PROPERTY INSIGHTS

India Quarter 1, 2012

Cautious demand persists while economic growth slows

INDIA MARKET OVERVIEW

In a global scenario where almost all economies displayed poor economic performance, Indias GDP growth was estimated to be 6.9% for the year 20112012, lower than the 8.4% growth in the previous year. Various sectors such as electricity, gas & water supply, trade, hotels, transport and communication, real estate & construction, financing, insurance and business services were the growth drivers during the quarter. Anticipating a better performance this year, the government has forecasted a GDP growth of 7.6% (+/- 0.25%). After being a major concern for most of the year, the first quarter this year witnessed an easing in inflation, which served to to restrict the Reserve Bank of India (RBI) from further hiking the key policy rates. Similarly, the rupee started of by appreciating against the US dollar during the first two months of 2012 to reach a high of 48.67, after depreciating to a level of over 54.23 in mid-December. However, it has since then depreciated again to 53.27 at the end of March. Overall though, the first quarter witnessed renewed and strong foreign exchange inflows through ECBs and FDI. These positive indications have encouraged expectations of an improved global economic scenario and also expected to favourably impact the Indian markets. In line with the overall global economic sentiment, the real estate sector in India started off 2012 on a cautious note across the top 8 cities. The demand for office space was noticed to decline by nearly 32%, whilst supply witnessed a fall of 24% quarter-onquarter (q-o-q). The retail sector witnessed a supply of 2.1 million square feet (msf) which is about 17% of the anticipated supply for the year. Demand from retailers is still strong and expected to carry on. The residential sector has more or less remained stable carrying on to the previous quarter. There has been no significant change in the supply, launches and sales trends on a pan India basis. Capital values have risen in some cases and remained stable in the others. Developers have launched a number of high-end and luxury projects in key micro markets of certain cities in anticipation of an increased demand. However, any significant growth in the overall real estate sector as a result of policy changes and positive economic scenario is anticipated only over a period of time.

INDIA ECONOMIC OVERVIEW

Trends & Updates
According to the Reserve Bank of India (RBI), the wholesale price index (WPI) inflation moderated
Growth Rate (%)
12.0% 10.0% 8.0% 6.0%
5.8% 10.1% 9.3% 9.6% 9.3% 9.7% 9.7% 8.5% 9.4% 7.6% 7.5% 6.1% 6.0% 6.5% 8.8% 8.6% 8.6% 8.9% 8.3% 7.8% 7.7% 6.9% 6.10%

GROSS DOMESTIC PRODUCT GROWTH RATE

to 6.9% in March 2012 from more than 9% during April-November 2011. The consumer price index (CPI) inflation went up to 8.8% in February indicating the prevailing pressure on the prices. The food and commodity prices picked up pace reversing the decline registered during the initial month of 2012. Despite much anticipation, the key policy rates were kept unchanged during RBIs review of monetary policy in March 2012. The repo and the reverse repo rates were kept stable at 8.5% and 7.5% respectively, primarily on account of the prevailing inflationary pressures. After depreciating for five consecutive months since August 2011, the rupee was noticed to strengthen against US dollar during the first quarter of 2012. The appreciation in rupee was registered at approximately 4.7% over the exchange rate registered in December 2011. With the Foreign institutional investors (FII) pumping in money, the rupee reached a three month high in February. However, during March 2012, the exchange rate registered an increase of 2.4% due to the slow growth in the economy coupled with renewed inflationary pressures. While the reversal of trend is a cause of worry, it is likely to benefit the exports. According to the Department of Industrial Policy & Promotion, Foreign Direct Investments (FDI) in the housing and real estate sector during the first two months of 2012 was estimated at approximately INR 782 crores. FDI in the sector has already registered an increase of 56.1% over the last quarter of 2011. As a result of the increased inflow of foreign investments,

4.0% 2.0% 0.0%

Source: Central Statistical Organisation, Govt. of India

EXCHANGE RATE MOVEMENT (INR/USD)

54 52 50
INR/ USD
48 47 47 47 46 46 45 46 44 47 47 47 46 44 45 45 45 45 45 45 45 45 44 44 49 48 51 53 51 50 49

48 46 44 42 40

Source: MInistry of Finance, Govt.of India

FDI INFLOW IN HOUSING AND REAL ESTATE SECTOR

16,000 14,000 12,000
INR Crore

12,621 8,749

13,586

10,000 8,000 6,000 4,000 2,000 171 2,121

5,149 3,326

Source: Dept. of Industrial Policy & Promotion, Govt.of India

the share of housing and real estate sector in the overall FDI also increased to 3.7% during the first two months.

The BSE Realty Index registered an overall surge during the first quarter of 2012. The Index closed at 1776.96 points on 30th March 2012, 29% higher than the value on 30th December 2011. Despite registering a substantial increase, the index is yet to reach the January 2011 mark. While the index picked up momentum in February 2012 to reach 2169.96 points, it declined in March 2012.
Source: BSE

BSE REALTY INDEX

4000 3500 3000
Index

3726.86 3273.563196.82 2856.22 2337.01 2019.84 1762.96 1375.65 1776.96

2500 2000 1500 1000 500 0

Residential Overview
Residential markets in NCR and Bangalore have registered significant increase in capital values on account of buoyant demand. Subdued sales activity and high price points have resulted in stable capital values across majority of the markets in Pune, Mumbai and Kolkata. Additionally, select markets in Hyderabad have witnessed marginal correction due to the moderation in demand. Majority of the cities have seen a slowdown in demand as a result of the prevailing property prices, compounded by stubborn mortgage rates. End-users across markets have put their purchasing decisions on hold, anticipating a revision in prices and interest rates. Southern cities continued to outweigh other regions in terms of residential unit launches during the first quarter of 2012. Chennai witnessed the maximum number of project launches during the quarter followed by Pune. Barring Hyderabad, all markets registered increased unit launches during the quarter. Hyderabad registered a significant drop of around 69% due to lack of clarity on the regulation pertaining to land reservation. Residential unit launches were registered across both mid and high-end segments. Inflation and sluggish economic growth are expected to remain the top concerns for the RBI whilst deciding on key policy rates in the immediate future. Though liquidity in the markets has improved, it is still far from desired levels and market sentiments are expected to remain subdued. Capital values across majority of the markets are expected to remain stable or rise marginally due to the high input costs despite the high unsold stock levels in some cities.
NEW RESIDENTIAL UNIT LAUNCHES ACROSS LOCATIONS IN 1Q 2012
35% 30% 25% 20% 15% 10% 5% 0% 2% 11% 11% 7% 21% 17% 32%
Bangalore (Burnton Road Lavalle Road) Hyderabad (Banjara Hills) Mumbai (South) Pune (Koregaon Park) Chennai (Boat Club) Kolkata (Ballygunge) NCR (Satya Niketan Anand Niketan)

RESIDENTIAL CAPITAL VALUES GROWTH INDEX

800 700 600 500 400 300 200 100 -

Source: Cushman & Wakefield Research

New unit launches (%)

Source: Cushman & Wakefield Research

Index
Ahmedabad Bangalore Chennai Hyderabad Kolkata Mumbai National Capital Region Pune 5 8 12 15 19 22 25 29

Ahmedabad
Market Overview
Transaction activity in Ahmedabads residential market was subdued as sales dropped in the first quarter of 2012. Both end-users and investors have shown preference for ready projects or projects nearing completion. Most of the construction activity was witnessed in Ring Road and Sarkhej-Gandhinagar Highway catering to the mid-segment. The demand for commercial office space increased during the quarter compared. The absorptions were mainly driven by the small and medium scale industries. Buoyancy was observed in the retail real estate segment during the quarter with both malls and main streets registering rental appreciation.
Price (INR/sft)-March 2012 Source: Cushman & Wakeeld Research 5000 4000 3000 2000 1000 0 2900 2600 2600

Premium Ready Residential Property Values in March'12

4600

Trends & Updates

Ready Residential Property Update
Capital values have remained stable across all micro markets so as to sustain demand. Developers continued to offer various incentives and favourable payment schedules to improve demand of their unsold inventory in the ready developments.

Average Capital Values High-end (INR 000/sf)

Location Satellite Vastrapur S.G.Highway Prahlad Nagar Q1 2010 3.8-4.3 3.4-3.7 3.5-4.1 4.0-5.0 Q2 2010 3.9-4.6 3.6-4.0 3.5-4.1 4.1-5.0 Q3 2010 4.0-4.6 3.6-4.0 3.6-4.3 4.2-5.2 Q4 2010 4.0-4.8 3.7-4.0 3.7-4.3 4.2-5.3 Q1 2011 4.3-5.0 3.7-4.0 3.7-4.3 4.2-5.3 Q2 2011 4.3-5.1 3.7-4.0 3.7-4.5 4.2-5.3 Q3 2011 4.3-6 3.7-5 3.7-4.5 4.2-6 Q4 2011 4.3-6 3.7-5 3.7-4.5 4.2-6 Q1 2012 4.3-6 3.7-5 3.7-4.5 4.2-6

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

Average Capital Values Mid-end (INR 000/sf) Location Satellite Vastrapur S.G.Highway Prahlad Nagar Q1 2010 2.8-3.4 2.6-3.2 2.8-3.4 2.7-3.3 Q2 2010 2.8-3.6 2.6-3.3 2.8-3.4 2.7-3.3 Q3 2010 2.8-3.8 2.6-3.5 3.0-3.6 2.8-3.6 Q4 2010 2.8-3.8 2.6-3.5 3.0-3.8 2.8-3.6 Q1 2011 2.8-4.1 2.6-3.6 3.3-4.1 2.8-3.6 Q2 2011 2.8-4.2 2.6-3.8 3.3-4.2 3.0-4.0 Q3 2011 2.8-4.3 2.6-3.8 3.3-4.3 3.2-4.2 Q4 2011 2.8-4.3 2.6-3.8 3.3-4.3 3.2-4.2 Q1 2012 2.8-4.3 2.6-3.8 3.3-4.3 3.2-4.2

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

New Residential Launches

New project launches were reduced this quarter, Ahmedabad witnessed just three significant launches in the first quarter of 2012. Large residential
Project Name Apple Woods Shubh Gruh Developer Sandesh Propcon Tata Housing Location S.P. Ring Road Vadsar-Kalol Road Number of Units* 3,500 1,091 Area of Units 2BHK - 1,258 sf 3BHK - 1,856 sf Studio - 293 sf 1BHK - 384 sf 1.5BHK - 457 sf 2BHK - 963 sf to 1,197 sf 3BHK - 1,300 sf

developments were launched along the S.P Ring Road and Vadsar-Kalol Road.

Aaryavart Heights

Aaryavart Developers

Satellite Road

44

* Estimated and as per market information

Under construction Residential Property Update

Construction activity has witnessed a slowdown over the last quarter. Under construction residential projects are mainly concentrated in locations such as Ring Road, Bopal and Satellite Road. Developers are offering various incentives and favourable payment schedules in the mid-range segment so as to increase demand.

Office
Ahmedabad recorded a total absorption of over 1 lakh sf, registering an increase of approximately 6% over the fourth quarter of 2011. However, the city did not witness any fresh supply during the first quarter of 2012. Rental values across the city appreciated over the last quarter, with highest appreciation of up to 6% noted at Ashram Road and C.G. Road due to lack of availability of Grade A office space.

Retail
Ahmedabad witnessed buoyant demand for mall space during the first quarter of 2012. The Alpha One mall in Vastrapur witnessed revival in interests from retailers with expansion and entry of both domestic and international retailers. Vastrapur and S.G. Highway have emerged high on preference due
6

to availability of quality retail mall space, which has led to rentals appreciation of approximately 33% and 14% respectively. Rentals in main street locations like Satellite Road and S.G Highway appreciated 4% and 6% respectively due to limited quality availability.

Outlook
Most of the new residential projects launches are expected in the mid-end range segment. Capital Values are expected to remain stable in the coming months so as to attract demand. The city is expected to see an infusion of 6,10,000 sf of new commercial space in second quarter of 2012. This infusion of commercial space is likely to stabilize the commercial rentals in the city. Ahmedabad is not expected to witness any new mall supply during 2012. Therefore, with the current upward trend in demand expected to continue, vacancy levels are likely to reduce and rentals are expected to remain stable due to existing vacancy levels.

Bangalore
Market Overview
Bangalores residential market was characterized by developers initiating significant project launches during the quarter despite conservative demand. Sales market remained subdued with buyers postponing their buying decisions on account of the high price points compounded further by the high mortgage rates. The capital values mostly remained stable during the first quarter of 2012. However, in select micro markets they were characterized by widening of the price bands (both in lower as well as higher end) on account of the pricing of the new project launches/under construction properties within the micro markets. The citys office space witnessed healthy
Source: Cushman & Wakeeld Research Price (INR/sft)-March 2012
8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 4,100 7,000 5,750 4,450 5,250 4,500

Premium Ready Residential Property Values in March '12

medium enterprises also accounted for significant transactions. The city witnessed two major malls becoming operational during the quarter with approximately 7580% of the spaces being leased out. Rentals in both malls and main streets continued to remain stable barring exceptions in select micro markets. Leasing activities continued, though scarcity of suitable retail space prevailed.

absorption and pre-commitments in the quarter. Absorption was observed to mostly comprise of space in the range of 10,000-40,000 sf. Whilst the IT/ITeS sector continued to be the prime absorber, small and

Trends & Updates

Ready Residential Property Update
Demand in the primary and secondary markets remained subdued. Capital values of ready property mostly remained stable during the quarter across most micro markets. Substantial availability in new properties or project launches across different price bands and locations were also influential in stabilization of the prices of ready properties. Demand remained persistent in the rental market for locations in South and East Bangalore on account of availability of premium developments as well as their proximity and easy connectivity to the major commercial destinations. Increased demand was also observed for the mid-value properties in North-West Bangalore resulting in marginal rental escalation in the micro market.
Average Capital Values High-end (INR000/sf) Location Central South Off Central East North 2008 14.0-18.0 7.0-9.0 6.5-7.5 6.5-9.0 6.0-8.0 2009 12.0-14.5 6.0-8.5 5.0-6.6 5.6-7.0 5.5-7.0 2010 13.5-17.5 6.0-9.5 5.0-7.0 6.5-7.5 5.5-7.0 Q1 2011 13.6- 17.6 6.1-9.7 5.2-7.1 6.5-7.7 5.7-7.0 Q2 2011 14.0-18.0 6.5-10.0 5.5-7.5 6.8-8.0 6.0-7.4 Q3 2011 14.00-18.00 6.5-10.0 6.0-8.5 6.8-8.0 6.5-8.0 Q4 2011 14.0-18.0 6.5-10.0 6.0-8.5 6.8-8.0 6.5-8.0 Q1 2012 16.0-21.0 6.5-10.0 6.0-8.5 6.0-8.5 6.5-8.0

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

Average Capital values Mid range (INR000/Sq.ft.) Location Central East South East South North South West Off Central* Off Central** North West 2008 5.8-7.0 2.7-3.1 2.9-4.0 5.0-6.5 3.0-4.0 2.8-4.2 4.0-6.0 3.5-6.0 4.2-5.8 2009 5.0-6.0 2.4-2.7 2.5-3.2 4.6-5.7 2.8-4.0 2.7-3.9 3.7-5.7 3.3-5.7 3.5-5.2 2010 5.5-7.0 2.7-3.1 2.8-4.0 4.8-6.0 2.8-4.4 3.2-4.5 4.0-6.2 3.8-6.2 3.8-5.6 Q1 2011 5.6-7.1 2.7-3.3 2.8-4.3 4.8-6.3 2.8-4.5 3.3-4.7 4.2-6.4 3.9-6.4 3.9-5.8 Q2 2011 5.8-7.4 3.0-3.5 3.0-4.5 5.0-6.5 3.0-4.8 3.6-5.0 4.5-6.7 4.3-6.7 4.3-6.2 Q3 2011 6.0-7.5 3.2-3.8 3.4-5.0 5.0-6.5 3.0-4.8 3.6-5.0 4.5-6.7 4.3-6.7 4.3-6.2 Q4 2011 6.0-7.5 3.2-3.8 3.4-5.0 5.0-6.5 3.0-4.8 3.6-5.0 4.5-6.7 4.3-6.7 4.3-6.2 Q1 2012 6.0-8.0 3.8-4.8 4.0-5.5 5.0-7.0 3.0-5.0 3.6-5.0 4.5-7.0 4.0-6.5 4.3-6.2

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

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

New Residential Launches

Even in the backdrop of subdued demand in the market and buyers postponing their purchase decisions, there were some significant new launches from prominent developers. These new projects were across all segments with a mix of apartment and villa developments. Prominent projects include Purva Seasons, Sobha Habitech, Clover Greens and Provident Harmony among others. The new launches were spread mostly across the citys suburban and peripheral regions and were intended to cater to a wide range of buyers.

Project Name Purva Seasons

Developer Puravankara Projects

Location CV Raman Nagar

Number of Units* 660

Area of Units 1BHK -705 sf 2BHK -1,392 sf 3BHK -1,659 sf to1,980 sf 4BHK -5,608 sf to 5,365 sf 1BHK - 662 sf 3BHK -1,241 sf to1,262 sf 2BHK -1,342 sf to 1,727 sf 3BHK -1,842 sf to 2,395 sf 4BHK Pent house - 3,530 sf to 3,583 sf

Clover Greens Provident Harmony Shobha Habitech

Assetz Homes Provident Housing Sobha Developers

Sarjapur Road Thanisandra Whitefield Hopefarm Junction

167 548 318

* Estimated and as per market information

Under Construction Residential Property Update

Work progression continued with the same momentum across most of the under construction projects even in the backdrop of subdued demand. Competitively priced under construction projects with consistent sales were observed to record most of the appreciation in the capital values. Developers continued to customize their offerings by providing value added services to the customers. With significant number of projects under construction - buyers had a wide range of options to choose across different price bands, type of developments and locations among others.

Office
Bangalores commercial office market witnessed absorption of 2.45 msf and pre-commitments of 2.9 msf approximately in the first quarter of 2012. Peripheral markets of Whitefield and Electronics City recorded the highest absorption on account of comparatively reasonable rentals. The overall vacancy level increased to 13.2% during the quarter as majority of the new supply admeasuring 1.27 msf was delivered in the latter part of the quarter. Rental values in CBD/off-CBD micro markets (M.G. Road, Millers Road, Vittal Mallya Road, Residency Road, etc.) and suburban locations (CV Raman Nagar, Koramangala, Bannerghatta Road, etc.) increased 17% and 12% respectively owing to limited Grade A supply and buoyant demand.

Retail
The citys retail market witnessed consistent demand across various segments, including from big box retailers, resulting in lease commitments from them. The suburban micro markets witnessed two major malls becoming operational during the quarter. Notwithstanding the infusion of new mall supply, scarcity of mall space prevailed, resulting in increased pressure on the main streets which faced by shortage of suitable retail space witnessed many retailers vying for the same options.

10

Outlook
Demand in the sales market is likely to gather momentum by the second quarter of 2012 as property buyers who have delayed their purchases are likely to revisit their buying plans with the improving market conditions. Persistent demand in the rental market will also continue, thereby some escalations in the rental values in select micro markets are likely. On account of the high price points across most micro markets, coupled with comparatively subdued demand prevailing during the last few quarters, significant capital value appreciations are unlikely in the forthcoming quarters. New project launches will continue across the citys various locations. Moreover, in view of the high land, construction and other associated costs, the new launches will be at higher price bands with a greater share of developments in the high-end segment. Approximately 11 msf of new supply in the office sector is likely by the end of 2012. Significant lease transactions are expected to be closed during the forthcoming quarters. Vacancy too is expected to come down marginally by the end of 2012 and absorptions in Grade B developments will continue in the suburban markets. Two new malls - one in CBD and another in the peripheral market - approximating at 6,00,000 sf are likely to become operational in the forthcoming quarters of 2012. Scarcity of options across both the malls and main streets are likely to get accentuated by the end of 2012, thereby resulting in escalation in the prime rentals.

11

Chennai
Market Overview
Chennais housing market exhibited positive demand sentiments during the first quarter of 2012; end-users continued to drive the demand in the market. Suburban locations continued to witness buoyant demand despite the high capital values. Markets such as Rajiv Gandhi Salai, Porur and Velachery noted increased sales activity during the quarter. Healthy leasing activity was registered in both mid and high-end markets. Established markets such as T.Nagar, Adyar and Nungambakkam registered appreciation in rental values driven by demand due to their close proximity to the commercial districts. Increase in absorption over the supply of office space during the quarter has resulted in marginal decline in vacancy levels to 15.7%. This had effected the rental appreciation in the CBD, off-CBD and select suburban markets. Several lease transactions of over 50,000 sf by occupiers from the banking and financial services sector were noted during the quarter.
Source: Cushman & Wakeeld Research 25,000 20,000

Premium Ready Residential Property Values in March'12

22,000 19,500

15,000

13,500 9,000

12,500

10,000

5,000

Price (INR/sft)-March 2012

Mall and main street rents remained stable during 1Q 2012 compared to the last quarter. Mall supply admeasuring 1,50,000 sf became operational which led to an increase in overall mall vacancy levels to 8.2% from 6.6% in the fourth quarter. Leasing activity has been sluggish across malls and main streets due to limited availability of quality space except in the suburban market such as Virugambakkam which has seen decline in vacancy levels.

Trends & Updates

Ready Residential Property Update
Limited availability in the premium residential pockets was instrumental in driving the property prices upwards in markets such as Poes Garden, Nungambakkam, Anna Nagar and Adyar. Despite the appreciation, these markets recorded robust sales during the quarter. The demand for ready property in suburban locations persisted during the quarter. While locations with good connectivity and established infrastructure such as Rajiv Gandhi Salai, Velachery and Mogappair registered nominal price increase, the capital values remained stable in other locations.

12

Average Capital values High end (INR 000/sq.ft.) Location Boat Club R.A Puram* Besant Nagar Kotturpuram Adyar Poes Garden** Nungambakkam Anna Nagar Kilpauk 2008 18-24 13-15 NA NA 5.5-10 14.5-20 13-16 6-9 4-8 2009 18-20 13-15 NA NA 5.5-9.5 14.5-18 13-16 6-9 4-8 2010 18-23 13-16.5 NA NA 8-12 14.5-20 13-16.5 7.5-10.5 8-12 Q1 2011 19-23 13-16.5 NA NA 8-12 15-20 13-16.5 8-10.5 8. 5-12 Q2 2011 19-23.5 13-16.5 NA NA 8-12 15.5-20.5 13-16.5 8-10.5 8.5-12.5 Q3 2011 20-24.5 13-16.5 12.5-13.5 12-14 10-13.5 15.5-23.5 13-17 8-11.5 8.5-12 Q4 2011 20-25.0 14-17 12.5-13.5 12-14 11.5-13.5 17.5-24.5 13-17 8-11.5 9-15 Q1 2012 20-25.0 14-18 12.5-13.5 12-14 12.5-14 18.5-25 14-18 9-12 9-15

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

Average Capital values Mid range (INR 000/sq.ft.) Location Adyar Rajiv Gandhi Salai (Perungudi) Velachery T Nagar Mylapore Mogappair Kilpauk
Source: Cushman & Wakefield Research Note: The above values for mid segment typically include units of 1,000-2,000 sq.ft. The time series have been adjusted to reflect the updated values

2008 4.5-6.5 2.5-3.6 3.8-4.2 4-6.5 NA NA 4.5-6

2009 4.5-6.5 2.5-2.8 3.5-4 4-6.5 NA NA 4.5-6

2010 6-8.5 3.5-4.5 3.5-5 7.5-10.5 NA NA 6-8

Q1 2011 6-8.5 3.8-5 3.5-5 7.5-10.5 NA NA 6-8.5

Q2 2011 6-8.5 4-5.5 3.5-5.3 7.7-11 NA NA 6.5-8.5

Q3 2011 6.5-10 4-5.5 3.5-5.5 8-11 8-12.5 5-5.5 7-9

Q4 2011 8-11 4-5.5 3.5-5.5 8.5-11.5 8-12.5 5-5.5 7.5-9.5

Q1 2012 8.5-12 4.5-6 4-6 8.5-13 9-14 5-6.5 8-10

New Residential Launches

The number of project launches during the quarter increased threefold over the previous quarter. Around 8,000 residential units were launched during the quarter. Locations such as Porur and Manapakkam registered maximum number of units being launched and accounted for nearly 40% of the total units
Project Name Bella Vista Developer Prestige Group Location Mount Poonamallee Road, Porur

launched. The emerging micro markets of GST, Rajiv Gandhi Salai and Velachery also registered several launches during the quarter. Nearly 90% of the inventory launched during the quarter catered to the mid-segment, located primarily in the suburban markets.
Number of Units* 2,613 Area of Units 1BHK 600 sf 2BHK 1,340 sf to1494 sf 3BHK 1,990 sf 4BHK 2,621 sf 1BHK 600 sf 2BHK 1,340 sf to1,400 sf 3BHK 1,650 sf 2BHK -952 sf 3BHK 1,377 sf 4BHK 1,815 sf 2BHK 1,152 sf to1,313 sf 3BHK 1,578 sf 2BHK 1,194 sf to1,222 sf 3BHK 1,426 sf to1,489 sf

Sobha Meritta

Sobha Developers

Vandalur-Kelambakkam Road Mahalingapuram Main Road

556

Epica

Casa Grande

12

Olympia Grande Godrej Palm Grove

Olympia Group Godrej Properties

Pallavaram Chembarambakkam

780 660

* Estimated and as per market information

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Under construction Residential Property Update

A number of under construction projects registered a price increase of 5-6% during the quarter, with majority belonging to the high-end segment. A few projects in Rajiv Gandhi Salai namely Hiranandani Upscale, TVH Ouranya Bay and Ceebros Boulevard were completed with some being handed over in phases.

Office
Office space supply of around 3,80,000 sf was registered during the first quarter of 2012. Guindy witnessed the highest quantum of supply during the quarter. The absorption was registered at approximately 8,00,000 sf. The demand during the quarter was driven by non-IT sectors as against the earlier quarters. CBD and off-CBD markets have registered a marginal rental increase in the range of 3-4% during the quarter. Office rentals remained stable in peripheral markets due to high vacancy levels.

Retail
Fresh mall supply of 1,50,000 sf was registered during the first quarter of 2012. Mall vacancy levels across the city registered 8.2%. The mall rentals across all markets remained stable during this time period. Barring Khader Nawaz Khan Road, rentals across other main streets registered no fluctuation during the first quarter of 2012. The stability in rentals may be attributed to the limited leasing options in these markets.

Outlook
The demand for residential properties is expected to persist in the following quarter. Majority of the mid-end markets and select highend markets like Adyar and Anna Nagar are expected to see price increases. On the other hand, the rental values across most markets are expected to remain stable. Around 20,00,000 sf of office space is scheduled for completion in the second quarter of 2012. The demand levels in the market are expected to persist in the following quarters. The rental values are likely to register marginal increases in the CBD and off-CBD markets. Demand for retail spaces across main streets is likely to remain buoyant in the forthcoming quarters. Khader Nawaz Khan Road and Velachery Bypass Road are expected to register moderate rental appreciation during this time period. It is also anticipated that close to 10,00,000 sf of mall space will be infused during 2012.

14

Hyderabad
Market Overview
Hyderabads residential market witnessed a slightly positive trend during the first quarter of 2012. Projects located in prime residential catchments of Miyapur, Kukatpally, Chandanagar and Kondapur, in close proximity to IT & Financial districts of Madhapur and Gachibowli have witnessed higher enquiries along with a moderate sales activity indicating continued optimism from the last quarter from end-users and investors alike. Peripheral locations such as Nallagandla and Gopanpally with a presence of ready properties have also witnessed a positive trend in terms of sales enquiries. Proximity to Gachibowli, growing infrastructure facilities and overall development in the residential localities nearby have induced a positive effect on these locations. Despite a growth in the number of enquiries, developers continued to keep the prices low in order to boost sales. The overall capital value appreciation has been modest, fluctuating between 2-4% in these markets.
Source: Cushman & Wakeeld Research

Premium Ready Residential Property Values in March '12

12000 10,500 10000 8000 6000 4000 2000 0 8,300 8,700

4,900

5,300 4,200

Price (INR/sft) March 2012

The demand for commercial office space market in Hyderabad has remained moderate during the first quarter. The overall absoprtion was recorded at 7,10,000 sf., nearly 37% lower than the previous quarter. In the retail market, higher leasing enquiries and scarcity of suitable spaces have pushed the rentals upwards in the range of 9-20% (q-o-q) across the citys prime retail locations such as Punjagutta, Madhapur, Abids and Himayatnagar. A.S. Rao Nagar has witnessed the highest rental growth at 26%.

Trends & Updates

Ready Residential Property Update
As the momentum witnessed in the fourth quarter of last year continued into 2012, several ready properties in prime residential catchments of Miyapur, Kukatpally, Madhapur, Gachibowli and their immediate surroundings have witnessed healthy enquiries. Projects with limited availability of ready properties and those on the verge of completion in these locations have marked a 7-10% rise in prices compared to last quarter. Ready properties in distant localities such as Nallagandla and Gopanpally that mostly cater to the mid-value segment have also gained attention of the end users. At the same time areas such as Begumpet, Somajiguda and Himayatnagar have recorded price corrections due to moderate demand.

15

Average Capital values High end (INR 000/sq.ft.) Location Banjara Hills Jubilee Hills Himayatnagar West & East Marredpally Begumpet, Somajiguda Madhapur, Gachibowli Kukatpally Miyapur, Nizampet Road
Source: Cushman and Wakefield Research The above values for high end typically include units of 1,600-3,200 sq.ft.

2008 6.5-7.1 6.5-7.1 3.4-4.4 3.3-4.3 3.9-4.5 3.8-4.4 3.3-4.3 NA

2009 5.8-6.5 5.5-6.3 3.3-4.0 3.3-3.8 3.9-4.5 3.5-4.3 3.3-4.0 2.6-3.3

2010 6.0-7.2 6.0-7.0 3.7-4.0 3.5-4.0 4.1-4.5 3.8-4.9 3.5-4.5 2.7-3.4

Q1 2011 6.0-7.4 6.0-7.0 3.7-4.0 3.5-4.2 4.1-4.7 3.8-5.0 3.5-4.8 2.7-3.4

Q2 2011 6.3-7.4 6.2-7.0 3.7-4.0 3.6-4.2 4.3-4.7 4.0-5.0 3.8-4.8 2.7-3.4

Q3 2011 6.3-7.5 6.2-7.1 3.7-4.0 3.6-4.2 4.3-4.7 3.9-5.0 3.8-5.0 2.8-3.4

Q4 2011 6.4-7.5 6.2-7.2 3.7-4.2 3.6-4.3 4.3-4.8 3.9-5.3 3.8-5.1 2.8-3.5

Q1 2012 6.4-7.5 6.1-7.2 3.7-4.1 3.6-4.3 4.3-4.7 4.0-5.3 3.8-5.1 2.9-3.5

Average Capital values Mid range (INR 000/sq.ft.) Location Banjara Hills Jubilee Hills Himayatnagar West & East Marredpally Begumpet, Somajiguda Madhapur, Gachibowli Kukatpally Miyapur, Nizampet Road
Source: Cushman and Wakefield Research The above values for mid range typically include units of 1,200-1,600 sq.ft.

2008 3.4-4.2 3.4-4.0 2.6-3.0 2.5-3.0 2.5-3.0 2.6-3.0 2.4-2.8 NA

2009 3.6-4.2 3.5-4.0 2.7-3.0 2.5-2.8 2.6-3.1 2.5-3.1 2.4-2.9 1.8-2.5

2010 3.6-4.5 3.7-4.0 2.7-3.5 2.7-3.0 2.8-3.5 2.6-3.4 2.7-3.2 1.8-2.5

Q1 2011 3.6-4.5 3.7-4.0 2.7-3.5 2.7-3.0 2.8-3.5 2.6-3.4 2.7-3.2 1.8-2.7

Q2 2011 3.8-4.5 3.9-4.2 2.7-3.5 2.8-3.0 2.9-3.5 2.8-3.4 2.9-3.2 2.4-2.7

Q3 2011 3.8-4.6 4.0-4.2 2.7-3.5 2.8-3.0 2.9-3.5 2.8-3.3 2.9-3.3 2.4-2.7

Q4 2011 3.8-4.6 4.0-4.2 2.7-3.7 2.8-3.2 2.9-3.6 2.8-3.5 2.9-3.5 2.4-3.0

Q1 2012 3.8-4.6 4.0-4.2 2.7-3.6 2.7-3.2 2.8-3.5 2.8-3.7 2.9-3.5 2.3-3.2

New Residential Launches

The city saw a 68% decline in new launches compared to last quarter owing to continued uncertainty over the land reservation regulation (G.O.45). Three projects totalling approximately 528 units were launched across the high-end segment in Gachibowli and Shankarpally.
Project Name Ramky Towers Elite Nagarjuna Residency Phase 2 Serene Pragati Developer Ramky Estates Manjeera Constructions Nagarjuna Constructions Location Gachibowli Gachibowli Shankarpally Number of Units* 128 72 328 Area of Units 3BHK 2,410 sf to 2,610 sf 4BHK 4,990 sf to 5,010 sf 3BHK 2,430 sf to 2,690 sf 4BHK 3,170 sf 1BHK 608 sf 2BHK 850 sf to1296 sf 3BHK 1,900 sf

Out of the three new launches, two projects in Gachibowli had additional phases launched, whilst a retirement community with approximately 328 units was launched in Shankarpally, away from the city limits.

* Estimated and as per market information

16

Under construction Residential Property Update

Despite a reduction in promotional offers during the first quarter, end-users have increasingly evaluated properties in key residential locaities with higher locational advantages such as Miyapur, Kukatpally, Madhapur and Gachibowli. Sustained political stability, higher enquires, moderate rise in sales along with a reduction in launches over the last one year have all pushed the prices upwards by 5-7% (q-o-q) in these locations. Projects under various stages of construction in the mid-priced segment such as Aparna Hill Park Avenues, Vertex Prime, Rainbow Vistas, Prajay Megapolis and Emami Swan Lake have recorderd a minor appreciation (3-5%) during the first quarter.

Office
The market recorded approximately 7,10,000 sf. of office space absorption during the first quarter.The supply was recorded at 5,60,000 sf., nearly 20% lower than the fourth quarter of 2011. IT/ITeS absorption was impacted by the limited availability of Grade A space in Special Economic Zones and IT Parks in the suburban market coupled with conservative sentiments in the domestic and global markets. With moderate demand across the city and continued infusion of second generation space, the overall vacancy has increased slightly to 15.7% (15% during Q4, 2011). With no major variations in demand trends and stable vacancy across most micro markets, office rentals have also remained stable.

Retail
Growth of catchment areas, increasing in leasing terms and favourable rentals have attracted specialty retailers such as branded apparel stores, foot wear, premium furniture apart from food & beverages outlets and hyper/super markets to these locations. Rentals in the operational malls have increased by 5-15% over the previous quarter due to zoning modifications. requirements and scarcity of options in prime retail micro markets have pushed retailers into exploring new locations such as Habsiguda, Vanasthalipuram, A.S.Rao Nagar, L.B.Nagar and Chandanagar to expand their operations. Some large format stores have reserved space in the upcoming standalone developments and malls. Adequate supply, flexibility

17

Outlook
Key residential locations such as Miyapur and Kukutpally as well as upcoming locations such as Gopanpally and Nallagandla may witness new projects in the short term. Price appreciation in prime residential localities is expected due to limited availability of ready properties, reduced supply in the short to medium term and growing enquiries in the market. In the commercial office market, demand for ready properties with Grade A options in Gachibowli is expected to rise on the back of low vacancy levels and shortage of quality space in Madhapur submarket. Office space rentals across the city are likely to stabilize, except in the suburban markets due to limited availability of suitable space options and healthy enquiries. In the retail segment, the market would

continue to expand and penetrate newer locations such as Habsiguda, A.S.Rao Nagar, L.B.Nagar, Vanasthalipuram and Chandanagar. Rentals in the upcoming locations could remain stable to cash in on growing enquiries. Minor appreciation in the short term in prime retail markets such as Punjagutta, Jubilee Hills, Banjara Hills, Somajiguda and Abids is likely due to shortage of supply.

18

Kolkata
Market Overview
During the first quarter of 2012, Kolkatas residential market reflected positive sentiments with increased project launches across various segments. Steady demand for affordable and mid-priced segments was evident and it leads to an increased number of project launches. Peripheral locations like Sonarpur, Kankurgachi, and Jessore Road assumed increased importance as a significant number of projects in both aforementioned segments were launched in these locations, primarily due to improved infrastructure and affordable land prices. The commercial office space market in Kolkata also witnessed steady demand recording absorption of approximately 3,00,000 sf against a supply of 6,00,000 sf in this quarter.
Source: Cushman & Wakeeld Research

Premium Ready Residential Property Values in March'12

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 6,500 6,000 4,500 5,500 8,500 8,500

Price (INR/sft)-March 2012

Retail market in Kolkata recorded increased transactions as regional retailers seemed to expand their operations in the city. Regional retailers exhibited preference for standalone properties on main streets. Simultaneously, lack of mall supply remained a major concern which prompted international retailers to opt for pre-commitments in under construction malls

Trends & Updates

Ready Residential Property Update
Premium high-end properties across the city witnessed stable pricing trends in view of already high property prices. Capital values remained stable across most micro markets except for prime locations in South Kolkata owing to limited availability.

Average Capital values High end (INR 000/Sq.ft.) Location South South Central South East South West Central East North East 2008 5.0 - 6.0 9.0-10.0 4.5-5.7 9.5-10.0 7.5-8.5 4.0-5.0 2.5-3.0 2009 4.8-5.9 8.5-9.6 4.5-5.7 8.6-9.8 7.2-8.1 4.0-4.7 2.4-2.9 2010 5.3-6.8 9.5-13.0 4.5-8.0 8.9-13.0 7.5-9.2 4.0-4.9 2.4-3.9 Q1 2011 6.0-8.0 9.5-14.0 5.0-8.5 10.0-12.0 7.8-9.5 4.2-5.0 2.6-4.2 Q2 2011 6.3-8.0 10.0-17.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.3 2.8-4.5 Q3 2011 6.3-8.5 10.0-18.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.5 2.8-4.5 Q4 2011 6.3-8.5 10.0-18.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.5 2.8-4.5 Q1 2012 7.0-9.0 10.0-18.0 5.8-9.2 10.0-15.0 8.3-10.2 4.5-5.5 2.8-4.5

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

19

Average Capital values Mid range (INR 000/Sq.ft.) Location South South Central South East North East North 2008 2.8-4.3 4.5-5.5 2.5-3.0 1.8-2.2 1.8-3.5 2009 2.7-3.9 4.2-5.3 2.4-2.8 1.9-2.2 1.8-3.4 2010 3.2-4.5 4.5-6.0 2.5-3.2 2.2-2.7 2.2-4.7 Q1 2011 3.2-5.0 5.0-7.0 2.7-4.0 2.3-2.8 2.3-4.8 Q2 2011 3.8-5.5 5.5-7.2 2.8-4.5 2.4-3.0 2.8-5.2 Q3 2011 3.8-5.5 5.5-8.0 2.8-4.5 2.4-3.0 2.8-5.2 Q4 2011 3.8-5.5 5.5-8.0 2.8-4.5 2.4-3.0 2.8-5.2 Q1 2012 3.8-5.5 5.5-8.5 2.8-4.5 2.4-3.0 2.8-5.2

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

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

New Residential Launches

First quarter of 2012, witnessed almost 1,600 unit launches as compared to 1,300 units in the fourth quarter of 2011. Most of the projects were launched
Project Name Larica Green Hamlet Developer Larica Estates Location Pailan

in the peripheral locations targeting the mid-income consumers. The projects launched during this quarter were priced between INR.1,700 - 3,000/- per sf.
Number of Units* 85 Area of Units Rowhouse 1,080 sf Bungalows 1,500 sf to 4,000 sf Bungalows 1,093 sf to 3,174 sf 2BHK 797 sf to 897 sf 3BHK 1,000 sf to 1,139 sf 2BHK 867 sf to 990 sf 3BHK 1100 sf to 1300 sf 1BHK 540 sf to 560 sf 2BHK 846 sf to 1,040 sf 2BHK 915 sf to955 sf 3BHK 1,100 sf to1,220 sf 3BHK 2,142 sf to 2,525 sf 4BHK 3,538 sf 5BHK 4,500 sf to 5,200 sf 3BHK 1,550 sf to 2,000 sf 4BHK 2,630 sf 3BHK 1,600 sf 4BHK 2,100 sf 3BHK 972 sf to 1,402 sf 2BHK 980 sf 3BHK 1,022 sf

Lord City Sonarpur Rittika Residency Daffodil Waterfront Trinath Dream Exotica Astitva

Lord Group SD Developers Daffodil Projects Local developer Purti Group MCK PGE Projects LLP

Sonarpur Rajarhat Maheshtala Baguiati Madhyamgram Kankurgachi

37 355 105 105 455 170

Omni Countryside Omnitech Lakeview DumDum Heights SGIL Residenzza

Bengal Omnitech Bengal Omnitech Jessore Road Construction LLP SGIL Infra Project

Sonarpur Garia Jessore Road, Jessore Road,

30 68 54 120

* Estimated and as per market information

20

Under construction Residential Property Update

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

Office
Kolkatas office market continued the previous trend of absorptions at just over 280,000 sf and continued to witness healthy demand as absorption remained high by approximately 33.7% compared to the last quarter. Rentals in prime office locations like Park Street and Chowringhee continued to appreciate on account of steady demand from various non-IT/ ITeS companies. Supply was recorded at 6,00,000 sf, almost 41% higher than last quarters supply.

Retail
Kolkatas retail market exhibited positive due to increased demand from national and regional retailers. There was no fresh mall supply during the quarter. Mall rentals remained stable and vacancy remained low. A number of international retailers were seen to opt for pre-commitments in under construction malls in view of lack of ready mall space. sentiments with increased lease transactions during the first quarter of the year. Retailers seemed to be on expansion spree. However, lack of mall supply remained a major concern for retailers. Established main streets continued to witness rental appreciation

Outlook
The residential market in Kolkata is expected to see continued demand for affordable and mid ranged properties. However, if high inflation rate continues, transactions may have an impact. Capital values are likely to remain stable as more supply is expected to get infused in the coming quarters. Peripheral locations like Barasat in North and Garia in South will continue to witness increased importance due to more number of affordable project options and improved infrastructure facility. Rental values across the peripheral office locations are expected to decline owing to the planned supply and increase in vacancy levels in the coming quarters. However, rental values across central business district are likely to strengthen owing to sustained demand and highly limited scope for increasing supply. Kolkatas retail market is expected to witness approximately 3,50,000 sf of mall supply in the next few quarters. Rents across established main streets and malls in CBD are likely to appreciate on account of persistent demand.

21

Mumbai
Market Overview
The residential market in Mumbai was
50,000 40,000 32,000 30,000 20,000 11,000 10,000 0

Premium Ready Residential Property Values in March'12

46,000 40,000

characterized by a cautious approach by buyers as sales continued to be subdued and no reductions in prices were observed over the last quarter. High inventory levels of ready stock have lead the developers to follow a cautious approach leading to fewer launches compared to last quarter. Endusers exhibited reluctance to invest in underconstruction and newly launched projects due to the high mortgage rates and price points resulting in reduced sales activity. The commercial office market in Mumbai regained some momentum in the first quarter of 2012. Absorption levels improved significantly by 30% over the last quarter and were noted at 14 lakh sf. BFSI sector remained the highest demand driver with nearly 27% of share in absorption.

13,000

Price (INR/sft)-March 2012

Source: Cushman & Wakeeld Research

Mall rentals have remained stable during the quarter. The existing vacancy levels and some activity in retail locations resulted in stable rentals.

Trends & Updates

Ready Residential Property Update
Despite the poor sales, capital values at most residential locations were observed to remain stable over the quarter as developers cited high raw material costs and high cost of funding. However, capital values in the high-end segment of South Mumbai and mid-end segment of Central Mumbai were recorded to register an annual appreciation of 7% and 11% respectively.

Average Capital values High end (INR000/sq.ft.) Location South South Central Central North Far North North East 2008 43-55 47-67 33-53 27-31 9-13 14-18 2009 42.5-58 42- 66 34-55 22-30 10-16.5 10-16 2010 43-60 45-70 35-55 24-32 11-16.5 10-16 Q1 2011 43-60 45-70 35-55 24-32 11-16.5 10-16 Q2 2011 45-65 45-75 35-55 24-32 11-16.5 10-17 Q3 2011 45-65 45-75 35-55 24-32 11-16.5 10-18 Q4 2011 45-65 45-75 32-54 24-32 11-16.5 10-18 Q1 2012 45-65 45-75 32-54 24-32 11-16.5 10-18

Source: Cushman and Wakefield Research

22

Average Capital values Mid range (INR000/sq.ft.) Location South South Central Central North Far North North East 2008 27-34 34-43 18-28 13.5-19.5 7-9 6-7.4 2009 28-37 35-45 15-26 16-24 8.5-11.5 6.4-8.5 2010 43-60 45-70 35-55 24-32 11-16.5 10-16 Q1 2011 30-40 40-48 17-30 16-25 9-12 6.5-8.5 Q2 2011 30-40 40-48 17-30 16-25 9-12 7-8.5 Q3 2011 30-40 40-48 17-35 16-25 9-13 7-10 Q4 2011 30-40 39-47 17-35 16-25 9-13 6.5-10 Q1 2012 45-65 45-75 32-54 24-32 11-16.5 10-18

Source: Cushman and Wakefield Research

Note: High-end - Approximately 2,500 - 6,000 sf for South, SouthCentral, Central and North (Bandra & Khar) - Approximately 1,800 - 4,000 sf for North (Santacruz & Juhu), Far North and North-East Mid-end - Approximately 1,400 - 2,500 sf for South, SouthCentral, Central and North - Approximately 1,200 - 1,600 sf for Far North and North-East

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

New Residential Launches

Mumbai witnessed around 7,000 units launched in the first quarter of 2012. Ghodhbunder Road witnessed about 5,000 units launched in the quarter.
Project Name Codename Dawn Developer Lodha Group Location Thane Number of Units* 1,800 Area of Units 1BHK 648 sf 2BHK 864 sf to 1,068 sf 3BHK 1,485 sf 2BHK 1,300 sf to 1,400 sf 3BHK 1,600 sf to 2,300 sf 5BHK 3,668 sf 2BHK 1,065 sf to 1,280 sf 3BHK 1,375 sf 1BHK 700 sf 2BHK 1,065 sf 1BHK 710 sf 2BHK 1,100 sf 2BHK 1,155 sf to 1,328 sf 3BHK 1,581 sf to 1,759 sf

Several developers were also seen to launch their successive phases, concentrated mainly in Thane.

Lodha Dioro Hiranandani Basilus Serita Cosmos Enclave Cosmos Garden Dosti Imperia Phase 2

Lodha Group Hiranandani Developers Uma Group Cosmos Group Cosmos Group Dosti Group

Wadala Thane Thane Thane Thane Thane

240 28 24 150 560 315

Source: Cushman & Wakefield Research

23

Under construction Residential Property Update

Construction activity has witnessed a revival during the last quarter in locations like Thane and Navi Mumbai. Developers were noticed to offer various incentives and favourable payment schedules to induce demand. Under construction projects have maintained price points quoted in the previous quarter while projects nearing completion have witnessed a minor appreciation.

Office
The commercial office market in Mumbai regained some momentum in the first quarter of 2012 and recorded absorption of approximately 14 lakh sf spread across all micro markets. The BFSI sector remained the highest demand driver with nearly 27% of share in absorption. Absorption was concentrated in BKC (29%) followed by ThaneBelapur Road (23%) and Lower Parel (19%). The city saw decline in pre-commitments during the quarter since companies preferred to take up space in ready developments due to high availability. Additionally, supply remained subdued during the first quarter of 2012 and was recorded at 14.4 lakh sf which is 47% less than the last quarter. There was no change seen in the rental values compared to last quarter and it is likely remain at current levels owing to competitive pressure from upcoming supply.

Retail
The retail market in Mumbai witnessed an increase in enquires from new as well as existing retailers in both malls and main street locations. Majority of the landlords in prime main street locations are pressing for an upward revision in rentals so as to capitalize on higher demand and lack of quality supply.

Outlook
Capital values are expected to remain stable in the next quarter. Thereafter, capital values of new project launches may appreciate due to the new Development Control Rule norms announced by the State, whereby the developers will have to pay a premium for additional Floor Space Index for residential developments. Fresh supply of approximately 17.5 lakh sf of commercial office space is expected to be infused in the next quarter. This is likely to increase vacancy levels in the upcoming quarters. Main street rentals are expected to remain stable in the upcoming quarter. However, mall rentals in locations like Malad, Lower Parel and Link Road are expected to exhibit a minor appreciation on account of low vacancy levels and reduced supply in these micro markets.

24

National Capital Region

Market Overview
The residential market was seen to be depicting signs of improvement, both on demand and supply side. The high demand and supply gap led to an increase in capital values of 22% over the previous quarter in select high-end locations in Delhi. On the back of improving demand, developers have been re-focussing on luxury/high-end projects although mid segment projects continue to be the mainstay. Rental values across the city saw an appreciation in the range of 5-11% compared to last quarter, with highest increase noted in Gurgaon. According to the media sources, the stamp duty collection in Gurgaon in 2011 increased at least 30% in comparison to the previous year. Also, Gurgaon contributed more than 40% to the States total revenue from property transactions. This indicates the increasing real estate activity in the location. The office market during the first quarter seemed sluggish with reduction in both supply and demand compared to last quarter. Approximately 20 lakh sf of new developments were completed which was double of the demand noted during the quarter. The retail sector also saw reduced supply with only one mall getting operational in Gurgaon during the quarter. Leasing activity was buoyant across main street locations compared to the malls due to limited availability of quality space in malls. Infrastructure sector is the focal point of the Government as it increased allocation to the sector in Budget 2012-13. The allocation for Metro projects
Source: Cushman & Wakeeld Research

Premium Ready Residential Property Values in March' 12

30,000 25,000 20,000 15,000 10,000 5,000 14,250 10,000 12,500 10,250 26,500

Price (INR/sft)-March 2012

has increased by over 12% from INR 5,166 crore to INR 5,798.57 crore, in line with finance ministers push for infrastructure projects through the Budget. Out of this, the Delhi Metro Rail Corporation (DMRC) continues to have majority share of INR 2,116.69 crore which increased by 41%. Delhi Metro Rail Corporation is expected to utilise the funds to add around 104 km to the network in the National Capital Region in phase-III by the year 2016. In addition, the Delhi Cabinet approved the transfer of INR 621 crores to the National Highway Authority of India as its contribution to accelerate the construction of the Kundli-Manesar (KMP Expressway). The expressway would connect National Highway 1 at Kundli north of Delhi with National Highway 10 just north of Bahadurgarh, National Highway 8 south of Manesar in Gurgaon and National Highway 2 near Palwal. This is expected to create several corridors that will encourage housing developments.

25

Trends & Updates

Ready Residential Property Update
Prices of ready property have increased Overall, rentals values across the city increased in the range of 5-10% during the first quarter of the year with relatively higher increment noticed in the suburban locations. significantly compared to the last quarter. Select locations in Delhi such as South West and Central saw a quarterly price increase of up to 20%. Similarly, the suburban locations also saw notable increase in the range of 5-10% during the first quarter of the year, owing to limited completions and high demand.
Average Capital values High end (INR 000/Sq.ft.) Location South West South East South Central Central Gurgaon Noida 2008 28-33 19-23 20-23 45-50 5.2-11 5.2-6.2 2009 29-34 21-24 21-25 40-45 5.3-12.5 5.2-6.5 2010 36-43 24-30 25-32 50-57 6.2-18 5.5-7 Q1 2011 36-45 24-30 25-35 50-60 7.5-20 5.5-7 Q2 2011 40-47 25-32 27-40 50-60 8.5-21 5.5-7.5 Q3 2011 42-50 25-35 27-40 50-65 8.5-21 5.5-7.5 Q4 2011 42-50 25-35 27-40 50-65 8.5-21 5.5-7.5 Q1 2012 50-60 25-40 27-40 60-80 9.5-25 5.8-8.0

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

Average Capital values Mid range (INR 000/Sq.ft.) Location South East South Central Gurgaon Noida 2008 14-16 18-20 3.8-5.2 3-4.5 2009 14.5-16.5 18.5-20.5 4-6.5 3.2-5.5 2010 15-20 20-23.5 4.5-7.5 3.8-5.6 Q1 2011 15-22 20-25 4.8-8.5 4-5.6 Q2 2011 15-25 22-27 5-9 4.2-5.8 Q3 2011 15-28 25-30 5-9 4.2-5.8 Q4 2011 15-28 25-30 5-9 4.2-5.8 Q1 2012 20-30 25-30 6.5-9 4.5-6.0

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

Key to Locations:
High Segment South-West: Shanti Niketan, Westend, Anand Niketan, Vasant Vihar South-East: Friends Colony East, Friends Colony West, Maharani Bagh, Greater Kailash - I, Greater Kailash II. South-Central: Defence Colony, Anand Lok, Niti Bagh, Gulmohar Park, Hauz Khas Enclave, Safdarjung Development Area, Mayfair Gardens, Panchsheel Park, Soami Nagar, Sarvodaya Enclave. Central: Jorbagh, Golf Links, Amrita Shergil Marg, Mid Segment South-East: New Friends Colony, Kalindi Colony, Ishwar Nagar, Sukhdev Vihar, Kailash Colony, Pamposh Enclave. South-Central: Uday Park, Green Park, Saket, Asiad Village, Geetanjali Enclave, Safdarjung Enclave, Sarvapriya Vihar, Panchsheel Enclave, Navjeevan Vihar. 26 Aurangzeb Road, Prithviraj Road, Sikandara Road, Tilak Marg, Ferozshah Road, Mann Singh Road, Sunder Nagar, Nizamuddin, Tees January Marg, Chanakyapuri.

New Residential Launches

Improved demand led to increased luxury and highend segment project launches during the quarter in the suburban locations; by quantum the mid-value segment
Project Name Amstoria Developer BPTP Location Sec 102, Dwarka Expressway, Gurgaon Sector 90, Gurgaon

projects continue to dominate the new launches. Most of the developers continued to increase prices of new projects/launches on account of improved demand.
Number of Units* 700-800 Area of Units* 3BR+3T 2,384 sf 3BR+3T 2,435 sf to 5,374 sf 4BR+6T+1ST 5,709 sf 3BHK 1693 sf to 1,818 sf 4BHK 2,215 sf

Regal Garden

DLF Ltd.

400-500

* Estimated and as per market information

Under construction Residential Property Update

Construction activity was noticed to continue at a modest pace with a few projects in the finishing stage in Gurgaon and Noida Expressway which are likely to be handed over in 2012. In addition, a few developers have commenced construction in the upcoming pockets such Yamuna Expressway in Greater Noida, Dwarka Expressway and Southern Periphery Road in Gurgaon.

Office
During the first quarter, new office supply admeasuring 20 lakh sf was completed registering a 10% decline compared to the last quarter. Entire addition to the stock during the first quarter was in Gurgaon and most of it catered to the IT/ITeS segment. There was low absorption, registered at 5,50,000 sf with pre-commitments further accounting for nearly 4,50,000 sf. The CBD locations recorded a rental appreciation of approximately 14% over the last quarter, attributable mainly to the prevailing low vacancy levels and lack of supply. However, across most other micro markets, the rental values remained stable in the light of weak demand during the quarter.

Retail
The first quarter saw limited mall supply of approximately 125,000 sf in Gurgaon. Due to limited quality supply and less churn, mall rents remained stable over the previous quarter. However, leasing activity was buoyant across main streets mainly driven by local retailers in the Jewellery and Food & Beverages segments. This lead to increase in rental values up to 10% in select markets such as Connaught Place, South Extension and Karol Bagh.

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Outlook
In the residential markets, rental values across Delhi locations are expected to remain stable in the short term. However, in Gurgaon they are likely to appreciate due to limited new supply in the next quarter. In contrast, capital values are expected to rise for both mid and high-end properties across prominent locations in Delhi, Gurgaon and Noida. Approximately 43 lakh sf of new office developments are expected to be offered for fitouts in the second quarter, with majority of the new supply concentrated in Gurgaon. The rents across the city are likely to remain stable with moderate appreciation expected in Central Business Districts and Gurgaon. New mall supply admeasuring 34 lakh sf is expected to be completed during the year 2012, which depicts a 50% increase in supply compared to last year. Therefore, mall rents are likely to be under pressure in select locations such as West Delhi and Noida where majority of the supply is planned.

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Pune
Market Overview
The capital values and rents remained stable across most micro markets in Pune during the first quarter of 2012 except for Aundh and Koregaon Park. The city saw a healthy infusion of new residential launches in the first quarter of 2012. Locations like Somatne and Wagholi saw the maximum number of new residential launches in affordable housing segment. The precincts of Manjri and Wakad saw maximum residential launches for mid and high-end segments. A mood of cautiousness prevailed across the commercial real estate market of Pune in first quarter of 2012. An uncertain global economy coupled with the slowdown in Indian economy has resulted in a marginal reduction in demand for commercial real estate space across Pune. Pune saw an infusion of 5,00,000 sf of retail space in first quarter of 2012. The mall rentals across most micro
Source: Cushman & Wakeeld Research

Premium Ready Residential Property Values in March'12

6000 5000 4000 3000 2000 1000 0 5,000 4,563 5,380

5,125 4,389 4,000

Price (INR/sft)-March 2012

markets in the city did not see any fluctuations in the first quarter of 2012. Also, limited leasing activities have led to stable rentals across the main streets of Pune.

Trends & Updates

Ready Residential Property Update
The first quarter of 2012 saw the completion and handover of highend residential projects like Lunkad Sky Vie at Viman Nagar and Castel Royale Towers at Baner. The established residential micro markets of Aundh and Kalyani Nagar recorded an appreciation of 18% and 7.5% in capital values respectively in the high-end segment in the first quarter of 2012 compared to the previous. Similarly, Koregaon Park witnessed a slight appreciation of approximately 4% at the upper end of mid-range capital values.

Average Capital values High end (INR 000/Sq.ft.) Location Koregaon Park, Bundh Garden Aundh Kalyani Nagar Wanowrie
Source: Cushman & Wakefield Research Note: The above values for high segment typically include units above 1500 sq.ft.

2008 9.6-12.7 4.9-6.1 7.6-9.6 3.4-4.5

2009 8.5-10.7 5-5.2 7.3-9.2 3.3-3.6

2010 9-13 5-5.5 8-12 4-5

Q1 2011 9-13 5-6 8-12 4-5

Q2 2011 9-13 5-6 8-12 4-5

Q3 2011 9-13 5-6 7.5-12 4-5.5

Q4 2011 9-13 5-6 8-12.5 4-5.5

Q1 2012 9-13 6-7 8.5-13 4-5.5

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Average Capital values Mid range (INR 000/Sq.ft.) Location Koregaon Park, Bundh Garden Aundh Baner Wakad Kalyani Nagar Wanowrie
Source: Cushman & Wakefield Research Note: The above values for mid segment typically include units of 1,600-2,000 sq.ft.

2008 4.5-5 3.5-4 3-3.8 2.5-3 4.5-5.5 3-3.2

2009 4.5-5.5 3.6-4.2 2.9-3.6 2.2-2.8 4.5-5.5 2.8-3.1

2010 6-7 4-5 3.5-5.5 3.5-4 6.5-7 4-5.5

Q1 2011 6-7 4.5-5.5 3.8-5.5 3.5-4.2 6.5-7.5 4-5.5

Q2 2011 6-7 4.5-5.5 4-5.5 3.8-4.4 6.5-7.5 4-5.5

Q3 2011 6-7 4-5 4-5 3.7-4.5 6.5-7 4-4.7

Q4 2011 6-7 4.5-5.5 4-5.5 3.7-4.5 6.5-7.5 4-5.5

Q1 2012 6-7.5 4.5-5.5 4-5.5 3.7-4.5 6.5-7.5 4-5.5

New Residential Launches

Nearly 5,000 units consisting primarily of apartments catering to all segments were launched in the first quarter of 2012. Primarily located in the suburban and peripheral locations of the city, these
Project Name B.A. Vermont Marvel Cascada Developer Bhandari Associates Marvel Realtors Location Wagholi Balewadi Number of Units* 84 124 Area of Units 1BHK 675 sf 2BHK 885 sf to 978 sf 2BHK 1,370 sf 3BHK 1,920 sf 3.5BHK 2,610 sf 2BHK 765 sf to 790 sf 3BHK 965 sf to 1,245 sf 1BHK 585 sf to 597 sf 2BHK 810 sf to 1,015 sf 2BHK 795 sf to 982 sf 3BHK 1,221 sf to 1,608 sf 3BHK 1,450 sf to 1,800 sf 2BHK 1,059 sf to 1,200 sf 2.5BHK 1,321 sf 2BHK 1,102 sf to 1,128 sf 3BHK 1,395 sf to 1,402 sf 2BHK 1,060 sf to 1,175 sf 2.5BHK 1,400 sf to 1,475 sf 3BHK 1,502 sf to 1,550 sf 1BHK 600 sf 2BHK 900 sf 3BHK 1,400 sf 3BHK 2,393 sf to 2,683 sf 1.5BHK 950 sf 2BHK 1,075 sf to 1,330 sf 2.5BHK 1,445 sf 2BHK/3 BHK/4 BHK 1,015 sf to 1,630 sf 2BHK 1,075 sf to 1,110 sf 2.5BHK 1,190 sf to 1,280 sf 3BHK 1,480 sf to 1,550 sf Penthouse 2,170 sf to 2,490 sf 3BHK 12,000 sf 2BHK 820 sf to 1,110 sf

projects were launched at pricing levels almost similar to the pricing levels of projects launched in the previous quarter.

Forest Trail (Phase II) Suyog Nisarg Pure Homes Manjri Greens Annexe Park Titanium (Phase II) Sai Eshanya Avenair Elmwoods

Paranjape Schemes Construction Limited Suyog Development Corporation Ltd B.K. Jhala & Associates Pride Purple Group Manikchand- Vasudha JV Goldfinger Infra Ventures Pvt Ltd. Sukhwani Constructions

Bhugaon Wagholi Manjri Wakad Balewadi Wakad Pimple Saudagar

396 600 416 52 116 73 112

Daffodil Next

Sree Mangal Projects

Somatne

800

Meadows Mystique Elementa

Nagpal Group Akshar Group

Wagholi Wakad

24 1200

Florence Gini Viviana

Kolte Patil Developers Limited Gini Construction Pvt Ltd

Margosa Heights, NIBM Annexe Balewadi

190 226

Lagoona Woods Simpli-City (Phase II)

Sudarshan Developers B.K. Jhala & Associates

Near Temghar Dam Handewadi Road, Hadapsar

37 532

* Estimated and as per market information

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Under construction Residential Property Update

A slew of residential projects catering to the mid and high-end segments in suburban and peripheral like NIBM Road and Wakad are in advanced stages of construction. The micro markets of Hadapsar and Lulla Nagar has seen the completion of residential projects catering to the affordable segment. Construction activities have been noticed across the upcoming residential locations of Talegaon, Hinjewadi, Pimpale Saudagar, Wakad and Ravet.

Office
Approximately 55% Punes office space supply was in Special Economic Zones (SEZs) during Q1 2012. During the same period, the city recorded absorption of just over 7,00,000 sf. Absorption was highest in SEZs which accounted for 47% followed by the Software Technology Parks (STPs) and commercial non-IT office buildings, absorbing 38% and 15% of the office space respectively. Rentals across the city have been stable compared to the last quarter except for minor appreciation noted at approximately 3% in micro markets of Kharadi, Hadapsar and Hinjewadi.

Retail
The city saw an infusion of 5,00,000 sf of retail space in first quarter of 2012. With the rise in number of malls, a number of national and international brands have opened up their outlets in Pune. Some of the new retailers who have opened up their stores in the first quarter of 2012 include The Collective, LOccitane, Adolfo Dominique, Kitsch, Sukho Thai and Riva Lounge among others. Retailers have been in a better position to negotiate with the landlords/developers due to high supply infusion. Limited leasing activities across the main streets of Pune have led to stable rental values in the first quarter of 2012.

Outlook
Owing to a slew of residential projects in pipeline, the capital values in new developments are not likely to see any fluctuations in Pune. The demand from employees working in IT/ITeS sector is likely to keep the rental values high across micro markets located closest to offices catering to the sector viz., Baner, Aundh, Kharadi and Hadapsar. The city is likely to see an infusion of approximately 20 lakh sf of commercial space in the second quarter of 2012. With this infusion, the rental values are likely to remain stable across most micro markets in Pune. The city is likely to witness an additional supply of 7,00,000 sf of retail space in the second quarter of 2012 in the micro market of Hadapsar. The main streets of Pune like J.M. Road, F.C. Road and M.G. Road may witness some rental appreciation, due to lack of availability of quality space and continued enquiries from international brands looking to establish their presence in these micro markets.

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

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