounted for nearly 74% of the total office supply across the major cities. SEZ supply for the year was recorded at approximately 19.3 million sq. ft., with Bangalore accounting for the highest SEZ supply (5.71 million sq.ft), followed by Pune (4.1 million sq.ft) and Chennai (3.87 million sq.ft).

Though the year 2008 saw approximately 17% increase in mall supply over 2007 at India's top metropolitan centres at 9.6 million sq. ft., it was still a significant shortfall, in excess of 50% from earlier mall supply projections. The average mall vacancy rate for the top seven cities (see table below) stood at 9% in 4Q 2008, with Delhi NCR witnessing the highest mall vacancy rate, suggesting that most malls across India were finding it difficult to manage their operational costs. This was largely due to uneven distribution of mall space in the major cities, where mall supply has been concentrated within a single district targeting same or similar consumer profiles. From the retailers' point of view, the preference largely remained for premium high streets over malls, further aggravating the situation. In 2008 the highest level of vacancy was witnessed in NCR (24%) and Pune (15%), while the lowest vacancy level was witnessed in Chennai at approximately 1%.

Commercial office space absorption across major cities increased by nearly 6% in 2008 with almost 30% of the total dominated by pre-commitments from previous years. Delhi NCR saw nearly 5.86 million sq. ft. of pre-commitments for projects due in 2009, the highest among all major cities. Fresh pre-commitments for the year (to be absorbed by 2009) amounted to 12.8 million sq. ft., which was a 45% drop from that of 2007 and stands testimony to the cautious expansion plans from the corporate sector in this current overcast economic climate. With fresh pre-commitments having declined in 2008 over 2007, the impact will certainly be felt in the space absorption trends of 2009. Office Supply 16 Area (million sq. ft.)

14

City

NCR

Price Fluctuations in Major Markets Vacancy Locations Rate in 4Q 08

Rental % Change Over 1 Yr

24%

Main Street

CP/Karol Bagh/Basant Lok

-16%

Mall

West Delhi

-27%

Mall

Ganeshkhind Road

-14%

Main Street

MG Road

-13%

Lower Parel

-27%

Vashi

-17%

Theatre Road

-15%

Main Street

Park Street

-9%

Mall

South Kolkata

-7%

Main Street

Banjara Hills

-29%

Mall

Banjara Hills, Road No. 1

-20%

Sampige Road, Malleswaram

-28%

MG Road

-25%

Main Street

Anna Nagar, 2nd Avenue

-33%

Main Street

Cathedral Road, RK Salai

-33%

PUNE

MUMBAI

15%

10.20%

12

Mall

10 8

Mall

6

KOLKATA

4 2

5.60%

Main Street Pune

NCR

Mumbai

Kolkata

Hyderabad

Chennai

Bangalore

Ahmedabad

0

HYDERABAD 2007

4.70%

2008

Source: Cushman & Wakefield Research

Office Absorption

BANGALORE

3%

16

Main Street

Area (million sq. ft.)

14

Main Street

12 10

CHENNAI

8 6 4 2

2007

Source: Cushman & Wakefield Research

4

2008

Pune

NCR

Mumbai

Kolkata

Hyderabad

Chennai

Bangalore

Ahmedabad

0

1.30%

Source: Cushman & Wakefield Research

REALTY SECTORAL OUTLOOK Over the last six months quality real estate supply shortage, compounded by a demand slowdown in the segment, has pushed down rentals which are likely to witness a further drop in the coming quarters of 2009. The last quarter of 2008, especially, recorded a fall across main streets and malls in most micro-markets; with rentals likely to see further weakening in the short- to mid-term.

By the year-end one could see the correction rolling in on the cities that had seen the highest percentage increase in values during the bull-run and across the nation the most overheated micro-markets saw the deepest of corrections from their peak values. City

Price Fluctuations in Key Markets Values Locations

Mall Supply 2007-08

% Change Over 1 Yr

AHMEDABAD 5.00 4.50

High End

4.00 3.50

BANGALORE

Navarangpura

-13%

High End

Capital

Koramangala, Outer Ring Road

-10%

Mid End

Capital

Marathhalli, Whitefield, Airport Road

-17%

Mid End

Rental

Koramangala, Jakkasandra

-10%

Rental

Nungambakkam, Anna Nagar, Kilpauk

0%

Source: Cushman & Wakefield Research

High End

Capital

West & East Marredpally

-5%

Mid End

Rental

Himayathnagar

-13%

Residential Space

KOLKATA High End

Capital

Salt Lake

-5%

High End

Rental

Ballygunge, Queens Park, Gurusaday Road

-12%

Area (million sq.ft.)

Capital

3.00 2.50 2.00 1.50 1.00 0.50

2007

Pune

NCR

Mumbai

Kolkata

Hyderabad

Chennai

Bangalore

Ahmedabad

0.00

2008

The beginning of 2008 saw a strong real estate market with luxury residential projects being launched by both established and new developers. However, demand witnessed a serious set back across markets in the country with constrained consumer spending in light of the downturn. The initial signs of weakness were seen in 3Q 2008, with the consumers being courted with discounts and freebies such as free cars, parking space, fit-outs, pre-EMI payments, gold and even free vacations. The astute individual investors seeing the first signs of weakness started to exit the realty market and the gap widened further in the Indian housing sector. As exiting investors started to off-load projects, there was an apparent disparity in the rates being offered by developers and the ones available in the secondary market.

CHENNAI High End HYDERABAD

MUMBAI High End

Capital

Powai

-15%

Mid End

Capital

Worli, Prabhadevi, Lower Parel/Parel, Powai

-18%

High End

Rental

Malabar Hill, Breach Candy, Pedder Road, etc.

-19%

Mid End

Rental

Andheri (W), Malad, Goregaon

-24%

High End

Capital

Noida

-5%

Mid End

Capital

Gurgaon

-10%

Capital

Wanowrie

-20% -15%

NCR

PUNE High End Mid End

Capital

Wakad

High End

Rental

Wanowrie

-21%

Mid End

Rental

Aundh

-20%

Source: Cushman & Wakefield Research

5

MUMBAI MARKET OUTLOOK Vasai Creek

Bhiwandi

Borivli

Sanjay Gandhi National Park Thane

Malad

Mulund Goregaon Bhandup Jogeshwari

Thane Belapur Rd

Andheri

Santacruz (E) Bandra (W)

NAVI MUMBAI

Ghatkopar Vashi

Bandra (E)

Mahim Belapur

MUMBAI Worli Lower Parel Kemps Corner

Kolkhe Village

Fort/ Fountain

Shedung Village

Nariman Point Colaba

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL In 2008, Mumbai witnessed a total supply of approximately 9.48 million sq.ft. which was the highest single year development in the city in the last 5 years. However this was still well short of the total anticipated supply in the beginning of the year which was expected to be approximately 18 million sq.ft., most of which is now deferred to 2009. The deferment in supply can be attributed to the constrained availability of finances to real estate developers as well as subdued pre-

commitments in upcoming projects from IT/ITeS and BFSI (Banking Financial Services Insurance) sectors, which have been the principal drivers of office space demand in the city. Majority of supply in 2008 was concentrated in suburban locations of Bandra (2.34 million sq.ft.), Andheri (2.14 million sq.ft.) and Malad (1.80 million sq.ft.). CBD and Off CBD (Worli) locations did not witness any new supply due to limited opportunities for new developments in these locations. The ongoing mill land redevelopment at Lower Parel resulted

Office Supply - 2008

Sectorwise Absorption Trend - 2008 29%

43%

17%

28%

2% 2% 2% 3%

16% 3%

55% Commercial

Source: Cushman & Wakefield Research

6

IT SEZ

IT

IT/ITeS

BFSI

Others

Construction

Media

Aviation

Pharmaceuticals

Manufacturing

Source: Cushman & Wakefield Research

MUMBAI MARKET OUTLOOK

-15 200 -20 100

-25

8

5 6

4 3

4

Vacancy Rate (%)

Dec 2007

Dec 2008

Thane Belapur - IT

Growth Rate (%)

Source: Cushman & Wakefield Research

Average Rental Values Trend - Office Districts2 500

200

Nariman Point Bandra Kurla Powai - IT

Worli Andheri Kurla Vashi - IT

4Q - 08

3Q - 08

2Q - 08

4Q - 07

1Q - 08

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

0

1Q - 06

100

4Q - 05

IT/ITeS and BFSI sectors continued to remain the principal drivers accounting for 43 % and 29% of the total commercial space demand in the city respectively. Additionally Mumbai also witnessed increasing demand from sectors such as pharmaceuticals, aviation and infrastructure/real estate developers, albeit their contribution to overall demand was marginal.

300

3Q - 05

Source: Cushman & Wakefield Research

400

2Q - 05

Vacancy Rate (%)

500

4Q - 04

2008

1Q - 05

Absorption

2007

3Q - 04

2006

2Q - 04

Supply

2005

1Q - 04

2004

4Q - 03

2003

3Q - 03

0

0

2Q - 03

2

1

1Q - 03

2

Rental Values (INR/sq.ft./month)

Area (million sq.ft.)

10

6

Vashi - IT

-30

0

8 7

Growth Rate (%)

-10 300

Powai - IT

12

-5

400

Malad - IT

14

9

0

Nariman Point

10

500

Andheri Kurla

Supply, Absorption and Vacancy Trends

Average Rental Values - Office Districts2

Bandra Kurla

Of the total demand for 2008, absorption comprised of approximately 3.36 million sq.ft. while new pre-commitments were recorded at 1.96 million sq.ft. Additionally about 5.16 million sq.ft. of office space, which was pre-committed to in previous years, got absorbed in 2008. The first half of 2008 accounted for approximately 80% of the annual demand which moderated significantly thereafter due to the impact of the global economic slowdown on the Indian economy.

Lower Parel

Concerned with rescheduling of timelines of under construction projects by several developers, tenants showed increasing preference towards ready to move opportunities. As a result, the total demand in 2008 was driven by absorption rather than pre-commitments.

Worli

1

In 2008 the total demand for commercial office space in Mumbai was recorded at 5.32 million sq.ft. which was about 15% higher as compared to the demand in 2007.

With the slowdown in global economy, many corporates have eased or postponed their expansion plans resulting in subdued demand for office space in the city. As a result Mumbai witnessed an overall vacancy of about 12% in 2008 which is significantly higher as compared to 2007, when the vacancy levels were recorded at about 4-5%. Vacancy in CBD inched closer to 5% in 2008 as compared to 1-2% in 2007 on account of restrained demand and low renewals of expired lease agreements by corporates. Off CBD locations like Worli and Lower Parel witnessed a vacancy of approximately 7-9%. Vacancy levels in suburban markets of Andheri, Malad and Bandra soared to 14-15% due to large fresh supply coupled with low demand in these markets.

Rental Values (INR/sq.ft./month)

in a supply of about 458,000 sq.ft. in 2008. The space constrained city also witness it's first SEZ supply of 1.6 million sq.ft. in suburban location of Powai.

Lower Parel Malad - IT Thane Belapur Road - IT

Source: Cushman & Wakefield Research

Of the total demand, about 222,000 sq.ft. of office space was also absorbed by business centres in locations like Bandra, Lower Parel and Fort. Some of the major business centre players operating in the city included Avanta, Regus, Stylus and DBS.

Mumbai witnessed a drop in rental values across most micro markets in 2008. Highest rental drop of 25% was recorded in Andheri followed by Malad (-11%) and Bandra (-9%). Drop in rental values in these markets can be attributed to low existing demand coupled with increasing vacancies and large upcoming supply in these micro markets.

With STPI benefits slated to end in 2009-10, Mumbai witnessed significant demand for IT - SEZ space in 2008. The supply of 1.6 million sq.ft. of SEZ space in Powai was almost entirely absorbed due to lack of other SEZ options in the city. Significant demand was also recorded at Bandra (17%), Lower Parel (13%) and Malad (11%)

Subdued demand and increasing vacancy rates led to a drop in rental values at Nariman Point and Worli by 9% and 13% respectively. However rental values at Lower Parel,Vashi and Thane Belapur Road have largely remained stable due to limited supply in these markets. 1 Demand= Fresh Pre commitment + Fresh Absorption for the year. 2 Average rentals are for bareshell facilities

7

MUMBAI MARKET OUTLOOK Outlook

RESIDENTIAL

The office space market in 2009 is likely to be characterized by large anticipated supply (approximately 16 million sq.ft.), rising vacancy rates and reduced demand. Given a rather stringent macro economic environment, developers and landlords are likely to experience difficulty in maintaining rental values at current levels.

The global economic slowdown affecting the Indian economy on the whole had a direct bearing upon the residential market which saw a gradual slowdown in investor activities. Monetary measures to curb inflation not only led to increase in home loan interest rates but also curtailed availability of funds to real estate developers in second half of 2008. This, coupled with growing belief that capital values have already peaked and likely to witness correction, resulted in investors and end-users adopting a wait and watch, approach thereby bringing a slowdown in Mumbai residential sector.

Weakening Market

Strengthening Market

Market Recovery

Market Bottoming

Rental Trough

As compared to 2007, capital values witnessed mixed response across various micro markets in 2008. While demand for high end projects remained buoyant, consistent increase in home loan interest rates resulted in drop in affordability for end-users for mid end projects. Average Residential Capital Values - High End1

4Q 2009 (F2)

With STPI benefits stated to end in 2009, the limited IT/ITeS specific demand is expected to be steered towards the upcoming SEZ space along the Thane Belapur Road on account of lower rentals and prevailing tax benefits in SEZs space. With limited availability of SEZ space in the city, SEZ rentals in Thane Belapur Road are expected to remain stable. Peripheral locations like Thane and eastern suburbs (Vikhroli, Kanjurmarg, Bhandup and Mulund) are likely to emerge as new commercial hubs in the city due to low rentals and large upcoming supply in these markets.

Capital Values (INR/sq.ft.)

Source: Cushman & Wakefield Research

70,000

0

60,000

-2 -4

50,000

-6

40,000

-8

30,000

-10 -12

20,000

-14 10,000 0

-16

Low

High

-18

Annual Growth Rate (%)

Source: Cushman & Wakefield Research 1 Average high end values are for properties ranging from 3,000 to 6,000 sq.ft. 2 Forecast

8

Annual Growth Rate (%)

4Q 2008

Market Recession

South

Market Slowing

Almost a complete absence of investors, increasing interest rates on home loans and anticipation of correction in the existing high capital values led to restrained demand in second half of 2008. As a result capital values in the city which had witnessed accelerated growth over the last 4-5 years stabilised by 3Q 2008 and softened by the end of the year 2008.

North East

Rental Peak

Capital Values

Far North

Rental Cycle

Recent policy reforms such as repealing of the Urban Land Ceiling Act, increase in Floor Space Index (FSI) for townships and allowing upto 100% FDI for township development enticed township developments in peripheral locations of the city. As a result Mumbai witnessed launch of two township projects in peripheral locations of Panvel and Thane in 2008.

North

Micro markets of Thane and Thane Belapur Road are expected to witness a supply of about 6 million sq.ft. in 2009, nearly 55% of which is likely to be IT/ITeS specific. In spite of the state government's recent resolution to allow financial service providers to occupy up to 80% of space in an IT Park, the large IT/ITeS specific supply coupled with reduced demand from IT/ITeS sector is likely to create a supply to demand mismatch keeping rental values under pressure in these markets.

Central

About 50% of anticipated supply in 2009 is expected to be concentrated in suburban markets of Andheri, Malad and Bandra which includes IT/ITeS specific supply of approximately 2 million sq.ft. This large upcoming supply coupled with existing high vacancies is expected to keep rental values under pressure.

Developers also restricted the launch of new projects in 2008 due to low pre commitments by investors and restrained demand from end users for under construction projects. With limited opportunities for development in south and south central Mumbai, most of the new supply was concentrated in suburban locations of far north Mumbai (Andheri, Goregaon and Malad). However central Mumbai (Worli and Lower Parel) and North Mumbai (Bandra, Santacruz and Juhu) witnessed sporadic supply of premium projects.

South Central

In the absence of any major upcoming supply over the next 12 months, drop in rental values for CBD and Off CBD locations is expected to be marginal. However planned large scale redevelopment of mill land for commercial use at Lower Parel coupled with reducing demand is likely to result in significant correction in rental values.

MUMBAI MARKET OUTLOOK

-6

30,000

-8

25,000

-10

20,000

-12

15,000

-14

10,000

-16

5,000

-18

50,000

0

-20

0

Low

High

2

0 -5

350,000 300,000

-10

250,000 200,000

-15

150,000 100,000

Low

Annual Growth Rate (%)

High

North East

Far North

North

Central

South Central

-20

South

North East

Rental Values (INR/month)

-4

35,000

Annual Growth Rate (%)

40,000

Far North

400,000

North

450,000

-2

Central

0

45,000

South Central

50,000

South

Capital Values (INR/sq.ft.)

Average Residential Rental Values - Mid End

-25

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Source: Cushman & Wakefield Research

On account of limited fresh supply and buoyant demand, south and south central Mumbai remained largely insulated from slowdown in residential sector and witnessed marginal softening in capital values for both high and mid end segment. However price sensitive markets of far north (Andheri, Goregaon and Malad) and north east (Powai) witnessed significant softening in capital values for both mid end and high projects (-11% to -17%) due to large supply and restrained demand from end-users due to reduced affordability and anticipation of further price correction. Lower demand for under construction projects resulted in steep correction in capital values for both high end (-12%) and mid end projects (-18%) in central Mumbai.

south Mumbai due to low rentals and accessibility to commercial hubs like Bandra Kurla Complex, Andheri and Malad, south and south central Mumbai witnessed significant correction in rental values of high end apartments.

Rental Values Rental values which had remained stable in first half of 2008, witnessed significant correction across all micro markets due to overall restrained demand and realignment of rental expectation to market sentiments by property owners who had earlier held on to their rental expectations in anticipation of growing demand from end users. Significant softening of rental values were recorded for both high and mid range properties. With multinationals showing increasing preference for north and far north Mumbai over 1

Average Residential Rental Values - High End 1,200,000

0%

1,000,000

-4% -6%

800,000

-8% 600,000

-10% -12%

400,000

-14% -16%

200,000

Low

High

North East

Far North

North

Central

South Central

South

-18% 0

-20%

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Annual Growth Rate (%)

Rental Value (INR/month)

-2%

Annual Growth Rate (%)

2

Average Residential Capital Values - Mid End

However mid range properties in south and south central Mumbai which witnessed marginal correction due to limited availabilities. The highest rental correction was recorded in mid range properties across price sensitive locations like far north and north east Mumbai which witnessed 21-24% drop in rentals due to drop in affordability. Outlook Increasing preference is likely to be given to smaller units and lower cost housing projects for middle income groups, especially in price sensitive markets. As a result developers in far northern locations (Andheri, Goregaon and Malad) are likely to focus on small sized apartments (1-2 BHK3 apartments) catering to middle income group. With Supreme Court allowing redevelopment of over 19,000 buildings across Mumbai, south and south central Mumbai could witness the launch of a few new mid and high range projects in second half of 2009. This could lead to softening of capital values in these markets which have so far remained insulated from correction due to limited supply and still buoyant demand. In 2009, as most developers are likely to focus on reducing existing inventory, capital values for both high and mid end are likely to remain under pressure over the next 10 to 12 months across most micro markets.

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

1 Average high end values are for properties ranging from 3,000 to 6,000 sq.ft. 2 Average mid end values are for properties ranging from 1,400 to 2,200 sq.ft. 3 BHK - Bedroom, Hall & Kitchen

9

MUMBAI MARKET OUTLOOK RETAIL

Average Mall Rental Trend1

With brands increasingly focusing on cost containment, significant correction in rental values was witnessed across most micro markets. Additionally brands exhibited preference to established markets over emerging peripheral locations in order to ensure business viability.

800

Rental Values (INR/sq.ft./month)

With several brands undergoing an expansion spree, Mumbai retail market witnessed accelerated retail activity in the beginning of 2008. However by end of the year, the slump in consumer demand due to increasing inflation and slowdown in economy resulted in many brands postponing or cutting short their expansion plans.

700 600 500 400 300 200 100 0 1Q-07

2Q-07

Lower Parel Mulund Ghatkopar

3Q-07

4Q-07

Malad Goregaon

1Q-08

2Q-08

3Q-08

4Q-08

Link Road, Andheri (W) Vashi

Source: Cushman & Wakefield Research

Mall Development In 2008, Mumbai witnessed development of seven malls with a total built up area of about 2.02 million sq.ft., taking the total mall stock in the city to about 7.66 million sq.ft.. However this was well short of anticipated supply which was estimated at 4.37 million sq.ft. in the beginning of 2008. About 2.17 million sq.ft. of mall space which was expected in 2008 has been deferred to 2009 largely due to rescheduling of construction plans. Majority of deferred supply is expected to be available in second half of 2009. Additionally, sizeable retail development of 150,000 sq.ft. to 170,000 sq.ft. which was planned in 2008 has now been converted into commercial office space. Mall Supply Trend 5 4.5

Area (million sq.ft.)

4 3.5 3 2.5 2 1.5 1 0.5 0 2006

2007

2008

2009 (F)

2010 (F)

Year

Source: Cushman & Wakefield Research

Accelerated residential developments in peripheral locations resulted in increasing demand for retail space in certain markets. As a result majority of mall supply in 2008 was concentrated in peripheral locations like Vashi (770,000 sq.ft.), Kharghar (250,000 sq.ft.) and Kalyan (104,000 sq.ft.). While suburban location of Goregaon witnessed opening of Oberoi Mall (400,000 sq.ft.), Grand Galleria (150,000 sq.ft.) became operational at Highstreet Phoenix in Lower Parel. Mall developments were also recorded in suburban locations of Andheri. Mall rental values which reached a record high in first half of 2008 witnessed a decisive drop by the end of 2008 across most micro markets, barring a few. 1 Average rentals are for ground floor premises on carpet area.

10

Realignment of expansion plans and wait and watch approach from retailers has led to reduced leasing activity, thereby postponing major upcoming supply in Lower Parel. As a result in spite of marginal vacancy (3-5%), Lower Parel witnessed a sharp year-on-year decline (-27%) in rental values. Rental values at Vashi witnessed a correction of approximately 17% in 2008 due to addition of significant new supply and high vacancy levels of approximately 10% in existing mall stock. Lal Bahadur Shastri Marg (LBS Marg) which runs through central Mumbai (Ghatkopar-Vikhroli-Bhandup-Mulund-Thane) is expected to witness large supply of approximately 2 million sq. ft, over the next 12-18 months. The upcoming supply is likely to create additional retail hubs along the eastern suburbs which otherwise was polarized in Mulund. Anticipated drop in footfalls and upcoming opportunities in adjoining areas has affected market attractiveness of Mulund and has led to a drop in demand for retail space in Mulund resulting in softening of rental values by 14%.

Goregaon, which recorded accelerated growth in rental values in the beginning of 2008 due to favorable demand supply scenario, experienced a slowdown in demand due to concerns about non-viability of business at such high rental values resulting in a steep correction of about 17% in the second half of 2008. However consistent business performance by most brands resulted in Malad witnessing a year-on-year appreciation of 17% in 2008. Vacancy levels in Malad and Goregaon were recorded at 3-5% in 2008. Main Street Development Main street rental values which had recorded a steep increase in the beginning of 2008, witnessed a correction in second half of 2008 as a direct result of reduced leasing activities and cautious expansion plan by many retailers. During 4Q 2007 to 1Q 2008, main streets of south Mumbai (Colaba Causeway and Fort/ Fountain) witnessed significant appreciation in rental values as a result of accelerated expansion plans by various brands. However most brands curtailed their expansion plans in second half of 2008 in response to the economic slowdown resulting in subdued leasing activity in these main streets. The restrained demand has strengthened tenant's position and resulted in significant correction of rental values in these markets.

MUMBAI MARKET OUTLOOK Linking Road witnessed more leasing transaction as compared to other high streets. Retail chains like Croma, Manzoni, Woodland, etc opened their stores here. Rental values which reached record high in first half of 2008 plunged thereafter by approximately 40% due to overriding market sentiments resulting in realignment of rental expectations to market sentiments and business viability. Average Main Street Rental Trend Rental Values (INR/sq.ft./month)

1600 1400 1200 1000

Outlook Increasing residential development and availability of land parcels to develop malls in the peripheral locations will create new shopping and entertainment centres in the city. In 2009, Mumbai is expected to witness a total mall supply of approximately 5.44 million sq.ft. including 2.17 million sq.ft. of deferred supply from 2008 and 3.27 million sq.ft. of fresh supply for 2009. Significant part of the upcoming supply will be concentrated in peripheral locations. The upcoming supply will predominately comprise of mid and small formats malls; however, Mumbai is likely to witness few large format malls in peripheral locations in the next 2 years.

800

Source: Cushman & Wakefield Research

The current economic slump has adversely impacted consumer demand forcing many retailers to re-evaluate their expansion plans. As the slowdown in the economy in expected to continue in near future, mall rental values could witness a further correction in first half of 2009 on account of high vacancies, large upcoming supply and low demand. Restrained leasing activities is likely to keep the main street rental values in 2009 under pressure.

Rental values at Lokhandwala-Andheri and Kemps Corner/ Breach Candy largely remained stable on account of low vacancy levels and buoyant demand in these markets.

Note : The rental values indicated are base rents and do not include interest cost of l security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

600 400 200 0 1Q-07

2Q-07

3Q-07

4Q-07

Linking Road Colaba Causeway Fort/Fountain

1Q-08

2Q-08

3Q-08

4Q-08

Kemps Corner/Breach Candy Lokhandwala Andheri

11

NCR MARKET OUTLOOK Bhagat Singh Park Libaspur

Roop Nagar

St. Nagar Jahangirpuri

Rohini Inder Enclave Prem Nagar NH 10

Mangolpuri

Prem Nagar II

Shakurpur Colony NH 10

Paschim Vihar Rajouri Garden

Najafgarh

Uttam Nagar

Sector - 16B

NH 8 Shanti Niketan Palam

Mahiapalpur

Rajokri

Sahibabad Industrial Area

Rajgarh Colony

Dharam Pura

Karol Bagh

GHAZIABAD

Dilshad Garden

Nirman Vihar

Old Rajender Nagar

Dwarka Nangal Dewat

Amar Colony

Shahdara

Daya Basti

NEW DELHI Connaught Place Golf Khan Link Market

Sagarpur

Sector 23

Karawal Nagar

Ashok Vihar

Hari Nagar

Janak Puri

Majlis Park

Kirti Nagar

Vishnu Garden

Vikaspuri

Mohan Garden

Raj Nagar

Shalimar Bagh Pitampura

Yamuna River

Mayur Vihar Mayur Vihar Phase I

NOIDA

NH 2 South Lajpat Anand Ext. Nagar Lok Niti Safdarganj Bagh Nehru Development GK-1 Place Area GK-11

Friends Colony

R.K. Puram

Aghapur Jasola Vihar Okhla

Hazipur Village

Saket

Vasant Kunj

Khanpur

Udyog Vihar

Vishwakarma Colony

Sangam Vihar

Pulpehladpur Sector 5

GURGAON

DLF Industrial Area

Sushant Lok

Sector 9

DLF Phase 5

Sector 10B Sector 34

Green Fields Colony

Sector 39 Dera

Spring Field Colony

Sector 35 NH 8

Sector 19 Sector 16

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL

Majority of the office development catered to the IT/ITeS sector as 66% of the new stock added in the region during the year was IT SEZ and other IT developments followed by corporate office space.

The commercial office supply in NCR was approximately 14.1 million sq.ft. during the year 2008 as compared to the planned supply of over 18 million sq.ft. in the beginning of the year. Majority of the supply was concentrated in the suburban locations of Gurgaon (53%) and Noida (39%) due to availability of land parcels in the region. The uncertainty over the extension of the STPI benefits was one of the factors encouraging developers to undertake several SEZ projects admeasuring 1.3 million sq.ft. in 2008.

The global economic crisis leading to credit crunch affected the timeliness of several projects, also the delay in construction schedule has caused deferment of certain developments. As a result few projects admeasuring 6.2 million sq.ft. stand deferred to 2009, majority of which caters to the IT/ITeS sector.

Office Supply - 2008

Sectorwise Absorption Trend - 2008

9%

3%

3%

6%

11% 10%

34%

57% 67%

IT Developments

Source: Cushman & Wakefield Research

12

Non-IT

IT SEZ

Other (construction, advertising, aviation etc.)

IT & ITeS

Automobile

Research & Consulting

Telecom

BFSI

Source: Cushman & Wakefield Research

NCR MARKET OUTLOOK Supply, Absorption and Vacancy Trends 25

16 14

20

10

15

8 10

6 4

Vacancy Rate (%)

Average Rental Values Trend - Office Districts3

5 400

The increase in supply and weakening business sentiment led to increase in vacancy levels in the region, which is currently in the range of 8-10%. The vacancy level in Gurgaon and Noida stood in the range of 7-9% and 16-17% respectively at the end of the year. However, vacancy rate in CBD and Off CBD locations remained stable in range of 3-4% due to quick take up of space.

-15

0

-20

Dec 2007

Dec 2008

Growth Rate (%)

-10

50 Noida 1 (IT/SEZ)

-5

100

Noida 1 (Commercial)

0

150

Gurgaon (IT/ SEZ)

5

200

Gurgaon (Commercial)

250

South Micro Market

10

SCBD

15

300

Off CBD

20

350

CBD

Rental Values (INR/sq.ft./month)

Average Rental Values - Office Districts3 400

150 100

CBD South Micro 1 Noida - Commercial

4Q - 08

3Q - 08

2Q - 08

4Q - 07

1Q - 08

3Q - 07

2Q - 07

SCBD Gurgaon (IT/SEZ)

Source: Cushman & Wakefield Research

Outlook The demand is likely to decline in wake of slowdown in economic growth and deferred expansion plans of the corporate. Office supply anticipated in 2009 is approximately 18 million sq.ft. which is likely to further correct rentals. As majority (72%) of the upcoming supply caters to the IT/ITeS segment with SEZ development of approximately 7 million sq.ft. in the suburban locations, this segment is likely to foresee further correction. The pre-commitments are likely to reduce in the near future as the corporate sector adopts cautious expansion strategy leading to reduced demand. The corporate occupiers will now look to re-negotiate leasing terms and rentals with the developers or consider re-location to more cost effective locations, now readily available due to increase in availability in certain suburban micro markets. Rental Cycle Rental Peak

Growth Rate (%)

4Q 2008

4Q 2009(F)

Source: Cushman & Wakefield Research

The year witnessed the rental values (except IT/SEZ segment) exhibiting an upward trend in the first half of the year before declining in the last two quarters owing to the exogenous factors adversely affecting the economy and trickling down to the real estate sector. The rental values of the IT/SEZ segment, on the other hand, depicted correction from the second quarter due to weakening demand and fear of oversupply in some pockets. CBD and Off CBD locations despite being the traditional office destination in NCR noted correction in the range of 14-16% in the last quarter of the year due to the weakening business sentiment and non-sustainability of high

4Q - 06

Off CBD Gurgaon - Commercial 1 Noida (IT/SEZ)

1Q - 07

3Q - 06

2Q - 06

0

1Q - 06

50 4Q - 05

The demand for commercial office space in NCR was recorded at 14.4 million sq.ft. during 2008 which includes 5.8 million sq.ft of space pre-committed during the year on supply likely to enter in 2009. The demand was primarily driven by IT/ITeS sector which accounted for nearly 67% of the total absorption. In addition, IT/ITeS developments witnessed majority (97%) of the pre-commitments likely to be absorbed in 2009.

200

3Q - 05

Source: Cushman & Wakefield Research

300 250

2Q - 05

Vacancy Rate (%)

350

4Q - 04

2008

1Q - 05

Absorption

2007

3Q - 04

Supply

2006

2Q - 04

2005

1Q - 04

2004

4Q - 03

2003

3Q - 03

2002

2Q - 03

0

0

Rental Values (INR/Sq.ft./month)

2

1Q - 03

Area (million sq.ft.)

12

price points achieved during previous years. Other locations such as SCBD2, Gurgaon and Noida started to witness correction since the third quarter of the year. These locations recorded a correction of 11% in the last quarter primarily due to economic conditions in addition to new stock added which exerted downward pressure on the rental values.

Market Slowing

Market Recession Weakening Market

Strengthening Market

Market Recovery

Market Bottoming

Rental Trough

Source: Cushman & Wakefield Research

1 Warm shell rentals that include power back-up and high side air-conditioning 2 SCBD - Secondary Central Business District 3 Average rentals are for bareshell facilities

13

NCR MARKET OUTLOOK

15

20,000

10 5

15,000 0 10,000 -5 5,000

Annual Growth Rate (%)

25,000

Low

High

-15

Noida

0

Gurgaon

-10

South Central

The demand in residential segment in NCR witnessed a gradual shift from investor driven market to that driven by end users. However, high property prices inhibited certain individuals to make purchase decisions despite several interest rate cuts by the Central Bank in an attempt to revive demand. Certain developers also made a conscious effort to renew demand by offering incentives such as free parking, deferment of payment of EMI till possession and customising payment scheme for projects nearing completion.

Average Residential Capital Values - Mid End2

South East

RESIDENTIAL

and under construction projects with the latter depicting relatively higher correction.

Capital Values (INR/sq.ft.)

It is anticipated that the flexible leasing terms will continue in the long term highlighting the shift from the landlords market to the tenants market with the bargaining strength with the latter.

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

0

20,000

-2

Low

High

Noida

Gurgaon

Central

-6

South Central

-4

0 South East

10,000

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

end segment of Noida and the mid end segment of Gurgaon and Noida declined in the range of 1-10% over the year falling below the level prevailing in the beginning of the year. The correction noted varied across ready to move in properties 1 Average high end values are for properties ranging from 2,000 to 4,000 sq.ft. 2 Average mid end values are for properties ranging from 1,600 to 2,000 sq.ft.

14

15

300,000 10

250,000 200,000

5

150,000

0

100,000

Annual Growth Rate (%)

2

20

350,000

-5

50,000

-10

0

Low

High

Noida

30,000

400,000

Gurgaon

4

Average Residential Rental Values - High End1

Central

6 40,000

South West

Capital Values (INR/sq.ft.)

8

50,000

Annual Growth Rate (%)

10

60,000

Similar trend was noted with rental values appreciating in the first half of the year and witnessing marginal correction in the

South Central

1

Average Residential Capital Values - High End

Rental Values

South East

The capital values witnessed appreciation until the first half of the year in both the high end and the mid end segment. However, correction was noted in the last quarter of the year in the range of 7-18% over the previous quarter in all micro markets. This decline in values across majority of the micro markets was not steep and it still held up to the level prevailing in the beginning of the year. However, values in high

South West

Capital Values

The Delhi locations recorded a decline in values in the range of 10-12% in the last quarter over the previous quarter. However, the values in most of these locations increased in the range of 4-12% over the year. These micromarkets witnessed appreciation in values up till the first half of the year as the demand was driven by consulates and high commissions. However, thereafter the decline in the last quarter was not steep to pull values from the level prevailing in the beginning of the year, although the demand weakened. The high end segment of Gurgaon noted highest appreciation of capital value over the year owing to demand from senior management/top executives.

Rental Values (INR/month)

The credit crisis made the developers conscious of the offer price/launch price of new project launches reflecting a relatively higher correction than in prices of ready to move in properties. The residential development for the mid income group gained prominence as this segment was unaddressed and contained huge demand. A few projects such as Wish Town Klassic, Park Serene and DLF Express Greens to name a few catering to mid income group were launched in the suburban locations of Gurgaon and Noida, despite the slowdown.

Annual Growth Rate (%)

Source: Cushman & Wakefield Research Key to the Residential Locations: High End Segment South West: Shanti Niketan, Westend, Anand Niketan,Vasant Vihar South East: Friends Colony, Maharani Bagh, Greater Kailash - I & II South Central: Defence Colony, Anand Lok, Niti Bagh, Gulmohar Park, Hauz Khas Enclave, Panchsheel Park etc. Central: Jorbagh, Golf Links, Amrita Shergil Marg, Aurangzeb Road, Prithviraj Road, Sikandara Road, Tilak Marg, Mann Singh Road, Tees January Marg, Chanakyapuri etc. Mid End Segment South East: New Friends Colony, Kalindi Colony, Ishwar Nagar, Sukhdev Vihar, Kailash Colony, Pamposh Enclave South Central: Green Park, Saket, Asiad Village, Geetanjali Enclave, Safdarjung Enclave, Panchsheel Enclave etc.

NCR MARKET OUTLOOK Mall Supply Trend 7.00 6.00

Area (million sq.ft.)

range of 2-9% in the last quarter vis-à-vis the previous quarter. This is owing to companies and individuals adopting a cautious approach in leasing a property due to availability of diverse options. The values across Delhi locations appreciated in the range of 4-11% over the year except high end segment of south east location which witnessed decline of 6% over the year. This was due to reduced activity from boutique builders to refurbish properties and limited demand from expatriates in current economic scenario.

5.00 4.00 3.00 2.00

1

Average Residential Rental Values - Mid End

1.00

180,000

25

0.00 2006

140,000 120,000

15

100,000 80,000

10

60,000 40,000

5

Annual Growth Rate (%)

20

High

Noida

Low

Gurgaon

0

South Central

20,000 South East

Rental Values (INR/month)

160,000

0

Annual Growth Rage (%)

2007

The capital values are likely to continue to decline in the medium term due to subdued demand from the end users. The launch of new projects and slowdown in demand is likely to compel the developer to soften prices in the suburban locations and increase marketing efforts. Rental values are expected to decline owing to the weakening economic sentiment. Certain companies and individuals have started to prefer suburban locations over Delhi locations as it provides better quality of living at relatively lower price/value which may lead to correction in values in Delhi in the medium term. RETAIL

2010 (F)

The mall rentals were stagnant for the first half of the year as the supply that entered the market could not generate demand inspite of being available for leasing much before it became operational. However, the rental values started to correct in the third quarter due to cautious expansion plans of retailers under prevailing economic conditions and substantial mall space (2.0 million sq.ft) getting operational. Average Mall Rental Trend 700

Rental Values (INR/Sq.ft./month)

Outlook

2009 (F)

Source: Cushman & Wakefield Research

Source: Cushman & Wakefield Research

Despite correction in values, the mid-end segment in the suburban locations of Gurgaon and Noida witnessed highest appreciation in the range of 21-24% over the year.

2008 Year

600 500 400

300 200 100 0 Q1-07

Q2-07

Q3-07

Q4-07

Q1-08

NOIDA West Delhi

Q2-08

Q3-08

Q4-08

South Delhi Gurgaon

Source: Cushman & Wakefield Research

The weak economic conditions led to low or negative revenue growth of the retailers. This made it difficult for the retailers to hold onto the current rental payout forcing them to reevaluate their expansion plans by either resizing or opting out. Certain retailers and developers are also considering revenue sharing with minimum guarantee to moderate the effect of the

Mall Development

Additionally, malls comprising 1.4 million sq.ft. completed construction but have not commenced operations either due to pending approvals or lack of tenants. 1 Average mid end values are for properties ranging from 1,600 to 2,000 sq.ft.

Average Main Street Rental Trend 1600 Rental Values (INR/sq.ft./month)

NCR witnessed mall supply of approximately 4.6 million sq.ft during 2008, depicting an increase of 21% over the last year. The supply was evenly spread across locations of South Delhi, Greater Noida and Faridabad, each of which witnessed new mall development of approximately 1.0 million sq.ft. representing 64% of the total mall supply. Locations of West Delhi, Gurgaon and Ghaziabad accounted for the remaining supply of 1.6 million sq.ft. during the year.

1400 1200 1000 800 600 400 200 0 1Q-07

Khan Market Karol Bagh

2Q-07

3Q-07

4Q-07

1Q-08

Connaught Place (Inner Circle) Basant Lok

2Q-08

3Q-08

4Q-08

South Extension I & II Greater Kailash I, M Block

Source: Cushman & Wakefield Research

15

NCR MARKET OUTLOOK slowdown. Several developers are also contemplating to convert existing or planned retail developments to commercial office space in order to cope up with the tough economic conditions.

lifestyle retailers who were keen to establish their presence. However, leasing activity remained subdued in the second half due to worsening economic conditions and cautious expansion strategy of followed by various brands.

The last quarter of the year noted dip in rental values in the range of 12-27% over the previous year. West Delhi locations saw maximum correction of 27% over the last year due to high vacancy in the existing development of north-west Delhi in addition to the anticipated supply in 2009. Whereas, rental values in South Delhi micromarket witnessed relatively lower correction of 12% over the year due the nature of developments and lower vacancy levels.

The rental values were holding up to previous years level up till the third quarter, thereafter the values began witnessing correction across all micromarkets in NCR, with maximum decline of 16% noted in prominent main streets of Connaught Place (Inner Circle), Karol Bagh and Basant Lok compared to the previous year. These retail markets had achieved high price points during last couple of years which seemed unsustainable in prevailing economic scenario forcing a correction.

Mall vacancy levels across NCR increased marginally (1%) in the last quarter of the year vis-à-vis the previous quarter. At the end of the year, vacancy level stood at 24% owing to increase in available space in Delhi and Gurgaon. This has resulted in the deferment of several mall developments amounting to 2.4 million sq.ft. to 2009.

Outlook

Main Street Development The leasing activity across various Main Streets was active up till the second quarter of the year and increase in rental values was recorded. Many existing shopkeepers capitalised on the upturn of the sector and provided opportunity to the

Low conversions and reduced demand is likely to put pressure on the rental values across both malls and main street locations in the medium term. The anticipated mall supply of 6.3 million sq.ft. in 2009, with majority of it in South Delhi and Gurgaon will further lead to correction in these micromarkets. In the immediate future, the retailers are expected to consolidate their operations focussing mainly on more viable outlets. Certain landlords/developers have depicted flexible approach to lease agreement in order to hold on the demand. This is likely to continue in the long run amidst weakening business sentiment.

Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

16

BANGALORE MARKET OUTLOOK

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL

Electronics City. A significant supply of nearly 5.28 million sq.ft. was witnessed on the ORR stretch from Hebbal to Sarjapur.

Bangalore's commercial market witnessed a fair quantum of supply in 2008 totalling 11.18 million sq.ft., with an annual growth rate of nearly 16%. There was an even distribution of SEZ and non-SEZ space, with the former accounting for 51% of the total supply in 2008. Peripheral locations were the highest contributors to commercial office space supply with approximately 10 million sq.ft. (89%) of the total annual supply. Whitefield and Outer Ring Road (ORR) were the primary contributors with minimal contribution from Hosur Road and

Given the liquidity crunch in the markets and the reduced demand for office space following the global economic slowdown, 2H 2008 witnessed the postponement of a lot of projects to 1H 2009. Nearly 20% of the total supply projected for 2008 in the beginning of the year is expected to get delivered in 2009. IT/ ITeS accounts for nearly 90% of commercial office space in Bangalore and currently many IT

Office Supply - 2008

Sectorwise Absorption Trend - 2008 5%

49%

1%1%

51%

88%

IT SEZ

Source: Cushman & Wakefield Research

Non SEZ

Others

IT & ITeS

Telecommunications

BFSI

Automotive

Source: Cushman & Wakefield Research

17

BANGALORE MARKET OUTLOOK

18

18

16

16

14

14

12

12

10

10

8

8

6

6

4

4

1

2

0

0 2001

2002

2003

Supply

2004

2005

Absorption

2006

2007

Vacancy Rate (%)

Area (million sq.ft.)

Supply, Absorption and Vacancy Trends

2008

Source: Cushman & Wakefield Research

30 25 20

50 15

50

40 10

30 20

5

Dec 2007

Dec 2008

Peripheral ORR

Peripheral / Whitefield / Electronics City

Suburban

Peripheral ITPL

10 0

70 60 50 40 30

4Q - 08

3Q - 08

2Q - 08

4Q - 07

1Q - 08

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

1Q - 06

4Q - 05

3Q - 05

2Q - 05

4Q - 04

1Q - 05

3Q - 04

2Q - 04

1Q - 04

4Q - 03

10

3Q - 03

20

CBD Suburban - Koramangala / Indiranagar Peripheral - Whitefield, Electronic City, Hebbal

Off CBD Peripheral - ITPL Peripheral - ORR (Sarjapur - Hebbal)

Source: Cushman & Wakefield Research

The vacancy rate in Bangalore increased significantly in the fourth quarter, reaching 16% as against a range of 7-10% in earlier quarters. This was mainly because of the high vacant stock in the Whitefield and ORR micro-markets. Peripheral micro-markets (especially Whitefield) witnessed vacancy rates in excess of 30% largely because of a continuing over-supply situation (predominantly the first time developers) which got aggravated due to the addition of fresh supply. CBD/ Off CBD locations saw an increase of 8% (mainly due to many second generation buildings coming into stock).

Outlook Growth Rate (%)

60

CBD / Off CBD

Rental Values (INR/sq.ft./month)

Average Rental Values - Office Districts

70

80

On the rental front CBD/off CBD and suburban areas saw a significant increase by approximately 18% and 14%, respectively, over last year because of limited Grade A supply in these micro-markets. Peripheral micro-markets of ORR and Electronics City however, hardly witnessed any significant increase because of fresh supply, and second generation building becoming available for leasing.

VacancyRate (%)

90 80

90

2Q - 03

The demand for commercial office space in Bangalore stood at 6.36 million sq.ft. in 2008, which is a substantial decrease from last year. Principal reason for this downturn is a significant reduction in the total amount of pre-commitments registered this year in comparison to 2007 and 2006. Nearly 1.62 million sq.ft. of space pre-committed to in 2008 is set to get delivered in 2009, while another 845,750 sq.ft. will reach completion by 2010. Another demand trend saw some firms backing out of initial commitments, while others reduced the built-up-area committed to in earlier quarters/ years.

Average Rental Values Trend - Office Districts1

1Q - 03

Massive multi-product SEZs requiring huge investments have been the worst affected in this economic meltdown; but even Bangalore, which mostly accounts for small sector-specific (notified) SEZs, have been affected to some extent. Some IT SEZs planned along the ORR and Whitefield micro-markets have already seen slowdown in their phased developments, with much of the project construction having been deferred to 2009-10. The city's real estate sector in 2H 2008 mirrored global economic conditions and unlike trends noticed over the past few years, fresh pre-commitments saw a drop.

With total office space absorption of nearly 10.36 million sq.ft. in 2008, Bangalore witnessed the highest space take up in the country. This can largely be attributed to the precommitments of previous years that were delivered in 2008, accounting for nearly 62% of the total absorption for the year. Similar to the supply trend for the year, ORR, a key peripheral micro-market, witnessed about 5 million sq.ft. of absorption, followed by Whitefield (2.65 million sq.ft.). Despite the IT slowdown, major office space demand drivers for the city continued to be the IT/ ITeS sector, followed distantly by other sectors like Telecom, Automotive and Biotech etc.

Rental Values (INR/sq.ft./month)

firms have started to base their leasing activities on shortterm outlook rather than on long term expansion plans. While demand for soft options is disappearing, need-based leasing of IT space is gradually gaining ground. In this climate of reduced visibility in space demand, SEZs in the city have also been affected.

0

Growth Rate (%)

There is approximately 14 million sq.ft. of commercial office supply expected in 2009 with a likelihood of 6 million sq.ft. that is currently expected by 4Q 2009 to spill over to 2010. The wait-and-watch approach adopted by corporates is expected to result in a further decrease in office space demand and is likely to impact the project delivery schedule of various developers. Peripheral locations will continue to be the highest space contributor to the city's total supply while SEZs are likely account for the majority of supply.

Source: Cushman & Wakefield Research 1 Above rentals are for warm shell facilities (shell and core facility, power, high side air conditioning and 100% power backup

18

Rentals are likely to weaken across the CBD/ Off CBD micro markets and are expected to stay stable in the peripheral

BANGALORE MARKET OUTLOOK of 2008. The only exception to this case was the mid-range micro-market of Whitefield and Marathahalli, which continued to witness minor rental corrections since the beginning of the year. This was essentially due to the oversupply of large residential developments from prominent as well as lesserknow developers in these areas. 1

Average Residential Rental Values - High End 600,000

Market Recession

Market Recovery

-3 -4

0

Weakening Market

Strengthening Market

Annual Growth Rate (%)

Market Slowing

-2 200,000

Market Bottoming

Low

High

Hebbal Yelahanka Jakkur

4Q 2009 (F)

-1

Whitefield (Villas)

4Q 2008

Frazer Town Benson Town Richards Town Dollars Colony

Rental Peak

0 400,000

Koramangala, Outer Ring Rd

Rental Cycle

1

Lavelle Rd Off Palace Rd Off Cunnigham Rd Ulsoor Rd Richmond Rd Sadhashivnagar

Rental Values (INR/month)

micro markets. However, developers active in peripheral locations are expected to be more flexible towards other lease terms such as rent free periods, escalation rates etc. Bangalore's office market has been predominantly driven by IT/ ITeS with the sector being the major office space occupier over the past 4-5 years. However, following the trends of 2008 as mentioned above, the Telecom, Automotive and Biotech sectors are likely to be more active in office space leasing in 2009.

-5

Annual Growth Rate (%)

Source: Cushman & Wakefield Research Rental Trough

-25

0

-30

Low

High

Malleshwaram Rajajinagar

-20

20,000 Vasanth Nagar Richmond Town Indiranagar

-15

40,000

Jayanagar, JP Nagar, Kanakpura Rd, Kanakpura Rd Cox Town Frazer Town Banaswadi HRBR

-10

60,000

Hebbal Bellary Rd Yelahanka Dodballapur

-5

80,000

Koramangala Jakasandra

0

100,000

Sarjapur Rd Outer Ring Rd HSR Layout

There has been a progressive demand slowdown in Bangalore's residential market over the last year with successive rises in interest rates since end-2007, that led to home loans becoming increasingly unaffordable for the common man. In a bid to encourage sagging consumer confidence, private and nationalised banks lowered home loan rates during the last few months of 2008, although the decline was marginal and the impact limited.

5

120,000

Marathalli Whitefield Airport Rd

RESIDENTIAL

140,000

Brunton Rd Artillery Rd Ali Askar Rd

Rental Values (INR/month)

Source: Cushman & Wakefield Research

Annual Growth Rate (%)

Average Residential Rental Values - Mid End2

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

This slump led to an alternative option for end-users to purchase property from the secondary market, where investors had begun to increasingly take the distress sale route by mid-2008. A few of the city's quality projects from reputed developers also saw distress sales in the range of 1015% discounted rates in the secondary market.This primary market fall in sales led a few developers to even resort to freebies and early bird discounts, offering anything from free cars and free fit-outs to parking space discounts and pre-EMI cost-bearing facilities in a bid to push sales. While the demand slowdown from end-users and investors continued, especially in the sale/ purchase of residential units, the added pressure from the secondary market finally forced primary market values to start declining in the fourth quarter of 2008. By end-2008 even the secondary market sale volumes became limited, greatly impacting the city's residential market. Rental Values Rental values for both high-end and mid-range properties across most micro-markets in the city remained stable till 3Q 2008, before the correctional trend began in the last quarter

By 4Q 2008, the mid-range segment finally witnessed an average drop by 10% across all micro-markets, except off central locations which remained stable. The maximum rental depreciation took place in the micro-markets of Whitefield and Marathalli (east), which saw a continuation of their earlier correctional trend. These particular micro-markets were understandably hit the hardest at a time when the market in general began to bottom out. With sufficient choice available to end users coupled with subdued demand, tenants in the city seem to have gained an edge over landlords with regard to negotiations. Capital Values Capital values for both high-end and mid-range properties across the city remained stable on an average till 3Q 2008. It was not till 4Q 2008 that a select few developers in the city began to announce price cuts ranging from a 10% cut across all properties to an average 30% dip for premium projects alone. 1 2

Average high end values are for properties in the range of 3,000 - 5,000 sq.ft. Average mid end values are for properties in the range of 1,700 - 2,500 sq.ft.

19

BANGALORE MARKET OUTLOOK Towards the last quarter of 2008, residential capital values saw an average drop of 10% across both high-end and mid-range properties in most micro-markets. As discussed earlier, the only micro-market to witness corrections throughout the year was Whitefield and Marathahalli. The midrange south east micro-market of Sarjapur Road, Outer Ring Road and HSR Layout also saw significant depreciation in capital values over last year. This was primarily because quite a few projects on Sarjapur Road witnessed a 19-20% dip in the secondary market over end-2007, forcing primary values to come down too. Average Residential Capital Values - Mid End2

5,000

-5

4,000 -10

3,000 2,000

-15

1,000

RETAIL

-20

Low

High

Malleshwaram Rajajinagar

Vasanth Nagar Richmond Town Indiranagar

Cox Town, Frazer Town, Banaswadi HRBR

Jayanagar, JP Nagar, Kanakpura, Rd, Kanakpura Rd

Hebbal Bellary Rd Yelahanka Dodballapur

Koramangala Jakasandra

Sarjapur Rd Outer Ring Rd HSR Layout

Marathalli Whitefield Airport Rd

Brunton Rd Artillery Rd Ali Askar Rd

0

Annual Growth Rage (%)

Source: Cushman & Wakefield Research

15,000

0

2

-2 1,0000

-4 -6

5,000

-8

Low

High

-12 Hebbal Yelahanka Jakkur

Whitefield (Villas)

Koramangala, Outer Ring Rd

Frazer Town Benson Town Richards Town Dollars Colony

-10

Annual Growth Rate (%)

4

Lavelle Rd Off Palace Rd Off Cunnigham Rd Ulsoor Rd Richmond Rd Sadhashivnagar

Capital Values (INR/sq.ft.)

Average Residential Capital Values - High End1 20,000

Annual Growth Rage (%)

Source: Cushman & Wakefield Research

Outlook North Bangalore gained special significance for city developers ever since plans for the Bangalore International Airport (BIA) at Devanahalli were finalised. The state government was also proactive towards this end by providing the necessary support infrastructure and by improving connectivity with the CBD. Quite a number of projects were launched in this micro-market over the last couple of years from reputed developers. While a few of these projects are already operational in Hebbal, Sahakar Nagar, Jakkur, etc., others are expected to come into the market by 2009-10 in and around Yelahanka, Coffee Board Layout, Thanisandra, etc. Another micro-market to see a significant amount of future residential supply is Bannerghatta Road and Kanakpura Road in south Bangalore. There are quite a few residential developments planned along Bannerghatta Road and its surrounding areas, with approximately 4,000 units proposed

20

Affordable housing projects in the city are likely to gain importance in the coming years (2009-2010). A growing trend has already seen budget, 2 BHK properties (800-1,000 sq.ft.) from prominent developers priced in the INR 2-3 million bracket.

By 2H 2008 Bangalore's retail real estate sector began feeling the heat of the current economic slowdown. The general drop in consumer spending together with unviable retail rentals translated into dipping rental rates, especially across the city's prime high streets. Mall rentals, however, continued to remain stable over the year, basically because of the lack of any significant mall supply and a very low churn-out rate in operational malls. The overall environment of cautious commitment to fresh space uptake from retailers and mall developers alike will most likely continue in the mid-term, till the market begins to recover and consumers return to stronger consumption patterns. Mall Development Bangalore witnessed about 0.34 million sq.ft. of mall development in 2008, which is about half the supply (55%) as compared to last year. The new malls become operational in the second and the fourth quarters of the year. The country's first luxury mall, The Collection, became operational in 2Q 2008 with luxury retail giant, Louis Vuitton, as one of its anchors. The mall today houses luxury fashion and lifestyle Mall Supply Trend 10.00

8.00

Area (million sq.ft.)

0

6,000

0

The current economic scenario has changed the outlook for investment options in this sector in Bangalore. The market is expected to witness further price weakening in the mid-term, till market conditions and consumer confidence improve. At present the market is suited for long-term investors; more so for end-users rather than for investors looking at short-term capital gains.

5

7,000

Annual Growth Rate (%)

Capital Values (INR/sq.ft.)

8,000

to be ready by 2010-11. The Kanakpura Road stretch is also likely to see approximately 7,000-8,000 residential units by the same time period. Hosur Road and Electronics City are other areas that are also likely to see some fresh residential supply in the next couple of years.

6.00

4.00

2.00

0.00 2006

2007

2008

2009 (F)

2010 (F)

Year

Source: Cushman & Wakefield Research 1 Average high end values are for properties ranging from 3,000 to 5,000 sq.ft. 2 Average mid end values are for properties ranging from 1,700 to 2,500 sq.ft.

BANGALORE MARKET OUTLOOK Average Mall Rental Trend

2008 were Reliance Mart, Spencer's Hyper and Croma.

Rental Values (INR/sq.ft./month)

600

Indiranagar 100 Feet Road, followed by Koramangala 80 Feet Road, saw the maximum store launches in 4Q 2008. The last quarter also saw the launch of Prestige Emporium (60,000 sq.ft) on MG Road, with fashion outlets of Stanza, Indigo Nation, Provogue, Urbana, etc. More fashion and lifestyle stores are expected to start operations here in 1Q 2009.

500 400 300 200 100

Average Main Street Rental Trend 0 2Q-07

3Q-07

4Q-07

1Q-08

2Q-08

Koramangala

Magrath Road

Mysore Road

Vittal Mallya Road

3Q-08

4Q-08

Cunningham Road

Source: Cushman & Wakefield Research

outlets of Canali, Dunhill, Tod's, Salvatore Ferragamo, Tag Heuer, Mont Blanc and Ermenegildo Zegna among others. On the other end of the retail spectrum, Total Hypermarket began operations at the Total Mall on old Airport Road in 4Q 2008. Upcoming stores at this partially operational mall include Benetton, McDonald's, Adidas, etc. With the Bengaluru International Airport (BIA) becoming operational in 2Q 2008, modern airport retailing also made an entry into the city this year. But what needs to be noted is that nearly 1.5 million sq.ft. of supply was expected for the city in the beginning of the year and only 23% was delivered. Limited supply addition helped to keep the city's vacancy level to a low of about 3%. Of the proposed 2008 supply, about 1.14 million sq.ft. has been deferred, with nearly 82% of this staggered supply expected to come up by the second half of 2009. The remaining has so far been scheduled for completion by 2011. At present the expected mall supply for 2009 is about 2.52 million sq.ft. over approximately eight malls. The vacancy rate for the city's malls stood at about 3.12% by year end, which marginally increased from 2.20% in 3Q 2008. This was largely because of the partially operational Total Mall (Old Airport Road) coming up in 4Q 2008.Vacancy rates were lowest in the CBD/off CBD, while the suburban area had the highest vacant stock by end-2008. The net retail absorption for the last quarter of 2008 stood at 154,282 sq.ft. In the absence of leasing volumes in existing and upcoming properties (together with the low turnover in existing malls since 2007), it has been difficult to establish a rental trend for the year which appears to be stagnant. However it is anticipated that new transactions in the current retail market scenario will more likely be at corrected rates. Main Street Development In line with last year's trend, the city's main streets remained more active than its malls in 2008, albeit at a much slower pace during 2H 2008 in comparison to retail activities during the same period in 2007. In the first quarter, Koramangala especially saw the launch of quite a few standalone large format outlets, such as, Star Bazaar from Trent Ltd and the Landmark Group's Oasis Centre, which houses SPAR Hypermarket, Lifestyle, Home Centre and Max Retail among others. Other large format outlets to start operations in 1H

Rental Values (INR/sq.ft./month)

1Q-07

400

300

200

100

0 1Q-07

2Q-07

3Q-07

4Q-07

1Q-08

2Q-08

3Q-08

4Q-08

MG Road

Brigade Road

Commercial Street

Indiranagar - 100 Feet Rd

Jayanagar - 4th Block, 11th Main

Malleswaram - Sampige Rd

Koramangala - 80 Feet Rd

Vittal Mallya Road

New BEL Road

Source: Cushman & Wakefield Research

While ground floor rentals of a few established main streets experienced a marginal upswing in 1Q 2008, by 2Q 2008 rental values peaked, and the market witnessed resistance to the lease of retail spaces at those values. By 2H 2008 another trend saw a few retailers, who had already committed to space earlier in the year, beginning to re-negotiate on lease terms in the light of the economic downturn. In 4Q 2008 main street rentals saw an average rental depreciation of approximately 15% across all micro-markets over 4Q 2007, with Sampige Road, Malleshwarm (-28%), and MG Road (-25%) witnessing the maximum fall in rentals. Main street rentals in the city are likely to continue dipping in the mid-term. Outlook Since 2H 2008 most branded retail players in the city held new property deals at bay, because of the current economic slowdown. As a fall-out rental corrections set in by end-2008. With bottom lines of retail businesses getting affected because of the comparatively conservative buying behaviour among the city's shoppers over the previous year, in addition to peak rentals earlier in the year, retailers have understandably kept off fresh occupancy offers. This overall hesitant attitude is likely to continue into 2009, till the retail market recovers. At present both mall and high street rentals in the city are expected to continue depreciating in the mid-term. Such a correction might translate to a healthy sectoral growth in the long term as realty prices make more business sense for retailers. Considering the unavailability of large spaces at operational malls and the limited supply set to come in by end-2009, high streets are likely to remain active in Bangalore. Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

21

PUNE MARKET OUTLOOK Kasarwadi

Lohegaon St Nagar

Wakad Hinjewadi

Army Area Sanghvi

Adarsh Nagar

Dapodi

Sindhi Colony NCL Colony

Rd

rp or t

Kharadi Bombay Sappers Regiment

Kalyani Nagar

Wadgaon Sheri

Ashok Nagar Sangamvadi Bund Garden

Wadervadi

JM R d

FC R

d

SB Road

Bavdhan

r Naga

Range Hills Ganesh Khind Rd

Sus Gaun

Viman Nagar

Parvati

PUNE

Goklalenagar

MG Rd

Baner

Phulenagar

Khadki Bazaar

Aundh

Rd

Tingre Nagar

Mula River Khadki

Ai

Rakshak Society

Cavalry Line

Kavadewadi Koregaon Park

Sho

lapu

rR d

Ghorpuri Magarpatta City

Navi Peth

Kothrud

Dattavadi Hingne Budrukh Vittalvadi

Pune Cantonment

Parvati Hills Parvati Darshan

Wanowri Sasane Nagar

Maharshi Nagar

Hadapsar

Wanwadi

Warje Malvadi Balaji Nagar

Wadgaon Budruk

Khadakwasla

Kondhwa Khurd

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL The total supply of commercial office space across Pune was 9.41 million sq.ft. in 2008, recording an increase of approximately 20% over the last year. Approximately 4.1 million sq.ft. of this supply was in SEZs. Peripheral locations were the major contributors adding approximately 62% towards supply, primarily catering to IT/ITeS sector. Kharadi witnessed the maximum supply in 2008 totalling approximately 2.3 million sq.ft. followed by Hadapsar and Hinjewadi which witnessed 1.5 million sq.ft. and 1.1 million

sq.ft. respectively. Total supply of approximately 804,000 sq.ft, has been deferred to 1Q 2009 owing to delays in construction schedule of various projects. Majority of this supply was concentrated in suburban micro market and catered to the IT/ ITeS sector. Pune witnessed a total demand of approximately 3.65 million sq.ft. in 2008 of which 1.73 million sq.ft. was absorbed during the year and an additional 1.92 million sq.ft. was pre committed for the supply expected to enter the market in 2009. The total absorption in 2008, including 1.29 million sq.ft.

Office Supply - 2008

Sectorwise Absorption Trend - 2008 1% 1% 3%

6%

48% 44%

89%

8% Non IT

Source: Cushman & Wakefield Research

22

IT SEZ

IT Park

Other

IT & ITeS

Shipping

Telecommunication

Source: Cushman & Wakefield Research

BFSI

PUNE MARKET OUTLOOK

10

18

9

16

8

14

7

12

6

10

5 8

4

4

2

2

1

0

0 2001

2002

2003

Supply

2004

2005

Absorption

2006

2007

2008

Vacancy Rate (%)

Source: Cushman & Wakefield Research

Average Rental Values - Office Districts1 70

50

12

40 8

30 20

Growth Rate (%)

16 60

4

Dec 2007

Dec 2008

Hinjewadi

Sholapur Road

Hadapsar / Kharadi

Viman Nagar

Kalyani Nagar and Nagar Rd

Aundh/ Baner

Airport Rd

SB Road

10 Camp/ Bund Garden Rd.

Rental Values (INR/sq.ft./month)

70 60 50

40 30 20

SB Road Kalyani Nagar and Nagar Rd Sholapur Rd

4Q - 08

3Q - 08

2Q - 08

4Q - 07

1Q - 08

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

1Q - 06

4Q - 05

3Q - 05

2Q - 05

4Q - 04

1Q - 05

3Q - 04

2Q - 04

1Q - 04

4Q - 03

3Q - 03

0

2Q - 03

10

Airport Road Viman Nagar Hinjewadi

Pune recorded an overall vacancy in the range of 16-20% in 2008 as compared to 8% the year before due to a combination factors like excess supply and lower demand in a slowing market. The peripheral micro markets witnessed approximately 62% of the total supply during the year causing it to also witness the highest vacancy of approximately 1820%. CBD and Off CBD locations witnessed vacancy in the range of 10-15%, largely due to companies showing a preference towards peripheral locations as they have lower rental values. The first three quarters witnessed constrained vacancy rates ranging from 4-7% which significantly increased to approximately 16-20% in 4Q 2008.

20

80

0

80

Source: Cushman & Wakefield Research

6

3

90

Camp/ Bund Garden Rd Aundh / Baner Hadapsar / Kharadi

Vacancy Rate (%)

Area (million sq.ft.)

Supply, Absorption and Vacancy Trends

1

Average Rental Values Trend - Office Districts

1Q - 03

The highest demand of 1.91 million sq.ft. was witnessed in 1Q 2008 led largely by pre-commitments of 1.42 million sq.ft. The global market slowdown led to reduced demand in the second half of 2008 which was entirely driven by absorption with no pre commitments.

serviced office spaces, Regus expanded its operations in Hadapsar in 3Q 2008.

Rental Values (inr/sq.ft./month)

absorbed from pre-commitments from before 2008, accounted for 3.02 million sq.ft. 1Q 2008 witnessed the highest absorption of 1.68 million sq.ft. mostly consisting of pre-commitments from the previous years. 2Q 2008 recorded absorption of 570,000 sq.ft. where as the absorption in the third and fourth quarter was 390,000 sq.ft. and 380,000 sq.ft. respectively.

0

Growth Rate (%)

Source: Cushman & Wakefield Research

The primary demand driver was IT/ITeS sector followed by other sectors such as BFSI, Shipping, Telecommunication, etc. Hinjewadi witnessed the highest demand of commercial office space in 2008 driven primarily by IT/ITeS sector companies accounting for approximately 49% of the total demand. Out of the total pre commitments of 1.92 million sq.ft. made during the year, approximately 1.25 million sq.ft was witnessed in Hinjewadi by the IT/ITeS sector, majority of which were seen in the SEZs. Pune has been witnessing an upward trend in the demand for premium and internationally accredited Business Centres. Vatika Business Center, Regus Business Center and MLS are the premium business centres currently operating from the micro markets of CBD, Off CBD and peripheral aresa of the city respectively. Owing to the increasing demand of such

The quarter – on – quarter growth in rentals was high in the first two quarters due to buoyant demand witnessed in the first half of 2008. With a large amount of supply entering the Pune market in the third quarter, the rental values stabilized across all micro markets in that period and showed clear signs of softening thereafter in all micro markets in the fourth quarter largely due to a slowdown in activities from the key demand drivers like IT/ITeS and BFSI sectors. The steepest decline of 17% was recorded in the peripheral locations such as Hadapsar and Kharadi in 4Q 2008, as these markets had attained unrealistic price points forcing them to undergo a correction. Owing to general downturn in leasing activities due to limited expansion plans by companies, coupled with large vacant stock, the rental values in Kalyani Nagar and Nagar Road witnessed a quarterly drop of 10% in 4Q 2008 followed by Aundh and Baner at 9%. Outlook Pune is expected to witness fresh supply of approximately 9.78 million sq.ft. in 2009 of which approximately 2.98 million will be dedicated to SEZs and concentrated in the peripheral micro markets. This large upcoming supply coupled with subdued demand is likely to bring further correction in rental values. The demand will continue to be driven primarily by the ITeS and BFSI (Banking, Financial Services and Insurance) 1 Above rentals are for warm shell facilities (shell and core facility, power, high side air conditioning and 100% power backup)

23

PUNE MARKET OUTLOOK sector companies but is expected to remain subdued due to large supply which is expected to enter the market in 2009.

-10

15000 10000

-15

5000

-20

0

-25

Market Bottoming

Low

High

Annual Growth Rate (%)

-5

20000

Wanowri

Market Recovery

0

25000

Koregaon Park Bund Garden Kharadi

Weakening Market

Strengthening Market

5

30000

Kalyani Nagar

4Q 2009 (F)

10

35000

Wakad

Market Recession

15

40000

Baner

Market Slowing

4Q 2008

45000

Aundh

Rental Peak

Rental Values (INR/month)

Rental Cycle

2

Average Residential Rental Values - Mid End

Annual Growth Rate (%)

Source: Cushman & Wakefield Research Rental Trough

Source: Cushman & Wakefield Research

been deferred by six to eight months and projects in planning/ initial construction stages are expected to be delayed further.

RESIDENTIAL

Rental Values

Pune witnessed a mix of township developments as well as standalone apartment projects during 2008. Due to limited availability of land in the central locations, large scale supply was primarily concentrated in the peripheral and suburban locations such as Hinjewadi, Hadapsar, Kharadi and Wakad.

Rental values across both mid end and high end segment remained stable till 3Q 2008 with an exception of micro markets such as Koregaon Park, Bund Garden Road, Kharadi and Kalyani Nagar, which observed appreciation in both high end and mid end rental values in the 3Q 2008 mainly due to increased demand from multinational clients. However, in 4Q 2008 the rental values across most micro markets witnessed correction in both high and mid range properties. The global economic slowdown affecting the hiring decisions of IT/ITeS, BFSI and other sector companies led to slowdown in fresh uptake of mid end residential apartments. This, along with excess supply caused the mid end rental values to decline across all micro markets in 4Q 2008. However limited availability of high end lease-able units in the central locations like Koregaon Park, Bund Garden Road, Kharadi and Kalyani Nagar led to stabilization of rental values in 4Q 2008.

150000 -10 100000 -20

50000

-30

Low

High

Source: Cushman & Wakefield Research

24

Wanowri

Kalyani Nagar

Aundh

Koregaon Park Bund Garden Kharadi

0

Annual Growth Rate (%)

-5

8000 -10 6000 -15

4000 2000

-20

0

-25

Low

High

Annual Growth Rate (%)

Source: Cushman & Wakefield Research 1 Average high end values are for properties ranging from 1,650 to 3,000 sq.ft. 2 Average mid end values are for properties ranging from 1,200 to 1,400 sq.ft.

Annual Growth Rate (%)

0

10000

Wanowri

0

12000

Kalyani Nagar

10

200000

Average Residential Capital Values - High End1

Aundh

Rental Values (INR/month)

250000

Annual Growth Rate (%)

20

300000

Capital values for both high end and mid end segment remained stable across majority of the micro markets till 3Q 2008. It was only in 4Q 2008 that the capital values began to

Koregaon Park Bund Garden Kharadi

Average Residential Rental Values - High End1

Capital Values

Capital Values (INR/sq.ft.)

With investors abstaining from the market it was essentially an end users driven demand due to which Pune witnessed a slowdown in demand in 3Q 2008. Conservative approach from end users and successive increase in interest rates as compared to 2007 led to slowdown in demand. However during 4Q 2008, the city witnessed a drop in rental and capital values in response to slow demand. Owing to economic downturn and slowdown in IT/ITeS and other service sectors, there was a definite erosion of job confidence which directly impacted the end users who deferred their purchase decisions. This also led to a negative demand supply ratio with supply superseding demand. Various developers, in order to boost their sales, were compelled to revise pricing of their residential properties and promotional methods such as discounts and incentives. Credit crunch to developers and subdued end-user demand have resulted in delays in construction of certain on going projects and postponement of a few upcoming projects. Several on going projects have

PUNE MARKET OUTLOOK Average Residential Capital Values - Mid End1

Capital Values (INR/sq.ft.)

5000

0

4000 -5 3000 -10 2000 -15

1000

Annual Growth Rate (%)

5

6000

-20

Low

High

Wanowri

Kalyani Nagar

Wakad

Baner

Aundh

Koregaon Park Bund Garden Kharadi

0

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

decline. Due to excess supply entering the market, Wanowrie witnessed the highest year on year decline of 20% across high end residential segment followed by Kalyani Nagar (13%) which attained high price points forcing it to undergo correction in the last quarter. In the mid end segment, Wakad recorded the highest decline of 15% over the year due to excess supply of projects under construction. With no new mid end supply Kalyani Nagar witnessed stable rentals throughout the year. The only micro market that witnessed a minor appreciation in mid end capital values was Aundh which recorded a marginal increase of about 3% in mid end capital values over the year. The boost to this micro market was provided by the corresponding growth of retail and commercial activities and improved connectivity from various parts of the city that impacted the demand in this location positively.

expressway and old Mumbai-Pune highway. The micro market is expected to witness a few large township developments with state of the art amenities and facilities. The demand for such developments is expected to be driven by employees from the manufacturing sector, along with investors from Pune as well as Mumbai. With the proximity to the new international airport coming up in Chakan, this micro market is likely to witness appreciation in capital values in long term. RETAIL Leasing activity was concentrated more on the main streets as compared to malls in 2008, with JM Road being the most active of all main streets. Both malls and main streets rentals witnessed correction during the second half of 2008 due to slowdown in demand resulting from cautious expansion plans by retailers. Mall Development Pune witnessed fresh mall supply of 218,000 sq.ft. in 2008 as against 850,000 sq.ft. last year with only one mall namely Kakade Centerport, commencing operations in 3Q 2008. The mall has Westside and Odyssey as its anchor tenants and houses several brands such as Next, The Body Shop, Louis Philippe, Adidas, Reebok, Levi's and Giordano, among others. About 100,000 sq.ft. of anticipated supply for 2008 has been deferred and is likely to enter the market in 2Q 2009. The expected supply in 2009 therefore stands at approximately 995,000 sq.ft. spread across 4 malls. Mall Supply Trend 5

Outlook

Developers are expected to focus more on affordable housing projects to meet the price-sensitive end user demand in the city.Various developers who have started construction work on their projects are already seen to have revised their plans by reducing the apartment size and thus the price per unit. The supply for high end residential projects is expected to be seen mainly in locations such as Koregaon Park, Hadapsar and Kalyani Nagar. The prominent upcoming high end projects are Matrix, Diva, Ritz by Marvel Developers and One North by Panchshil developers. These projects are likely to be completed in 2009-10. In the mid end segment, supply is likely to be concentrated in the suburban and peripheral locations such as Aundh, Baner, Kharadi, etc. Chinchwad has emerged as a preferred residential location owing to its good connectivity with the Mumbai-Pune 1 Average mid end values are for properties ranging from 1,200 to 1,400 sq.ft.

Area (million sq.ft.)

4

3

2

1

0 2006

2007

2008

2009 (F)

2010 (F)

Year

Source: Cushman & Wakefield Research

Average Mall Rental Trend 400 Rental Values (INR/sq.ft./month)

The current economic condition will further lead to reduced demand affecting the rental and capital values which are expected to weaken across all micro markets in short to mid term. Excess supply concentrated in the peripheral locations may lead to larger correction in these locations.

300

200

100

0 Q1-07

Q2-07

Q3-07

Q4-07

Q1-08

Q2-08

Q3-08

Q4-08

MG Road

Bund Garden Road/Koregoan Park

Ganeshkhind Road

Nagar Road

Source: Cushman & Wakefield Research

25

PUNE MARKET OUTLOOK The leasing activity on Ganeshkhind Road remained limited pushing the vacancy levels to approximately 13%. This resulted in a decline of approximately 14% in rental values over the year in Ganeshkhind Road. However, micro markets such as MG Road, Bund Garden Road and Koregaon Park registered year-on-year growth in rentals in the range of 7-9% largely due to lack of fresh supply entering the market during the year. Main Street Development The demand in 2008 was largely concentrated around the main streets of JM Road and Aundh. JM Road was the most active of all main streets with brands such as Reebok, Pepe and Stanza marking their presence on JM Road and United Colors of Benetton relocated to a larger store. Aundh has also emerged as a preferred main street due to its proximity to residential hubs. Additionally limited availability of space coupled with high rental values on established main streets has boosted demand for Aundh. Several brands such as Lee, Average Main Street Rental Trend Rental Values (INR/sq.ft./month)

500

Wrangler,VIP, Adidas, United Colors of Benetton, X-cite, etc, opened their stores on this main street during the year. The main streets witnessed increased demand from retailers in the beginning of 2008 due to lack of fresh mall supply as well as limited availability of space in operational malls. This resulted in appreciation of rental values across all main streets in 1Q 2008. However, there was a slowdown in rental growth in 2Q 2008 vis-à-vis 1Q 2008 and subsequently the rentals declined in the second half of 2008. As a result of the economic uncertainty, the retailers adopted cautious expansion strategies which resulted in a slowdown of demand for retail space during the second half of 2008, hence leading to rental correction across most main streets. Overall, as against 2007, the rental values witnessed an appreciation across most micro markets with JM Road witnessing the highest year-on-year appreciation to the tune of 48% followed by Aundh at 29%. MG Road was an exception witnessing correction of approximately 13% in rental values over the year. The rental values on MG Road reached its peak during the first half of 2008 pressuring store viabilities. Subsequently the rentals declined in the last two quarters.

400

Outlook 300 200 100 0 Q1-07

Q2-07

MG Road Koregaon Park

Q3-07

Q4-07 JM Road Aundh

Q1-08

Q2-08

Q3-08

Q4-08

FC Road Bund Garden Road

Both malls and main street rental values are likely to weaken in short to medium term due to restrained expansion plans by retailers. The fresh mall supply that is expected to enter the market in 2009 may further pressurize mall rentals. The slowdown in demand is likely to lead to further weakening of rental values in most main streets in short to medium term. However, main street of MG Road may witness stable rentals due to higher demand and lack of available leasable space.

Source: Cushman & Wakefield Research

Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

26

CHENNAI MARKET OUTLOOK Korattur

Royapuram

Vyasarpadi

Korattur Eri

Villivakkam

Perambur Old Washermanpet

CHENNAI

Dairy Rd

Man Rd

Ayanavaram

Choolai

MTH Rd Thirumangalam

Ambattur Industrial Estate

Purusavakam High Rd

Kilpauk

Anna Nagar

Poonamallee High Rd am kk ba am d ng gh R Nu Hi

Maduraivoyal

KNK Rd

Choolaimedu Vadapalani

Vanagaram Valasaravakkam

Sowcarpet

Periyamet GH Rd

Koyambedu

NSK Salai Usman Rd Theyagaraya Nagar

Arcot Rd

Porur

Chintadripet

lai a Sa Ann

Teynampet

Marina Beach RK Salai

Mylapore Boat Club

Nandanam

Santhome Beach

Adyar River

Nandambakkam Sardar Patel Rd St Thomas Mt

Triplicane

Royapettah Poes Cathedral R d Garden

RA Puram

Jawaharlal Nehru Rd

Mowlivakkam

Alandur

Besant Nagar

Adyar Guindy Tharamani

IIT Madras GST Rd

George Town

New Avadi Rd

Airport Thiruvanmiyur

Madipakkam

Sriperumbudur Pallavaram

Puzhuthivakkam

Valmiki Nagar

Velachery

Perungudi

Kotivakkam

Palavakkam Rajiv Gandhi Salai

Pallikaranai

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL The total absorption for the year 2008 was approximately 4.02 million sq.ft., considerably lower than the absorption of approximately 7 million sq.ft. witnessed in the previous year. Of this 4.02 million sq.ft. approximately 1.95 million sq.ft. was pre committed absorption while additional fresh pre commitments were recorded at 680,000 sq.ft. for the year 2009, bringing the demand estimate at 3.33 million sq.ft for the year 2008. Of the 9.8 million sq.ft. supply, approximately 54% was contributed by IT Parks, down from the 75%

witnessed last year which is a difference of approximately 2 million sq.ft. This lowering trend is expected to continue in the future owing to the large amount of existing vacant IT space coupled with the STPI tax benefits expiring as of March 2010. Approximately 39% (3.87 million sq.ft.) of the total supply was recorded as SEZ, with the remainder 7% (652,000 sq.ft.) being non IT commercial space, almost double when compared to the 343,000 sq.ft. in 2007. During the year, the third quarter witnessed the highest absorption of 1.73 million sq.ft. in line with the highest supply of 3.3 million. 3Q also witnessed the

Office Supply - 2008

Sectorwise Absorption Trend - 2008 13%

7%

3% 39%

5%

14% 65% 54% Commercial

Source: Cushman & Wakefield Research

IT SEZ

IT Parks

BFSI

IT & ITeS

Infrastructure

Manufacturing

Others

Source: Cushman & Wakefield Research

27

CHENNAI MARKET OUTLOOK weakening of rentals especially in the CBD and off CBD areas with developers willing to close out on larger deals and agreeing to tenant-favourable terms and lower rentals. The main demand drivers were IT/ ITeS, BFSI, Logistics and Telecom in the CBD and Off CBD regions. CBD witnessed supply of 222,000 sq.ft. of which 54% (120,000 sq.ft.) was absorbed during the year. Off CBD had the highest percentage absorption when compared with the supply that came in during the year. Areas such as T. Nagar, Chetpet and R.A. Puram, witnessed the highest quantum of absorption within the Off CBD region and continued to remain the preferred destination for corporates during the year. Off CBD witnessed absorption of 150,000 sq.ft. for each quarter, except for 4Q when absorption dipped to 60,000 sq.ft. Although rentals dipped in September, 4Q saw a drop in space absorption with an uncertain economic outlook resulting in postponed of expansion plans of various firms.

in other suburban areas only in the 4Q mainly due to negative market sentiments and economic uncertainty. IT/ ITeS, BFSI & Telecom sector continued to be the main demand drivers in the suburban areas, although the year also saw the rise of manufacturing corporations as space occupiers. Vacancy sharply increased from 13-15% in 2Q across the city to approximately 18% at year end. This surge can be mainly attributed to the speculative supply seen in the suburban markets increasing the suburban vacancy rate from 6-8% in 2Q to 18% at year end. Peripheral vacancy rates continued to remain above 40% although the deferment and slowdown in supply resulted in arresting the already acute vacancy situation. During the year, peripheral regions saw supply of 2.2 million sq.ft. of which approximately 1 million sq.ft. was absorbed. Rents stabilized in 2Q for the remainder of the year, although the current falling rentals in suburban areas are now expected to bring down rents further in the peripheral regions as well. Average Rental Values Trend - Office Districts1

Supply, Absorption and Vacancy Trends

2002

2003

Supply

2004

2005

2006

Absorption

2007

Vacancy Rate (%)

4Q - 08

3Q - 08

2Q - 08

4Q - 07

1Q - 08

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

1Q - 06

4Q - 05

3Q - 05

Outlook

Average Rental Values - Office Districts

0%

90 80

60 -10%

50 40

-15%

30 20

Growth Rate (%)

-5%

70

-20%

2007

2008

Peripheral-Rajiv Gandhi Salai

SuburbanPerungudi, Taramani

Suburban Ambattur

SuburbanGuindy

Off CBD-T.Nagar, Alwarpet (IT-Space)

Off CBD-T.Nagar, Alwarpet (Corporate)

CBD-Anna Salai, RK Salai (IT Space)

10 CBD-Anna Salai, RK Salai (Corporate)

Rental Values (INR/sq.ft./month)

CBD-Anna Salai, RK Ralai (IT Space) Off CBD-T.Nagar, Alwarpet (IT Space) Suburban-Ambattur Peripheral-Rajiv Gandhi Salai

Source: Cushman & Wakefield Research 1

-25%

Growth Rate (%)

Source: Cushman & Wakefield Research

Suburban areas recorded the highest quantum of supply and absorption during the year although excessive speculative supply in Ambattur of approximately 2.16 million sq.ft. resulted in an acute oversupply situation in this micro market. This oversupply could be noted in the rental movements as the rents corrected by 13% during 3Q and further in 4Q bringing it to a drop of 22% from its peak in 2008. Although Mt. Poonamallee Road witnessed the highest quantum of supply amounting to 2.8 million sq.ft. the pre-commitments in the SEZs here ensured low vacancy rates. Rentals corrected

28

2Q - 05

CBD-Anna Salai, RK Ralai (Corporate) Off CBD-T.Nagar, Alwarpet (Corporate) Suburban-Guindy Suburban-Perungudi-Taramani

2008

Source: Cushman & Wakefield Research

0

4Q - 04

0

0

0

10 1Q - 05

5

2

20

3Q - 04

4

30

2Q - 04

10

40

1Q - 04

6

50

4Q - 03

15

60

3Q - 03

8

70

2Q - 03

20

80

1Q - 03

10

Rental Values (INR/sq.ft./month)

25

Area (million sq.ft.)

12

Vacancy Rate (%)

90

The supply spill over of approximately 2.6 million sq.ft. from 2008 is likely to increase supply for 2009 projected at approximately 15.7 million sq.ft. of which approximately 7.3 million sq.ft. is accounted by SEZ. New SEZ projects and large scale campus developments of companies are likely to be deferred owing to a sea change in the business environment of companies that were previously in expansion mode. Whilst demand is likely to be driven by the IT/ ITeS sector, companies intending to commit space are likely to tread carefully in order to control their financial exposure. As funding options remain scarce and an extended dip in demand continues to plague market sentiments along with increasing vacancies, developers are likely to offer more innovative commercial terms to prospective tenants. For example, lease tenures are expected to reduce from the current 5 years to approximately 2 to 3 years with a reduced lock in period while demand for fully furnished space is expected to increase due to an apparent reduction in capital expenditure by corporations. The right to sublease is expected to be a strong point of negotiation between tenants and 1 Above rentals are for warm shell facilities (shell and core facility, power, high side air conditioning and 100% power backup)

CHENNAI MARKET OUTLOOK Rental Cycle

half of the year. Thus, most micro markets witnessed double digit annual appreciation in capital values.

Source: Cushman & Wakefield Research

developers; additionally spaces signed at premium rates in areas such as RK Salai, Nungammbakam High Road, MRC Nagar and Guindy are likely to be renegotiated in the near future. Areas such as Ambattur, which suffers from an oversupply of non SEZ - IT developments, will continue to witness weakening rentals and deter corporate space take up unless the government and/or developers improve the infrastructure in the vicinity. Certain IT Parks within the city limits are expected to apply for conversion back to non-IT park status, in light of the reduced IT demand and ambiguity over STPI tax exemption. RESIDENTIAL In Chennai, the demand for apartments has progressively increased over the past few years as compared to the traditional independent housing bias that used to be previously predominant. This is mainly attributable to the investor population and rise in the number of nuclear families, resulting in an increase in the sales for apartments and residential townships announced.

Average Residential Capital Values - High End1 80

30,000

70

25,000

60 20,000

50 40

15,000

30

10,000

20 5,000

Annual Growth Rate (%)

4Q 2009 (F)

10 0

0

Low

High

Kilpauk

Rental Trough

Anna Nagar

Market Bottoming

Nungambakkam

Market Recovery

Poes Garden

Weakening Market

Strengthening Market

Adyar

Market Recession

R. A. Puram

Market Slowing

The city witnessed growth during the year in two main corridors: in the south which includes areas such as Tambaram,Velachery, Rajiv Ghandi Salai and GST Road and in the west, the suburban markets of Mogappair, Porur, Virugambakkam and Nandambakkam. These markets witnessed capital appreciation of 20-40% over last year in the mid end segment with strong demand owing to the proximity to work and infrastructural initiatives undertaken by the government in these areas. SINK's and DINK's (Single income no kids and double income no kids) showed preference towards residences closer to their workplace while families with children took into consideration social infrastructure such as schools & recreation centres thus preferring to limit their search to the suburban areas. On the Rajiv Ghandi Salai stretch, beyond Sholinganalur, the price movement was project specific rather than location specific. Additionally, infrastructure initiatives like metro connectivity, construction of the Inner Ring Road (between GST road and NH4) etc. have brought additional demand to north-western regions of Anna Nagar and Mogappair.

Boat Club

4Q 2008

Capital Values (INR/sq.ft.)

Rental Peak

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Capital Values

Chennai residential sale market continued to remain insulated from the correction that is being witnessed in the other sectors of the city and across other parts of the nation. The capital values across Chennai saw stabilization in the second half of the year after witnessing a steep incline during the first

5

0

0

Low

High

Annual Growth Rate (%)

10

2,000 Kilpauk

15

4,000

Anna Nagar

20

6,000

Nungambakkam

25

8,000

T. Nagar

30

10,000

Poes Garden

35

12,000

Velachery

40

14,000

Adyar

45

16,000

Rajiv gandhi Salai (Perungudi)

18,000

R. A Puram

Nungambakkam did not witnesses any launch in the high end market during the year of 2007 and the launch of Patio by Vijaya Shanti during 2008 met the pent up demand in this area leading to the phenomenal rise in capital values of 71% over the previous year. However, this rise has been skewed heavily by this particular project and on an average the increase in values was more subdued.

Average Residential Capital Values - Mid End2

Capital Values (INR/sq.ft.)

The affluent continued to favour coveted central locations of Boat Club, Poes Garden, RA Puram etc., and the former two locations witnessed launches of ultra luxury apartments. The high demand for quality housing ensured the steady rise of capital values ranging from 12-28% in these areas.

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

1 Average high end values are for properties ranging from 1,800 to 4,000 sq.ft. 2 Average mid end values are for properties ranging from 1,000 to 2,000 sq.ft.

29

CHENNAI MARKET OUTLOOK Rental Values While the rental markets in the high end segment continued to be buoyant during the first half of the year, it witnessed stabilisation in the last quarter. The Tamil Nadu Electricity Board (TNEB) announced load shedding in various parts of the city, which resulted in properties, with 100% power back up, commanding a hefty premium in rentals. Landlords in the high end rental market are increasingly providing the lessee with the power back up option in order to command a higher rental.

40

150,000

30

100,000

20

50,000

10

High

Kilpauk

Anna Nagar

0

RETAIL

Average Residential Rental Values - Mid End2 100 90 50,000

80 70

40,000

60 50

30,000

40 20,000

30 20

10,000

Annual Growth Rate (%)

Rental Values (INR/month)

60,000

10 0 Kilpauk

Anna Nagar

Nungambakkam

T. Nagar

Poes Garden

Velachery

Rajiv Gandhi Salai (Perungudi)

Adyar

R. A. Puram

0

High

GST Road is expected to be a preferred destination, as it enjoys good road and rail connectivity to all parts of the city. Additionally, being well connected to the IT and industrial corridor has created demand for both middle income and premium residential buildings in this locality.

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Low

The relaxation on costal regulation zone constructions is likely to generate renewed interest by developers and investors along the East Cost Road. Rajiv Ghandi Salai is expected to continue to see weakening capital values due to large supply entering the market in 2009, delays in existing projects causing investors to exit at a discounted value, weak social infrastructure which in turn is likely to prompt more focus on GST Road that boasts of a relatively stronger physical and social infrastructure in this region.

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

The mid end rental markets continued to remain stable for the whole year. Additionally the landlords continued to have a conservative attitude as most refrained from increasing rent substantially and were willing to negotiate rents in order to fill the vacancy. Leasing volumes continued to remain robust for the entire year and are expected to remain so in the near future.

Chennai continues to witness a dearth of quality retail supply across the city and the deferment of various malls added to the woes of high end retailers seeking to enter Chennai. The city witnessed correction in retail rentals during the fourth quarter as economic uncertainty led to a more conservative attitude from both consumers and retailers alike. Mall Development The dry spell of 2007 continued in the first 3 quarters of 2008, while in the last quarter Chennai witnessed a supply of 0.15 million sq.ft. with the long overdue Ampa Mall becoming operational. The proposed 1.15 million sq.ft. of mall space, spread over 2 malls, that was expected during the year 2008 has been deferred into 2009. The years 2010 and 2011 are projected to witness approximately 14 malls (approximately Mall Supply Trend 3.00

Area (million sq.ft.)

Low

Poes Garden

Boat Club

0

Annual Growth Rate (%)

50

200,000

Nungambakkam

60

250,000

Adyar

300,000

R.A. Puram

Rental Values (INR/month)

Average Residential Rental Values - High End1

development rights. Additionally market dynamics will also prompt developers to focus on the affordable category and thus focus on value housing thus providing stronger infrastructure and less frills such as clubs, swimming pools etc. This can be seen in some of the recent announcements by developers to create projects along these lines.

2.00

1.00

Outlook The Chennai Master Plan 2026 is expected to provide the LIG and EWS housing sector with the necessary fillip and is expected to bring a change in the residential scenario of Chennai especially in the peripheral regions. Developers are expected to focus on LIG and EWS housing due to the incentives offered in the master plan 2026 of extra FSI, relaxation in development control rules and transfer of

30

0.00 2006

2007

2008

2009 (F)

2010 (F)

Year

Source: Cushman & Wakefield Research 1 Average high end values are for properties ranging from 1,800 to 4,000 sq.ft. 2 Average mid end values are for properties ranging from 1,000 to 2,000 sq.ft.

CHENNAI MARKET OUTLOOK Average Main Street Rental Trend

Average Mall Rental Trend 250 Rental Values (INR/sq.ft./month)

Rental Values (INR/sq.ft./month)

300 250 200 150 100 50

200 150

100 50

0 0

1Q-07 1Q-07

2Q-07

3Q-07

4Q-07

Chennai - CBD (central)

1Q-08

2Q-08

3Q-08

4Q-08

Chennai - Suburbs (western)

2Q-07

3Q-07

4Q-07

1Q-08

Khadar Nawaz Khan Rd Cathedral Rd - RK Salai

Anna Nagar 2nd Avenue Adyar Main Rd

Usman Rd - South

Khadar Nawaz Khan Rd

2Q-08

3Q-08

4Q-08

Nungambakkam High Rd Purusavakam High Rd

Source: Cushman & Wakefield Research

Source: Cushman & Wakefield Research

6.2 million sq ft.); however, it is anticipated that a majority of this mall supply will not be operational as per schedule since several of these projects are yet to commence construction. Malls in their initial stages of construction are actively seeking to sign up with key anchors like Hyper markets, department store and multiplexes.

in order to gain first mover advantage and expand their presence across the city. Demand for retail space relatively decreased during the last quarter leading to lower number of transactions causing the rentals to correct across all micro markets.

During the start of the year, approvals were the main concern with most of the malls, although towards the latter half apprehensions regarding liquidity and construction schedules became more apparent. Although mall rentals witnessed correction, the quantum of this drop was not comparable to other cities that had recorded significant appreciation over the years and hence had a larger scope for correction. Additionally due to the continuous deferment and limited supply entering the market, mall rentals in Chennai witnessed and are expected to continue witnessing a lower correction in percentage terms as compared to other cities as well as against most high streets within the city. Projects in the central and western regions of Chennai are being closely watched by retailers - wanting to establish a footprint across the city but are weary of the delays; these projects are expected to witness a surge in leasing as the mall nears completion.Various international brands looking at establishing a footprint in the city are considering options in the more mature markets and thus want to be located centrally. Main Street Development Due to the low mall supply, retailers maintained a bias towards main streets and especially towards stand alone stores. Developments offering larger floor plates in established retail precincts continued to remain sought after and this trend is expected to continue into the near future. New high end retailers continued to explore options in the established markets of Khadar Nawaz Khan Road and Nungambakkam High Road due to the presence of high end catchments and large visibility. However, limited availability of quality space caused them to refrain from signing up on space during the year. Established regional retailers continued to expand their operations into new micro markets especially focusing on the peripheral micro market of Rajiv Ghandi Salai

Outlook Retailers are cautious about their financial commitments in any location, which in turn will prolong negotiations despite their interest in the city. Traditionally south has been working on higher security deposits, but due to the increasing rentals in previous years the deposit amount have become substantial and this amount is expected to receive increased emphasis by retailers during future negotiations. Infrastructure developments announced during the year and the new city master plan are changing the landscape of the city as flyovers and MMRTS, metro is making retailers and developers alike reconsider their positioning in the market, in order to maximize footfalls and visibility. Rentals across Chennai are expected to further correct from their current levels across all micro markets. As retail space per person in Chennai is very low, the limited future supply will ensure the correction to not be as sharp as other cities. Emerging high streets such as Wallace Garden Road, Anna Nagar 3rd Avenue are expected to witness sharper correction as compared to established high streets like Nungambakkam High Road, Cathedral Road - RK Salai, T. Nagar (pondy bazzar) nd and Anna Nagar 2 Avenue to name a few. Premium retailers would reconsider markets such as Khader Nawaz Khan Road nd in light of the correction while Anna Nagar 2 Avenue, T. Nagar, are expected to witness demand from lifestyle brands due to the heavy footfalls and strong catchments of these markets. Rentals are expected to stabilize towards 2H 2009 with demand is likely to improve considerably from current levels as the falling rentals will enable retailers to set up profitable stores. Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

31

HYDERABAD MARKET OUTLOOK NH9

Kukatpally

University of Hyderabad

Marredpally SR Nagar

Hitech City

Malkajgiri

Madhapur Begumpet Ameerpet

Gachibowli

Nacharam Industrial Area

Sanjeevajah Park

Yousufguda

NTR Garden

Jubilee Hills

Mumbai Rd

Hussain Sagar

Somajiguda

Banjara Hill

Punjagutta KBR National Park

Tarnaka Padmarao Nagar

Himayat Nagar

Habsiguda

Ram Nagar

Shaikpet Masab Tank

Army Area

Warangal Rd Nallakunta

Mehdipatnam

Manikonda

Osman Sagar Rd Military Area

Ramanthapur

Vijay Nagar Colony

Tolichowki Langar House

Uppal

Osmania University

Nagole Rd

Kachiguda Nampally

Abids

Karwan

Amberpet

HYDERABAD

Uppal Kalan

Malakpet

Nagole

Rambagh

Dilsukhnagar Nehru Zoological Park

Mrigavani National Park Chintalmet Katedhan Industrial Area

Mir Alam Tank

LB Nagar Rd

Saidabad Colony

Charminar Lal Barwaza

LB Nagar

Mahavir Harini Vanasthali National Park

NH 9

Nawab Saheb Kunta

Kanchan Bagh

Vanasthalipuram

Musa River Hymayat Sagar Rd

Rajendra Nagar Premavathi NH 7 Pet

Himayat Sagar

Budvel

Inner Ring Rd

Gurram Guda

Shamsabad

Hayat

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL Hyderabad witnessed approximately 3.84 million sq.ft. of fresh supply across all micro markets during 2008 as compared to 4 million sq.ft. witnessed in the previous year.

ITeS sector continued to be the prime focus amongst developers as nearly 85% of the 2008 supply was targeted towards this sector with IT SEZ supply being estimated at 34% of the total.

Suburban regions comprising of Madhapur and Gachibowli witnessed majority of the supply (69%) including 930,000 sq.ft of SEZ supply. Peripheral region of Pocharam witnessed 360,000 sq.ft. of SEZ development and with this the total SEZ supply in the city stood at nearly of 1.29 million sq.ft. The IT/

Although, nearly 7 million sq.ft. of fresh supply was anticipated to be available during 2008, only 55% of the same materialized. Most of the projects in the suburban micro market were deferred due to the prevailing uncertainties in the economy, thus adversely impacting the real estate sector at large. Fourth quarter of 2008 witnessed the highest supply

Office Supply - 2008

Sectorwise Absorption Trend - 2008 2% 2% 2%

15%

15% 34%

79% 51% IT Developments

Source: Cushman & Wakefield Research

32

Non-IT

IT SEZ

BFSI

IT & ITeS

Infrastructure

Consulting

Source: Cushman & Wakefield Research

Others

HYDERABAD MARKET OUTLOOK (46%) of approximately 1.78 million sq.ft. due to delayed completion of projects. Shrinking liquidity with developers, staggered consumer demand and increase in overall cost of construction are the prominent factors responsible for delay in project completion. Supply, Absorption and Vacancy Trends 20

5

constituted approximately 1.33 million sq.ft. (inclusive of precommitted absorption totaling 249,000 sq.ft.) and the balance constituted of fresh pre-commitments entirely in IT/ITeS developments which are likely to be absorbed in the first half of 2009. The suburban micro market accounted for 933,600 sq.ft. (70%) of the total absorption which was followed by the peripheral micro market of Pocharam and Off CBD micro markets each accounting nearly 11% of the total absorption.

18 Area (million sq.ft.)

Vacancy Rate (%)

16

4

14 12

3

10 8

2

6 4

1

2 0

0 2001

2002

2003

2004

Supply

2005

2006

Absorption

2007

2008

Vacancy Rate (%)

Source: Cushman & Wakefield Research

20

50

15

40

10

30

5

20

0

10

-5

0

-10

Suburban

Prime Suburban

Off CBD

2007

2008

Growth Rate (%)

60

Peripheral II

25

Peripheral I

70

CBD

Rental Values (INR/sq.ft./month)

Average Rental Values - Office Districts1

Growth Rate (%)

The overall vacancy rates in the city were estimated in the range of 9-14% as against 3-4% during the first quarter of the year. This largely indicated the increasing gap between supply and space uptake due to demand slowdown.Vacancy rate in both CBD and Off CBD micro markets was nearly 11% where as the same for prime suburban areas was the highest at approximately 14% due to un-leased concentration of Grade B stock. Suburban areas of Madhapur and Gachibowli witnessed vacancy of nearly 9% due to un-leased stock across Non-SEZ development. Outlook

Source: Cushman & Wakefield Research

Fresh office space supply in 2009 is expected to be nearly 5 million sq.ft. inclusive of nearly 3 million sq.ft. of IT SEZ developments, majority of which are scheduled for the first half of the year. This additional supply is likely to further increase the existing supply-demand gap resulting in increasing vacancy.

Average Rental Values Trend - Office Districts1 70 Rental Value (INR/sq.ft./month)

CBD, Off CBD and Prime Suburban micro markets witnessed annual rental growth largely due to the demand-supply mismatch coupled with limited Grade-A supply options. However, rental appreciation was prominent in the first half of the year with the second half witnessing a dip in select markets. Rentals in the suburban region including IT SEZ witnessed marginal correction in the last quarter in order to re-align with market expectations and excess supply built up. Pocharam, even while being an emerging peripheral micro market witnessed stable rentals as supply outstripped the demand with an obvious downward pressure on rentals and correction taking place in the office space segment.

60 50 40 30

Office space demand in 2009 will be similar to or even lesser than that of 2008 as the IT/ ITeS sector which was earlier growing at nearly 20 to 25% per annum will now be limited

20 10

CBD Suburban

Off CBD Peripheral I

4Q - 08

3Q - 08

2Q - 08

4Q - 07

1Q - 08

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

1Q - 06

4Q - 05

3Q - 05

2Q - 05

4Q - 04

1Q - 05

3Q - 04

2Q - 04

1Q - 04

4Q - 03

3Q - 03

2Q - 03

1Q - 03

0

Rental Cycle Rental Peak

Prime Suburban Peripheral II

4Q 2008

Source: Cushman & Wakefield Research

Office space demand declined by nearly 46% to register approximately 2.39 million sq.ft. in 2008 when compared to 4.47 million sq.ft. recorded in the previous year. Overall slowdown in the Indian economy at large and its immediate consequences on the domestic IT/ITeS sector were the primary attributes for depressed demand. Of the total demand of 2.39 million sq. ft. in the year 2008, absorption 1 Above rentals are for warm shell facilities (shell and core facility, power, high side air conditioning and 100% power backup)

Market Slowing

Market Recession

4Q 2009 (F)

Weakening Market

Strengthening Market

Market Recovery

Market Bottoming

Rental Trough

Source: Cushman & Wakefield Research

33

HYDERABAD MARKET OUTLOOK

On the other end of the spectrum, developers such as Bharat Infratech (Bharat Iconia), Lodha Developers (Lodha Bellezza), Radha Realty (U 31) and Emaar-MGF (Boulder Hills) etc. announced launch of ultra luxury residential projects in the second half of the year while a handful such as Janapriya Engineers Syndicate, Modi Properties and Manjeera Projects

34

8,000

25

7,000

20

6,000

15

5,000

10

4,000 5

3,000

0

2,000

-5

Low

High

Kukatpally

Madhapur Gachibowli

Begumpet Somajiguda

West & East Marredpally

Jubliee Hills

0

Himayatnagar

1,000

Annual Growth Rate (%)

Average Residential Capital Values - High End1

-10

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

4,500

10%

4,000

8%

3,500 6%

3,000 2,500

4%

2,000

2%

1,500

0%

1,000

Low

High

Kukatpally

Madhapur Gachibowli

Begumpet Somajiguda

-4% West & East Marredpally

-2%

0 Himayatnagar

500

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Banjara Hills, Jubilee Hills and Himayathnagar registered marginal decline in average capital values by nearly 2% to stabilize at INR 3,800 and INR 2,800 per sq.ft. respectively. 1 Average high end values are for properties ranging from 1,600 to 3,250 sq.ft. 2 Average mid end values are for properties ranging from 1,200 to 1,600 sq.ft.

Annual Growth Rate (%)

Average Residential Capital Values - Mid End2

Jubliee Hills

With the global economic meltdown dampening overall sales prospects, several property developers in the city resorted to re-pricing of properties to boost sluggish sales and thereby expedite completion of projects with significant bookings by customers.Various projects set for completion during the year were deferred as developers faced liquidity issues. In certain cases, developers even delayed the launch of new projects anticipating passive response from buyers. This is primarily attributed to buyers shying away to make capital commitments given the uncertainties in the economy coupled with over heated property rates making them unaffordable. Fresh residential supply took a back seat as the prime concern with developers was to make prices affordable for a larger mass of potential buyers.

As the effect of slowdown was more pronounced during the second half of 2008, the changes in capital values during that time frame reflect the actual correction taking place in the market. During June to December 2008, average values eased between 7 to 11%. However, Banjara Hills and Jubilee Hills being the prime residential locations did not succumb to any negative correction during the second half of the year.

Banjara Hills

Few select precincts of the city witnessed development of gated communities comprising of villas and duplex houses. These regions include Kompally, Medchal Road, Dundigul, Yapral and Shamirpet in the north; Ghatkesar, Cherlapally, Nagole in the east, Tellapur in the west; Qutbullapur and Bachupally in north-west as well as Shamshabad, Kothur and Sri Sailam Road in south of Hyderabad. However, currently most of these regions lack adequate social infrastructure and therefore witnessed a sluggish response from end users.

Average capital values for high-end properties witnessed lesser impact despite the slump and overall decrease in residential demand. As of December 2008, annual appreciation in capital values was estimated between 9 to 20% barring Himayathnagar and West and East Marredpally where average values declined by 3% and 5% respectively over the previous year.

Banjara Hills

Established residential micro markets of Jubilee Hills, Banjara Hills, Srinagar Colony, Somajiguda, Punjagutta, Himayathnagar, Begumpet, Marredpally and Sainikpuri etc. witnessed midsegment standalone apartment projects through the year 2008. However, limited land availability for new developments within the city led to large scale developments taking place in suburban and peripheral regions of the city. Apart from scattered standalone apartment projects by local developers, planned apartment projects were visible in Andhra Pradesh Police Academy (APPA) Junction in south-west, Kukatpally in north-west, Nagole, LB Nagar in east; Kondapur, Gachibowli and Nallagandla in west and ECIL X Road in north-east to name a few.

Capital Values

Capital Values (INR/sq.ft.)

RESIDENTIAL

etc. focused on affordable housing. National developers such as DLF Homes and Bangalore based Mantri developers to name a few announced launch of apartment projects in the city but are yet to start construction activities.

Capital Values (INR/sq.ft.)

to 10 to 15%. Madhapur and Gachibowli will continue to remain as preferred IT/ ITeS region over the other micro markets due to comparatively low occupancy cost and availability of Grade A supply. Rentals across all micro markets inclusive of SEZ rentals are expected to see further correction by first half of 2009, with stabilization likely in select regions in the second half. Some of the precommitments as well already committed space may also get vacant with companies preferring just-in time deals rather than holding large vacant spaces like they use to do earlier.

HYDERABAD MARKET OUTLOOK Average values in West & East Marredpally, Madhapur as well as Gachibowli stabilized at last year's values.

of 13% followed by Madhapur and Gachibowli each witnessing negative 2% correction.

Rental Values

Outlook

Lack of fresh supply coupled with buoyant demand for highend residential properties across Banjara Hills and Jubilee Hills led to average rentals hardening by 70% and 56% respectively over the last 12 months. These two premium residential locations have high concentration of independent villas, duplex houses and luxury apartments. The demand for properties in these regions being insulated to the economic slump witnessed rise in rentals. Begumpet and Somajiguda witnessed 45% annual appreciation mostly due to supply lagging demand. Himayathnagar was the only location that witnessed correction in rentals of high end properties by 7% over the similar time frame.

Residential activities including new developments are expected to be concentrated in the suburban and peripheral areas of the city due to the obvious reason like scarcity of land parcels in the central areas. On account of fewer new job prospects and curtailed spending both by individuals and corporate, demand for residential properties will continue to be passive. This situation is likely to force select residential developers to follow distress sale route.

1

80

160,000

70

140,000

60

120,000

50 40

100,000

30

80,000

20

60,000

10

Low

High

Kukatpally

Madhapur Gachibowli

Begumpet Somajiguda

-20 West & East Marredpally

-10

0 Himayatnagar

0

20,000 Jubliee Hills

40,000

Annual Growth Rate (%)

180,000

Banjara Hills

Rental Values (INR/month)

Average Residential Rental Values - High End

Regulatory measures such as reduction in home loan rates both by the government owned financial institutions and private banks etc. are expected to help in reviving the demand. Recent proposal by the Government of Andhra Pradesh to exempt the stamp duty (5%) and applicability of only registration fee (2.5%) on new apartments up to 1,200 sq.ft. starting from January 2009 till December 2010 is a positive move in favour of end users. As a last resort to revive demand, selling at minimal margin is expected to spread amongst certain group of developers, although this initiative has already been adopted by few. In this process, buyers looking for budget and mid-segment residential properties can achieve savings on the first offer itself. RETAIL

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Mall Development 2

0%

10,000

-5%

5,000

-10%

0

-15% Himayatnagar

High

Mall Supply Trend 5.00

Annual Growth Rate (%)

4.00 Area (million sq.ft.)

Low

Annual Growth Rate (%)

5%

15,000

Mall stock in the city was recorded at approximately 550,000 sq.ft. by the end of 2008. Ashoka Metropolitan mall at Banjara Hills Road No.1 getting operational during first quarter of 2008 added approximately 150,000 sq.ft. to the retail mall stock. Mall rentals in Banjara Hills Road No.1 and Himayathnagar witnessed downward correction by 20% and 4% respectively over the previous year as it reached high price

Kukatpally

20,000

Madhapur Gachibowli

10%

Begumpet Somajiguda

25,000

West & East Marredpally

15%

Jubliee Hills

30,000

Banjara Hills

Rental Values (INR/month)

Average Residential Rental Values - Mid End

Source: Cushman & Wakefield Research

Average rentals in the mid-segment started weakening mostly in the second half of 2008. Banjara Hills and Jubilee Hills, Begumpet & Somajiguda as well as Kukatpally witnessed annual rental increment of 2%, 11% and 8% respectively due to sustained activity in the existing stock. However, it is interesting to note that during the second half of 2008, these locations saw a decline in rental growth between 7 to 15% due to obvious slowdown in the demand from end users. Average mid end rentals in Himayathnagar being already overheated saw maximum negative correction to the extent

3.00

2.00

1.00

0.00 2006

2007

2008

2009 (F)

2010 (F)

Year

Source: Cushman & Wakefield Research 1 2

Average high end values are for properties ranging from 1,600 to 3,250 sq.ft. Average mid end values are for properties ranging from 1,200 to 1,600 sq.ft.

35

HYDERABAD MARKET OUTLOOK Somajiguda witnessed organized retail activities primarily from apparel, lifestyle retail brands and consumer durables segment.

Average Mall Rental Trend 250

Main street rentals dipped across most micro markets between 12-29% over the previous year. However, during the same timeframe Raj Bhavan Road, Somajiguda and Jubilee Hills saw a slower rate of depreciation with a correction of 3-6% due to non-availability of properties.

INR/Sq.ft./Month

200

150

100

50

0

Q1-07

Q2-07

Q3-07

Q4-07

Q1-08

Q2-08

Himayathnagar

NTR Gardens

Q3-08

Q4-08

Banjara Hills, Rd No.1

Source: Cushman & Wakefield Research

points not matching expectations. With the apparent softening of demand, mall supply witnessed a set back as two planned mall projects, one each in Himayathnagar and Banjara Hills Road No.1 earlier scheduled to be operational by end of 2008, were deferred to 2009. The latter witnessed pre-lease commitments from leading international brands, mostly in the apparel segment. Mall vacancy stagnated at approximately 5% by end of 2008 as compared to nearly 18% during 1Q of 2008. Space availability in Ashoka Metropolitan Mall which was subsequently leased to various retailers led to the overall high vacancy during in 1Q of 08. Main Street Development The city's retail market witnessed preference for main streets due to better visibility for the brands coupled with minimal retail space in malls. Prominent main streets such as Jubilee Hills Road No. 36, Banjara Hills Road No. 12, Begumpet and

Rental Values (inr/sq.ft./month)

250 250 250 250 250 200 150 100 50 0 1Q-07

2Q-07

3Q-07

4Q-07

Source: Cushman & Wakefield Research

36

1Q-08

S.P Road/ Begumpet Abids Ameerpet A S Rao Nagar

2Q-08

Outlook Hyderabad is set to witness planned mall development of approximately 1.2 million sq.ft. in 2009 spread across three malls in Banjara Hills Road No.1, Himayathnagar and Madhapur/ Hitec City. Rentals across select malls and main streets are expected to witness further correction between 5 to 10% by first half of 2009 given their susceptibility to demand slowdown and additional retail space infusion.Various mall developers who anticipated project completion in the next two years may face execution risk due to the liquidity crunch leading to further delay in their schedules. Revenue sharing between mall developers and tenants, although not yet a prominent trend in Hyderabad, may see the light of day in 2009. Existing tenants in main streets are in a better position to re-negotiate rentals with landlords as demand remains low. Unlike all the existing main streets where new supply is scarce, Jubilee Hills Road No. 36 looks promising as this location is expected to be supply heavy. This is evident from the numerous standalone properties which are under various stages of completion along the 4 kilometres stretch starting from Jubilee Hills check post till Kavuri Hills. Retailers dealing with apparel, electronics and consumer goods are committed to the standalone stores. Other main streets are likely to witness moderate activities as new supply is likely to be very limited.

Average Main Street Rental Trend

M.G Road Banjara Hills Punjagutta Kukatpally

Luxury car makers like BMW, Audi,Volkswagen and Volvo etc. established their presence along main streets of Raj Bhavan Road, Banjara Hills and Jubilee Hills, while entry of international luxury brands was very minimal. Hypermarket format stores such as Reliance Mart and SPAR getting operational during the second half of the year established consumer preference for such stores in Hyderabad.

3Q-08

4Q-08

Raj Bhavan Road/ Somajiguda Himayathnagar Jubilee Hills Madhapur

Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

KOLKATA MARKET OUTLOOK Liluah

South Dum Dum

Paikpara

Rajarhat

Shalkiya Mail Panchghara

Ultadanga

Beniatola

Salt Lake Narkeldanga

Shibpur

Kankurgachi

KOLKATA Bow Bazaar

Beleghata Kulia

Shalimar

Hooghly River

Par kS

Tangra tree

t

Gobra Garden Reach

Dhapa Bhawanipur Mominpur

Rajarhat Gopalpur

Topsia Ballygunge

Alipore

Tiljala

Nature Park Kasba

Kalighat Taratala Garfa

Haltu

Behala Tollygunge

Santoshpur

Royal Calcutta Golf Club

Paschim Darisha

Purba Darisha

Bijoygarh

Kazipara

Baishnabghata Patuli Township

Naktala

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL The total office space supply in Kolkata was recorded at 1.97 million sq.ft in 2008, which was lower by 10% than the supply received in 2007 of approximately 2.2 million sq.ft. Almost 89% of the supply in 2008 was concentrated in the peripheral locations, with Salt Lake accounting for 48%, followed by Rajarhat at 41%. Dalhousie and Park Circus Connector witnessed no new supply in 2008 while CBD registered around 10 % of the total supply.

Of the entire supply delivered in the year , IT SEZ accounted for 40% of the supply at approximately 790,000 sq.ft which was entirely concentrated in Rajarhat. Salt Lake accounted for the entire IT/ITeS (non SEZ) supply at approximately 606,000 sq.ft. During 1Q 2008, the supply was concentrated entirely in Rajarhat while Salt Lake and CBD dominated the supply scenario in 2Q 2008. In 3Q 2008, all major micro markets baring Dalhousie and Park Circus Connector witnessed infusion of fresh supply. The peripheral locations of Salt Lake and Rajarhat accounted for the entire supply in 4Q 2008. The

Annual Office Supply Supply -- 2008 2008

Sectorwise Absorption Trend - 2008 4%

29%

13%

40%

18%

61%

4%

31% IT

Source: Cushman & Wakefield Research

Non-IT

IT-SEZ

Automotive

Others

IT/ITeS

BFSI

Telecommunication

Source: Cushman & Wakefield Research

37

KOLKATA MARKET OUTLOOK city was witness to significant supply in the commercial space segment in 2008. Salt Lake registered the highest commercial space supply at 343,000 sq.ft primarily on account of substantial demand from corporates for high quality office space in the location while CBD followed with supply at 200,000 sq.ft in the segment. Supply fell short by over 50% than the projected supply of 4.2 million sq.ft in the beginning of 2008. This was primarily due to deferment of a number of significant projects in wake of global economic crisis contracting the demand scenario in the city.

sq.ft. concentrated entirely in the peripheral locations. Rajarhat witnessed almost 84% of the pre-commitments primarily due to higher quality of supply and considerably lower rentals in comparison to other micro markets. The city was witness to about 63% decline in absorption at 780,000 sq.ft in 2008 as against 2007; attributable to the recessionary conditions of the economy as major corporate houses shelved their expansion plans during the last two quarters of the year. Absorptions included 63,000 sq.ft of pre-commitment of earlier years.

The city recorded total demand of approximately 1.8 million sq.ft during 2008 primarily driven by the IT/ITeS segment comprising of pre-commitments of approximately 1.09 million

IT/ITeS sector accounted for 62% of the total absorptions in 2008. The first and last quarter of 2008 witnessed maximum absorptions in the IT/ITeS segment. During 1Q 2008, almost 51% of the new supply delivered was absorbed; with Rajarhat dominating the absorptions. In the second and third quarter of 2008, entire absorption was in the commercial office space segment. In 2008, Salt Lake saw maximum absorption in the commercial office space. Prime CBD locations and Dalhousie witnessed almost 67% of the absorptions during 2Q 2008. A key feature was that most of the absorption was on the existing vacant space available.

Supply, Absorption and Vacancy Trends 12 10

2.00

Vacancy Rate (%)

Area (million sq.ft.)

2.50

8 1.50 6 1.00 4 0.50

The overall vacancy levels across the city increased considerably from 6% in the beginning of the year to 11% by the end of 2008. Only 24% of the new supply delivered was absorbed in 2008. Peripheral locations recorded the highest vacancy levels escalating from 8% at the beginning of the year to 18% by the end of 2008. This was primarily on account of infusion of fresh supply in the micro markets and the new supply remaining unabsorbed.Vacancy rates in CBD however, remained below 4% due to limited new supply in the micro market.

2 0

0.00 2003

2004

2005

Supply

2006

Absorption

2007

2008

Vacancy Rate (%)

Source: Cushman & Wakefield Research

120

20

100

15 Growth Rate (%)

10

80

5 60 0 40

-5

-15

Rajarhat2

Rash Behari Connector (Ruby)

Park Circus Connector (Topsia)

Dec 2007

Salt Lake2

-10

0

Dalhousie Square

20

Park Street/ Camac Street

Rental Values (inr/sq.ft./month)

Average Rental Values - Office Districts1

Dec 2008

Growth Rate (%)

Source: Cushman & Wakefield Research 1

Average Rental Values Trend - Office Districts Rental Values (INR/sq.ft./month)

140 120 100 80 60 40 20

Dalhousie Square Rash Behari Connector (Ruby)

Source: Cushman & Wakefield Research

Salt Lake 2 Rajarhat

4Q - 08

3Q - 08

2Q - 08

1Q - 08

4Q - 07

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

1Q - 06

4Q - 05

3Q - 05

2Q - 05

4Q - 04

Park Street / Camac Street Park Circus (Topsia)

1Q - 05

3Q - 04

2Q - 04

1Q - 04

4Q - 03

3Q - 03

2Q - 03

1Q - 03

0

38

Pursuant to the general slowdown in the economy, Kolkata witnessed significant correction in the rental values across almost all micro-markets by the end of 2008. During 1Q 2008, only Park Street and Rajarhat witnessed an increase in the rentals. Rentals stabilized in 2Q 2008 baring a marginal rise in CBD locations and Dalhousie due to the buoyancy in demand for corporate office space in the region. The peripheral locations witnessed a correction in 3Q 2008 on account of increasing vacancy while CBD, along with Rash Behari Connector and Dalhousie continued their northward trend attributable to the demand from the corporates. However, by 4Q 2008 CBD and Dalhousie registered a double digit decline while Park Circus Connector and Rash Behari Connector registered decline in the range of 4-5% , primarily due to the limited new supply in the offing. Rajarhat and Salt Lake continued with their trend of rental correction attributable to the rising levels of vacancy.

2

1 Average rentals are for bareshell facilities 2 Rentals are for warm shell facilities (shell and core facility, power, high side air conditioning and 100% power backup)

KOLKATA MARKET OUTLOOK Outlook The projected office space supply for 2009 is expected to be approximately 2.5 million sq.ft., a substantial part of which is deferred supply from 2008. Most of the upcoming supply will be concentrated in the peripheral locations of Salt Lake and Rajarhat. Of the total expected supply, approximately 1 million sq. ft. will be in SEZs. Deferred supply of 2008 will constitute majority of the supply in 2009. Salt Lake and Rajarhat are expected to witness higher vacancy levels as well as further correction in the rentals as few major projects are lined up for delivery by the second quarter of 2009. E.M. Bypass and Park Circus Connector too may witness a fall in rental values as couple of mixed-use developments are anticipated to infuse new supply in these micro-markets. Kolkata market is likely to see a mixed trend in demand comprising of both IT/ITeS and commercial office space. The city is likely to witness precommitments of approximately 1 million sq.ft turning to absorptions in 2009. With the prevalent economic conditions, new requirements from IT/ITeS sector, which has been the key demand driver, is expected to be slow and thus impacting the demand for new office space supply. But with major IT/ITeS pre-commitments of 2008 expected to get absorbed, the share of the IT/ITeS segment will still surpass demand for commercial office space in 2009. Rental Cycle

Newer locations were characterised by substantial number of projects in the mid range segment. Certain micro markets mainly in the prime residential pockets also observed redevelopment of properties. However, the city at large, witnessed limited number of projects being delivered in 2008. A few mega-townships projects were observed being shelved or deferred while certain others saw projects size being trimmed down in wake of the prevalent conditions. Capital Values Capital values in Kolkata witnessed minor changes during the year remaining largely stable across most micro-market in both the segments. Kolkata market exhibited least panic sales in wake of the economic slowdown. Towards the end of 2008, a slight decline was observed in the locations of Ballygunge, Alipore Road, Rajarhat and south Kolkata markets. Mid-range housing characterised by end-users preferred to hold on to their assets thus reducing any major fluctuations barring a minor decline in south Kolkata. The high end segment recorded a minor decline on account of few investors seeking disposal of their investments.

4Q 2008 1

Average Residential Capital Values - High End

Weakening Market

Strengthening Market

Market Recovery

Market Bottoming

25

10,000

20 8,000

15 10

6,000

5

4,000

0 2,000

-5 -10

Low

High

Rajarhat

Salt Lake

Lansdowne, Park Street

Alipre Park Rd, Ashoka Rd, Belvedere Rd

Source: Cushman & Wakefield Research

EM Bypass

Rental Trough

Ballygunge Queen Park, Rainy Park Gurusday Rd

Southern Avenue, Dover Lane

0

Annual Growth Rate (%)

RESIDENTIAL

Source: Cushman & Wakefield Research

Kolkata residential market exhibited a largely stable position during 2008. The market was least prone to any major fluctuations and was characterised by thoughtful and cautious approach. Investors showed an inclination to exit the investments. With the global slump, funding from financial institutions was constricted to a certain extent leading to lesser demand for residential properties. An anticipation of further correction in the prices too has restrained demand from end users and investors alike both in the mid-range and high end segment.

Residential Source: CushmanAverage & Wakefield ResearchCapital Values - Mid End

2

18 16

5,000

14 4,000

12 10

3,000

8 2,000

6 4

1,000

Low

High

Kakurgachi, Lake Town, Jessore Rd, Jltadanga

Rajarhat

2 EM Bypass

0

Hindustan Park

Capital Values (INR/sq.ft.)

6,000

New Alipore, Golf Green, Tollygunj

Kolkata, over the last few years has seen an increased interest from corporate to set up offices herein bringing in a flock of senior and middle management to the city. It has further accentuated the emergence of newer locations like EM Bypass and Rajarhat and outer peripheries of Kolkata district etc.

Annual Growth Rate (%)

Market Recession

Capital Values (INR/sq.ft.)

Market Slowing

30

12,000

4Q 2009(F)

Annual Growth Rate (%)

Rental Peak

which have come up as new residential hubs in addition to south Kolkata. However the infrastructural complexities have slowed down the pace as well as the attractiveness of the projects in the new locations especially in Rajarhat to some extent.

0

Annual Growth Rate (%)

Source: Cushman & Wakefield Research 1 Average high end values are for properties above 3,000 sq.ft. 2 Average mid end values are for properties below 2,000 sq.ft.

39

KOLKATA MARKET OUTLOOK Rental Values Rentals values in Kolkata witnessed mild fluctuations during the first three quarters of 2008 across all micro-markets in the high-end segment. The mid range segment remained stable due to buoyant demand and also due to the fact that this segment is price sensitive and could have been negatively impacted incase of any increase in rental values. Thus in a deliberate attempt to ensure healthy demand, landlords largely maintained their rental values at the existing rates. However, high end segment witnessed major drop ranging from 4- 22% in rental values over a single quarter during 4Q 2008. Least change was observed in the south east Kolkata (EM Bypass) across all quarters and segments during the year. This was primarily due to its proximity to the major business districts and easy connectivity in addition to high-quality projects.

residential pockets are unlikely to witness any major fluctuations as opposed to the trend observed during the fourth quarter of the year. Outlook The rental and capital values in prime residential locations are likely to remain stable over next few months largely due to continued demand at the current values. With overall market sentiments trickling into the Kolkata market, the propensity of the lessee to lease at higher values is limited thereby bringing in stabilisation in values. However, emerging locations and new projects may see some corrections in the prices owing to the present economic slowdown lessening the pace and quantum of transaction activities in the market. The market is unlikely to witness new project launches until it regains its lost confidence; new projects even if launched are likely to be more oriented towards affordable housing.

25

120,000

20 15

100,000

10

80,000

5 60,000 0 40,000

-5

High

Rajarhat

Salt Lake

Lansdowne, Park Street

Mall Supply Trend 3.50 3.00

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

40,000

140

35,000

120

30,000

100

2.50 2.00 1.50 1.00

25,000

80

20,000 60

15,000

40

10,000

20

5,000

Annual Growth Rate (%)

0.50 0.00 2007

High

Kakurgachi, Lake Town, Jessore Rd, Ultadanga

Rajarhat

EM Bypass

Hindustan Park

New Alipore, Golf Green, Tollygunj

Low

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

North east Kolkata particularly Rajarhat was expected to change the dynamics of residential market in Kolkata but it failed to make any significant impact on account of infrastructural problems posing impediments with a number of projects both in the construction stage and those delivered facing serious hurdles. It has led to a decline in the rentals and is likely to see further decline probably in the end-user driven mid range segment. Ballygunge, Gurusaday Road, Alipore Road, Ashoka Road and Belvedere Road which have been quoting highest rentals on account of their positioning as traditional

2009 (F)

2010 (F)

Source: Cushman & Wakefield Research

0

0

2008

Year

Average Mall Rental Trend 550 500 Rental Values (INR/sq.ft./month)

Rental Values (INR/month)

Average Residential Rental Values - Mid End2

40

The retail sector in Kolkata which demonstrated signs of revival in early 2008 with two major malls becoming operational witnessed no fresh mall supply in the second half of the year. Few major mall projects that were earlier expected to become operational during the year have now

Area (million sq.ft.)

Low

Alipre Park Rd, Ashoka Rd, Belvedere Rd

-15

EM Bypass

-10

0

Ballygunge Queen Park, Rainy Park Gurusday Rd

20,000

RETAIL Annual Growth Rate (%)

140,000

Southern Avenue, Dover Lane

Rental Values (INR/month)

Average Residential Rental Values - High End1

450 400 350 300 250 200 150 100 50 0 1Q-07

2Q-07

3Q-07

Salt Lake South Kolkata

4Q-07

1Q-08

2Q-08 Elgin Road Rajarhat

Source: Cushman & Wakefield Research 1 Average high end values are for properties above 3,000 sq.ft. 2 Average mid end values are for properties below 2,000 sq.ft.

3Q-08

4Q-08

KOLKATA MARKET OUTLOOK

Mall Development The city witnessed about 1.37 million sq.ft of new mall supply in 2008 which was entirely accounted for by two malls South City Mall in south Kolkata and Mani Square in EM Bypass that started operations in the first half of 2008. The South City Mall measuring approximately 1 million sq.ft became operational in the first quarter of the year and is the largest mall in Kolkata with retail giants such as Shoppers Stop, Pantaloons and Starmark as anchors. The mall houses other eminent brands as Lladro,Van Heusen, Next, Swarovski and Hidesign, etc. among others. Mall supply in Kolkata was projected at 3.9 million sq.ft at the beginning of 2008 but fell short by over 64%. By the third quarter of 2008, pursuant to the general economic conditions a number of projects were either shelved or deferred to later years. Over 70% of the deferred mall projects were in the micro-market of Rajarhat in anticipation of the potential catchments from a number of ongoing residential and commercial projects. But the slow pace of development in addition to the infrastructural impediments curtailed the attractiveness of Rajarhat as the next major retail destination in Kolkata. Few big retailers who had earlier committed substantial retail spaces in their upcoming mall projects exited their commitments in wake of the present conditions and deferment of the projects. The city also witnessed few mall projects across significant locations getting converted into mixed use developments with relatively less space assigned for retail developments attributable to the current economic conditions. Mall rentals in south Kolkata and Rajarhat during the first three quarters of 2008 maintained a northward trend. The presence of major retail brands and high occupancy was the prime determinant in the escalation of the rentals in South Kolkata; while Rajarhat gained on account of it's positioning as the next retail destination and comparatively lower rentals. Salt Lake and Elgin Road saw stabilisation in the rental values primarily on account of unavailability of vacant space. However by 4Q 2008, rental values across major micro markets barring Salt Lake registered a decline. The mall vacancy levels in the city stood at 5.59% at the end of 2008 with relatively reduced leasing activities during the fourth quarter. The market was also witness to retailers

renegotiating the rental values to cover on the rising operational costs. Main Street Development During 2008, the prominent main streets of Kolkata - Park Street, Camac Street, Elgin Road and Theatre Road witnessed restrained activities as compared to the malls. Retail rentals across the city's main streets remained stable over the first three quarters of 2008. By fourth quarter of 2008, a slight Average Main Street Rental Trend 300 Rental Values (INR/sq.ft./month)

been deferred and are slated for 2009 launch. In Kolkata market, the retailers have shown a preference for being present across the city's various malls. Retail rental values across the city's main streets stabilized during the first three quarters of 2008; however by the end of the year some corrections were observed in Park Street and Theatre Road.

250 200 150 100 50 0 1Q-07

2Q-07

3Q-07

4Q-07

1Q-08

Camac Street Theatre Road

2Q-08

3Q-08

4Q-08

Park Street Elgin Road

Source: Cushman & Wakefield Research

decline was registered in Park Street and Theatre Road with a few prominent properties remaining vacant in these locations largely due to the higher asking rates. The city's high streets lacked new space options as there was no re-development or new construction activity. Large format retailers showed preference for traditional markets like Gariahat but limited space and lack of quality infrastructure curtailed further activities in the micro-market. New locations like New Alipore, south Kolkata and Kankurgachi saw some activities due to factors like affordable real estate prices and established catchments. The year also saw some leasing activity off high streets with brands like Levi's, Reebok, Reliance Digital, etc opening their outlets in such locations. Outlook Kolkata is likely to witness further softening in rental values across both malls and main streets. Mall supply is expected to considerably come down from the earlier projections of 3.3 million sq.ft in 2009 as many developers are now converting their planned retail spaces to office spaces or have delayed the project. Most of the new mall supply in 2009 will comprise of deferred projects of 2008. Retail segments like value retail and discount format, food and beverage retail is expected to see more activity. Locations like Kankurgachi with lower rental values off the main streets with established catchments are expected to emerge as newer destinations.

Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

41

AHMEDABAD MARKET OUTLOOK Sardar Patel Ring Rd

Gota Chandkheda ONGC Ram Nagar

Chandlodia

Sardar Patel Ring Rd

Nirnay Nagar

GIDC Naroda

Acher Kuber Nagar

Hansol

Ranip

NH 59 Nava Naroda

Ghatlodia Sola

Megani Nagar

Shahibagh

Thaltej

Naranpura

Drive-in Rd

Prahlad Nagar

Jodhpur Village

Nicol

Saraspura

Law Garden

Odhav Rakhial Rd

Fatehpur Vejalpur

Makarba

AHMEDABAD Ashram Rd

G.

Satellite Rd

Thakkarbapa Nagar Hirawadi

Rd

Vastrapur

University Area

Kalapi Nagar

Haripura

Navrangpura

C.

S.G

Hig

hw

ay

Judges Bungalow

Vasana

Kankaria Lake

Paldi

Juhapura Vasana

CTM Laxmi Narayan Society

Chandola Lake

Sanand Hwy

Sardar Patel Ring Rd

Amraiwadi

Mani Nagar

Sarkhej Kankarai Isanpur Narol Sabarmati River

Amraiwadi

Mani Nagar Vatwa

NH 8

SH 4

Ahm eda bad

Ghodasar

CTM

Vad oda ra E xpr ess Hw y

SH 3

Lambha

Source: Cushman & Wakefield

Commercial

Retail

Residential

Micro Market

Micro Market

Micro Market

Maximum Rental Correction

Maximum Rental Correction

Maximum Value Correction High End

Maximum Rental Growth

Maximum Rental Growth

Maximum Value Growth High End

COMMERCIAL The total demand for commercial office space in Ahmedabad was recorded at 349,000 sq. ft. in 2008. With marginal pre commitments of 32,000 sq. ft., absorption (317,000 sq. ft.) accounted for approximately 91% of the total demand in 2008. The micro market of Sarkhej Gandhinagar Highway (S.G Road) witnessed the highest demand of the year at 186,900 sq. ft. followed by C.G Road (110,764 sq. ft.). Owing to the marginal supply and the current high rentals Ashram Road witnessed the least demand in 2008. Sector like Telecom and Communication (27%) and BFSI (26%) were the main demand drivers of commercial space in 2008. Pharmaceuticals recorded a demand of about 16% while sectors like IT/ITeS and infrastructure/ construction witnessed limited demand for corporate office space in 2008. In 2008 Ahmedabad witnessed fresh office supply of about 590,000 sq. ft. catering mainly to the non-IT sector. As compared to 2007, Ahmedabad witnessed a drop of 16% in total supply in 2008 due to delays in completion of certain on going projects. Supply was also sporadic in 2008

and was mainly concentrated in 2Q 2008 (51%) and 4Q 2008 (45%). Owing to the availability of land for development, suburban micro markets of Satellite Road ( 58%) and Sarkhej Gandhinagar Highway (11%) accounted for about 69 % of the total supply in 2008, while C.G Road made up for approximately 23% of the of the total supply in 2008. Traditionally a strong office space market, Ashram Road did not witness any significant new supply, due to limited opportunities for new commercial space development. Sectorwise Absorption Trend - 2008 14%

26%

27%

17% 16% BFSI

Infrastructure / Construction

Telecommunication

Others

Source: Cushman & Wakefield Research

42

Pharmaceuticals

AHMEDABAD MARKET OUTLOOK Owing to the significantly reduced supply, Ahmedabad witnessed an average vacancy of approximately 3-4% in 2008 which was marginally lower than the vacancy levels of 5-7% observed in 2007. With a few companies vacating premises and reduced leasing activity happening across Ashram Road, the micro market witnessed the highest vacancy of about 6%. Sarkhej Gandhinagar Highway and Satellite Road witnessed vacancy of approximately 4% followed by C.G Road which recorded the lowest vacancy of about 2%.

projects and even postponement in launch of a few new projects thus curtailing the entry of new supply in the first few months of 2009. Owing to the limited supply in the next 3-6 months, the rental and capital values across most micro markets are expected to remain stable over short to medium term. Rental Cycle Rental Peak

4Q 2008

30

30

25

25

20

20 15

15

10

10

5

0

0

Sarkhej Gandhinagar Highway

Ashram Road

2007

Satellite Road

5

2008

Market Slowing Growth Rate (%)

35

35

C.G Road

Rental Values (INR/sq.ft./month)

Average Rental Values - Office Districts1 40

Weakening Market

Strengthening Market

Market Recovery

Market Bottoming

Rental Trough

4Q 2009 (F)

Source: Cushman & Wakefield Research

Sarkhej Gandhinagar Highway is expected to be an active commercial corridor of the city due to its accessibility to several planned SEZs, Gujarat International Finance Tech City (GIFT) and Industrial Parks such as Sanand. Sarkhej Gandhinagar Highway along with Satellite Road will be witnessing development of commercial buildings with no retail component which is expected to command a premium over other mixed use developments.

Growth Rate (%)

Source: Cushman & Wakefield Research

Average Rental Values Trend - Office Districts1 100 Rental Values (INR/sq.ft./month)

Market Recession

80 60 40

RESIDENTIAL 20

C. G. Road

Sarkhej-Gandhinagar Highway

Ashram Road

Satellite Road

4Q - 08

3Q - 08

2Q - 08

1Q - 08

4Q - 07

3Q - 07

2Q - 07

4Q - 06

1Q - 07

3Q - 06

2Q - 06

1Q - 06

4Q - 05

3Q - 05

2Q - 05

4Q - 04

1Q - 05

3Q - 04

2Q - 04

1Q - 04

4Q - 03

3Q - 03

2Q - 03

1Q - 03

0

Source: Cushman & Wakefield Research

Ahmedabad witnessed consistent growth in rental values across most micro markets for first three quarters of 2008 and reached a record high in 3Q 2008. However with sufficient supply meeting the current demand, rental values stabilized across all micro markets in 4Q 2008. With majority of new developments in micro markets of Sarkhej Gandhinagar Highway and Satellite Road offering larger floor plates and other amenities such as ample parking space which was not seen in the earlier developments, these micro markets witnessed highest year-on-year appreciation of 27% followed by C.G Road witnessing a 23% increase in rental values over 2007.

Historically the Ahmedabad residential sector has been dominated by independent row houses and villas. However the trend is now changing with a number of mid and high range apartments being planned and developed in micro markets of western Ahmedabad such as Satellite Road, Prahlad Nagar, Judges Bungalow and Vastrapur. Due to limited availability of land in central locations such as C.G Road and Ashram Road, supply was mainly concentrated in suburban micro markets such as Satellite Road and Prahlad Nagar. In 2008, Ahmedabad witnessed subdued demand owing to a wait and watch policy adopted by end users. Locations such as Gujarat High Court, Thaltej, Gota, Ghatlodia and Sola have emerged as new residential destinations catering to mid and high segment. These locations are expected to witness an increase in residential developments in 2009 due to their proximity to Sarkhej Gandhinagar Highway, Sardar Patel Ring Road, proposed SEZs, upcoming IT Parks and Gujarat International Finance Tech (GIFT) City along with other amenities like educational institutes.

Outlook In the wake of current economic slowdown which has significantly reduced demand for office spaces Ahmedabad is likely to witness delays in completion of certain ongoing 1 Average rentals are for bareshell facilities

Capital Values In 2008 Ahmedabad residential market witnessed softening of capital values for both high and mid end properties due to a slowdown in demand which was primarily driven by end users.

43

AHMEDABAD MARKET OUTLOOK Outlook 0 -2

2,500

-4 2,000

-6

1,500

-8 -10

1,000

-12 500

Low

High

Mani Nagar

Judges Bungalow

Vastrapur

Navrangpura

Satellite Road

-14 Nagar

0

Annual Growth Rate (%)

Capital Values (INR/sq.ft.)

3,000

-16

Annual Growth Rate (%)

Source: Cushman & Wakefield Research

Investor activity which was largely confined in western Ahmedabad also subsided in the second half of 2008 due to curtailed availability of funds. Navrangpura and Vastrapur witnessed highest drop in capital values across high end residential properties due to increasing preference of end users towards new residential developments in Prahlad Nagar and Satellite Road. However a conservative approach and postponement of purchase decisions by end users has forced developers to offer discounts and freebees. Rental Values Since capital values appreciated by about 2-3 times over the last few years and investors looked to maintain their returns, an increase in rental values across all micro markets of Ahmedabad was witnessed in 2008. Decrease in affordability of end users due to significant high interest rates has also led to increase in demand for rental accommodation. As compared to eastern Ahmedabad, micro markets in western Ahmedabad commands higher rental values due to their proximity to offices and improved social and physical infrastructure. Proximity to commercial and retail hubs such as Sarkhej Gandhinagar Highway and Satellite Road led micro markets of Satellite Road, Judges Bungalow,Vastrapur and Prahlad Nagar to witness highest rental appreciation across high end residential properties.

With developers postponing their projects as a result of limited availability of funds, Ahmedabad is expected to witness marginal supply in short to medium term leading to stabilization in capital values in next 3-6 months. However rental values are also expected to remain stable in next 3-6 months. Upcoming locations of Naroda, Nikol and Gota are likely to witness spurt in demand due to their proximity to infrastructural developments such as Bus Rapid Transit System (BRTS) and Mass Rapid Transit System (MRTS). A few integrated townships by local and national developers have been proposed in peripheral locations of Ahmedabad such as Sanathal, Dantali and Sardar Patel Ring Road which are expected to add more supply of mid and high end properties in Ahmedabad in near future. RETAIL Organized retail in Ahmedabad is primarily concentrated in western parts of the city in locations such as C.G Road, Sarkhej Gandhinagar Highway, Satellite Road and Drive-in Road. In 2008 main streets witnessed higher leasing activity as compared to malls with C.G Road being the most active and sought after main street in Ahmedabad. An overall slowdown in consumer spend has resulted in a drop in sales which has forced many retailers in the city to either reconsider their expansion plans or reduce new or previously committed space Mall Supply Trend 1.4 1.2

Area (million sq.ft.)

Average Residential Capital Values - High End1

1 0.8 0.6 0.4 0.2 0 2006

2007

2008

2009 (F)

2010 (F)

Year

Average Residential Rental Values - High End1

Source: Cushman & Wakefield Research

20,000

30

20

12,000 10,000

15

8,000 10

6,000 4,000

5

Dec 2007

Dec 2008

Mani Nagar

Judges Bungalow

Vastrapur

Navrangpura

0

Satellite Road

2,000 0

200

100

0

Growth Rate (%)

Source: Cushman & Wakefield Research

1 Average high end values are for properties ranging from 1,500 to 4,000 sq.ft.

44

300

Rental Values )INR/sq.ft./month)

14,000

Average Mall Rental Trend Annual Growth Rate (%)

25

16,000

Nagar

Capital Values (INR/month)

18,000

Q1-07

Q2-07

Q3-07

Q4-07

Vastrapur Drive-in Road

Source: Cushman & Wakefield Research

Q1-08

Q2-08

Q3-08

SG Highway Kankaria Lake

Q4-08

AHMEDABAD MARKET OUTLOOK

Mall Development Ahmedabad saw the commencement of two malls in 2008 which were mostly concentrated in micro markets of Sarkhej Gandhinagar Highway (350,000 sq.ft.) and Satellite Road (220,000 sq.ft.) adding 570,000 sq. ft. of mall space, taking the total mall stock of the city to 2.63 million sq.ft. However, as compared to 2007, Ahmedabad witnessed significantly reduced mall supply in 2008. Two other malls with a total retail space of approximately 650,000 sq. ft. are expected to get operational in first half of 2009. Sarkhej Gandhinagar Highway, with about 77% of the total upcoming mall development in 2009, is expected to remain an active retail corridor of the city. Ahmedabad is expected to witness small and mid format mall supply in 2009. After witnessing stability in the first half, Ahmedabad observed a drop in mall rental values across all micro markets in second half of 2008. Lower than expected revenues, disproportionately higher occupancy cost and poor conversions forced retailers/brands re - look at their portfolio leading to many retailers canceling or downsizing their space requirements and thus adding to higher vacancies of about 15-40% in the few existing malls in the city. Micro market of Sarkhej Gandhinagar Highway witnessed the highest vacancy of about 40% followed by Kankaria Lake (35%) and Drive-in Road and Satellite Road (15%). Owing to limited leasing activity and high vacancy of about 35% in the operational mall, micro market of Kankaria Lake witnessed highest year-onyear decline of about 30% followed by Sarkhej Gandhinagar Highway observing a drop of about 21% in rental values over a single year. Main Street Development C.G Road continues to be the most active and sought after main streets in Ahmedabad and was preferred by retailers for

Average Main Street Rental Trend 200

Rental Values (INR/sq.ft./month)

take up. In the last 4 quarters, rental values have gone down by approximately 6-26% across main streets and about 1630% across malls.

150

100

50

0 Q1-07

Q2-07

Q3-07

Q4-07

Q1-08

Q2-08

Q3-08

CG Road

Law Garden

Satellite Road

SG Highway

Q4-08

Source: Cushman & Wakefield Research

exclusive brand outlets over other main street locations and malls. Reduced demand for retail space due to cautious expansion strategy by the retailers impacted main street rental values in Ahmedabad with all micro markets registering a decline in rental values in 2008. Satellite Road witnessed the highest year-on-year decline of about 26% followed by Law garden (19%). Even though C.G Road remained an active main street location in the city, it witnessed softening of rental values by approximately 14%. Sarkhej Gandhinagar highway witnessed lowest year-on-year decline of 6% in rental values which could be attributed to city's development pattern towards western region, availability of large floor plates and proximity to upcoming commercial and residential developments. Outlook With retailers postponing their expansion plans in wake of consolidating and correcting their portfolio, Ahmedabad is expected to witness a slowdown in leasing activity in next 3-6 months. The upcoming mall supply coupled with changes and realignment in retailers' outlook are likely to put further pressure on mall rental values leading to further decline of rental values in short to medium term. However C.G Road and Sarkhej Gandhinagar Highway are expected to witness some leasing activity in short to mid term.

Note : l The rental values indicated are base rents and do not include interest cost of security deposit, maintenance charges and other such outgoings. l Average rentals are for ground floor premises on carpet area

45

END NOTES According to a Cushman & Wakefield report on the economy and its impact on real estate, the good news for Asia is that growth is still expected to do better than in previous downturns experienced by the region. The big Asian economies of China and India are forecast to grow at 8.5% and 6.3% respectively, compared to sub-zero growth in the USA and EU. In addition, domestic demand from the two and a half billion consumers of Asia's two strongest emerging economies will help support intra-regional Asian trade even in such dismal times. Governments and international institutions have put in place mechanisms to try to prevent the transmission of the crisis from the advanced economies into Asia. Though it is too soon yet to indicate its success, the great advantage Asia has is that its governments have sufficient reserves and surpluses and are better placed to survive the turmoil than emerging markets in other regions. As investment markets become more liquid, Asia will be well placed to benefit from that investment and will continue to be a great place to hold real estate assets. At present even though real estate deals are somewhat slow, as markets start to ease, economic conditions combined with government reserves available for stimulus packages should continue to make Asia attractive for investments. Though not on the massive scale of the Chinese government, but the Indian government too introduced several fiscal and stimulus packages. Since October 2008 the Reserve Bank of India (RBI) had been taking several steps to lower interest rates in a bid to revive market conditions. But with banks treating the real estate sector with extreme caution, a plunging consumer confidence index and crashing valuations, the resources of both developers and funds are limited, leading to frozen projects and staggered/aborted expansion plans. The hardest hit, are the small and medium-ticket players. As a stimulus package for the sector (and to help the rollover of existing debt), industry bodies such as the National Real Estate Development Council (NAREDCO) and the Confederation of Real Estate Developers' Associations of India (CREDAI) had appealed to the Government to ease FDI and ECB norms as well as to formulate fresh policies for rescheduling term/ construction loans. As part of the first stimulus package announced by the Government in December 2008, the RE sector was allowed special treatment by banks, while the housing sector was accorded priority sector status in a move to trigger demand. An additional INR 20,000 crore was pumped into the current fiscal as incentives for sectors like infrastructure, housing, textiles and exports. What the first stimulus package spelt for the RE sector

Priority sector status for low-value loans ? Restructuring of loans for commercial RE projects ? ? Excise duty cuts on construction costs like steel and cement

46

Despite positive intentions, these measures failed to create any immediate impact on the sector, save lowered construction costs. For starters, a more pro-active role was expected from banks as far as instantaneous sanctioning of affordable housing loans was concerned. To strengthen the credit/fiscal front of the economy the Centre is expected to announce its second stimulus package in early January 2009. At the end of the day, till these measures get translated from the drawing board on to the marketplace, it is really too early to assess the impact of such stimulus packages on the realty sector in the short to medium term. India Realty Confidence Index 2008 The slowdown in the Indian economy along with restrained availability of funds and reducing demand across all sectors (commercial, retail and residential) have taken a toll on confidence levels of developers, financial institutions and end users alike. Stakeholders' confidence nosedived in 2H 2008, particularly for major cities like Mumbai and NCR, which witnessed subdued demand for commercial office space during the period, coupled with large upcoming supply and increasing vacancies. The drop in confidence level was comparatively lower in cities like Hyderabad, Pune and Bangalore. This can be attributed to developers anticipating an upswing in demand, particularly for residential space over the next six months as a fall out of lowering home loan interest rates. Real Estate Confidence Index - 2008 -20

-10

0

10

20 30

-30

40

-40

50

-50

60

-60 -70

70 80

-80 -90

90 100

-100 NCR Pune

Mumbai Chennai

Hyderabad Ahmedabad

Kolkata Bangalore

Source: Cushman & Wakefield Research

City Confidence Index 4Q 2008

NCR

H1 2009 Mumbai Hyderabad Pune Chennai Ahmedabad Bangalore 0

10

20

30

40

50

Confidence Index (%)

Source: Cushman & Wakefield Research

60

70

80

90

100

END NOTES Drop in confidence levels have resulted in developers postponing launch of new projects and focusing on reducing their current inventory; while financial institutions have adopted a cautious approach in investing in upcoming real estate projects. In spite of several fiscal measures being undertaken by the RBI and central government to stimulate demand, real estate stakeholders are likely to remain cautious in 1H 2009 across most markets. A large number of respondents foresee real estate and finance market conditions worsening over the next six months, indicating that 2009 is likely to have a weaker start as compared to 2008. Confidence Index Methodology

Cushman & Wakefield's Real Estate Confidence Index is a measure of the stakeholders' confidence level and expectation based on the current market scenario and future outlook. To asses the current confidence levels, a survey was conducted across the country, where respondents (developers, financial institutions and end users) gave their opinion on factors like financial environment, business conditions, current and anticipated demand, movement of rental and capital values, etc. The gathered data was collated to assess shifts in confidence levels, which would influence future business cycles in the Indian real estate sector. A positive confidence level indicates increasing availability of funds, heightened constructions activity and increasing demand. A drop in confidence level, however, highlights a pessimistic view resulting in a slowdown in demand and consumer spending.

? Resizing of retail outlets, increasing renegotiations on

rentals and even exit from unviable retail locations ? Retail spaces seeing conversion into office space for quick

revenue returns in certain micro markets ? Sustaining retail business through innovative revenue

models, such as minimum guarantee and revenue sharing ? Buy out of space rather than lease, by firms with enough

liquidity ? Consolidation of small-ticket players by bigger, more stable

players in the realty sector Long-Term India Story Remains Intact The long-term India story remains intact because the fundamental growth drivers of the economy continue to exist. The present crisis may be taken up in a positive spirit as a learning experience for the sector to grow stronger, more disciplined and organised at the end of the day, with greater transparency. While the short-term investor has been hit, the long-term investors as well as primary end user demand remains intact. With the nation's realty growth drivers remaining unchanged, the current situation is more like a temporary, albeit longish, market upheaval which will right itself in the long-term. Long-Term Growth Drivers in India

? The rise of the middle class, ? The rise of a knowledge-based economy,

Outlook Despite the credit crunch, real estate deals are still taking place although at a slower pace. The outlook for the real estate sector in India remains broadly better than other emerging markets across the globe. According to Cushman & Wakefield Research, greater demand from consumers and falling dependency ratios will provide the basis for growth in the Asia Pacific region, including India, which in turn will support demand for real estate. New Trends: Current & Upcoming ? Companies basing office leasing activities on short-term

outlook rather than on long-term expansion plans ? Need-based leasing of space gradually gaining ground as

demand for soft options declines ? Increasing subleasing of space by corporates in the office

sector ? Exit by commercial space takers from CBDs and probable

relocation to more sustainable areas Home buyers will look out for affordable and quality ? developments in a price-sensitive market ? Township projects with a balanced mix of developments

will do better

? Greater deregulation, and ? Growing lifestyle aspirations and growing affluence

The current economic slowdown is forcing companies across the world to formulate strategies that will help in surviving the downturn. Falling demand and dropping top lines have necessitated cost optimisation and a disciplined approach to growth. Companies are finding these economic conditions challenging and with compressed profit margins, it is likely that they will squeeze operational efficiencies to extract maximum value. In such a scenario, real estate, given its share in the operational or capital expenditure of a company, can contribute significantly to reducing operational cost and protecting the bottom line. This, however, will not be achieved by mere downscaling of the real estate exposure, but by making real estate a key part of the overall business strategy of any company. Given the changing landscape, developments with a balanced mix of real estate are likely to do better than most. Realistic and more affordable price points in the housing sector, instead of merely reduced square footage, are also required to revive the market. To survive, the sector now needs to return its focus on quality, affordability, efficiency and delivery.

? Increasing opportunity being created by developers for

smaller space occupiers

47

C&W OUTLOOK CUSHMAN & WAKEFIELD Cushman & Wakefield is the largest privately held premier real estate services firm in the world. Founded in 1917, the firm today has 227 offices in 59 countries around the globe with over 15,000 talented professionals. Cushman & Wakefield is involved in every stage of the real estate process, from strategy to execution, representing clients in buying, selling, financing, leasing, managing and valuing buildings that shape the skylines of the world; and provide strategic planning and research, portfolio analysis, site selection, space location, project and property management services. Cushman & Wakefield commenced India operations in 1997 and was the first international real estate service provider to have been granted permission by the Government of India to operate as a wholly owned subsidiary. Today, with a work force of over 1,300 employees, across offices in Gurgaon, New Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune, C&W has serviced the needs of clients in all major Indian cities like Mohali, Chandigarh, Baroda, Goa, Nagpur, Jaipur, Mysore, Coimbatore, Tuticorin, Cochin, amongst others. India is one of the most promising countries in Asia while also being one of the finest IT destinations today; however, the Indian real estate market is considered to be one of the most complex markets within Asia, hence creating the need for professional real estate management. From sophisticated, complex transactions to basic administration, our services are provided on a regional, national, and worldwide basis to major corporations, developers, retailers, investors, entrepreneurs, government entities, small and midsize companies, and financial institutions worldwide. Capitalising on global technology we maintain the highest quality of real estate counsel and service. We are strategically poised to service the varied needs of clients throughout the Indian sub-continent through our comprehensive real estate solutions, furnished via seven main business lines: Occupier Services, Investment Services, Development Services, Residential Services, Retail Services as well as Industrial Services

We strongly believe in maintaining integrity and achieving excellence in all that we do, creating a name that our clients would always like to associate with.

For more information on Cushman & Wakefield, please contact : Anurag Mathur Managing Director, India Tel: +91 80 4046 5555 Fax: +91 80 4046 5566 [email protected]

Sitara Achreja Director Marketing & Communications, India

Tanuja Rai Pradhan National Head Research and Business Analytics Group, India

Tel: +91 124 469 5555 Fax: +91 124 469 5566 [email protected]

Tel: +91 124 469 5555 Fax: +91 124 469 5566 [email protected]

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CUSHMAN & WAKEFIELD INDIA OFFICES New Delhi Tel: (91 11) 2619 2512-17 Fax: (91 11) 2619 5829 Email: [email protected]

Mumbai (Churchgate) Tel: (91 22) 2281 3317/19/20 Fax: (91 22) 2202 5165 Email: [email protected]

Bangalore Tel: (91 80) 4046 5555 Fax: (91 80) 4046 5566 Email: [email protected]

Gurgaon Tel: (95 124) 469 5555 Fax: (95 124) 469 5566 Email: [email protected]

Mumbai (Goregaon) Tel: (91 22) 6771 5555 Fax: (91 22) 6771 5566 Email: [email protected]

Pune Tel: (91 20) 4003 2223-26 Fax: (91 20) 4003 2227 Email: [email protected]

Kolkata Tel: (91 33) 3984 5239 Fax: (91 33) 3984 5221 Email: [email protected]

Chennai Tel: (91 44) 4299 5555 Fax: (91 44) 4299 5566 Email: [email protected]

Hyderabad Tel: (91 40) 4040 5555 Fax: (91 40) 4040 5566 Email: [email protected]

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice. Our prior written consent is required before this report can be reproduced in whole or in part. Copyright© 2009 Cushman & Wakefield (India) Pvt. Limited All Rights Reserved

Copyright© 2009 Cushman & Wakefield (India) Pvt. Limited All Rights Reserved

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