Chennai Real Estate Outlook Report H1 2015 - Knight Frank India
-
Upload
eureka-forbes-ltd -
Category
Real Estate
-
view
216 -
download
2
Transcript of Chennai Real Estate Outlook Report H1 2015 - Knight Frank India
RESIDENTIAL MARKET IN CONSOLIDATION MODE
Will launches continue to spiral downward in Chennai?How are the premium locations faring in Chennai currently?Which is currently the healthiest residential market in South India?
NEW LAUNCHES DROP BY 20% Y-O-Y; DEVELOPERS RESTRICT NEW LAUNCHES
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
3,900
4,100
4,300
4,500
4,700 1
6,8
32
8,0
15
11
,37
7
7,3
18
9,1
02
14
,02
0
10
,42
4
10
,21
2
10
,34
3
9,0
91
4,208
4,354
4,407
4,528 4,532
Launches Absorption Wt. Avg. Price (RHS)
No
. o
f u
nit
s
INR
/sq
ft
77% OF NEW LAUNCHES BELOW INR 2.5 MN IN WEST
INR <2.5 mn 2.5-5 mn 5-7.5 mn 7.5-10 mn 10-20 mn 20-40 mn 80-150 mn0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Central North South West
HOWEVER, NORTH CHENNAI CONTINUES TO LANGUISH
5 6 7 8 9 10 11 12 13 5
6
7
8
9
10
11
Central North South West
QTS
Ag
e o
f In
ve
nto
ry
CENTRAL
SOUTH
WESTNORTH
SUPPLY AND DEMAND AT LOWEST LEVELS SINCE 2013, PRICE GROWTH HOWEVER REMAINS STRONG
2013 H1 2013 H2 2014 H1 2014 H2 2015 H10
100
200
300
400
500
600
700
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
52
6
21
3
15
1
42
0
13
8
59
6
39
8
34
2
37
5
14
7
10,206
11,308 11,448
13,279 13,495
Sum of New Launch Sum of Total Absorption Max of Prices
No
. of
un
its
INR
/ sq
ft
Launches Absorption Wt. Avg. Price (RHS)
PREMIUM SEGMENT FALLS VICTIM TO MARKET MALAISE
Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-150
1
2
3
4
5
6
7
8
9
QT
S
CHENNAI CITY
PREMIUM MARKET
OUTLOOK FOR THE NEXT 6 MONTHS
LAUNCHES (UNITS)
SALES(UNITS)
WEIGHTED AVERAGE PRICE
(INR/SQ FT)
H2 2014 7,318 10,343 4,528
H2 2015 E 6,439 10.420 4,596
GROWTH -12% 1% 1.5%
LAUNCHES- CHENNAI MAINTAINSITS POSITION
H1 2014 H1 2015
MUMBAI 35,512 18,887
NCR 35,500 11,360
BENGALURU 35,545 21,400
PUNE 16,883 12,762
CHENNAI 11,377 9,102
AHMEDABAD 9,021 8,062
KOLKATA 8,444 8,372
HYDERABAD 7,899 5,457
ABSORPTION - CHENNAI GOES UP AT5TH POSITION IN SALES
H1 2014
MUMBAI 31,210
NCR 28,500
BENGALURU 27,256
PUNE 14,719
AHMEDABAD 10,472
CHENNAI 10,315
HYDERABAD 7,282
KOLKATA 6,390
H1 2015
MUMBAI 28,446
BENGALURU 22,234
PUNE 15,524
NCR 14,250
CHENNAI 9,091
AHMEDABAD 7,751
HYDERABAD 7,123
KOLKATA 5,883
CHENNAI COSTLIER THAN NCR
H1 2012
H2 2012
H1 2013
H2 2013
H1 2014
H2 2014
H1 2015
H2 2015E
2,000
3,000
4,000
5,000
6,000
7,000
8,000
MumbaiNCRBengaluruPuneChennaiHyderabadKolkataAhmedabad
Rs
/sq
ft
MUMBAI
PUNE
AHMEDABADHYDERABAD
KOLKATA
NCR
BENGALURU
CHENNAI
CHENNAI AMONG THE BETTER PERFORMING MARKETS IN INDIA
5 7 9 11 13 15 17 195
7
9
11
13
15
QTS
Age
of
unso
ld in
vent
ory
in q
uart
ers
MUMBAI
PUNE
AHMEDABAD
HYDERABAD
KOLKATA
NCR
BENGALURU
CHENNAI
VACANCY LEVEL AT A 5-YEAR LOW - 17.9% DURING JAN – JUN 2015
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -
2
4
6
8
10
12
0%
5%
10%
15%
20%
25%
30%
24.4% 23.6%22.4%
18.9%
17.9%16.4%
Stock Occupied stock Vacancy
mn
sq
ft
DEMAND CONSISTENTLY OUTSTRIPPING SUPPLY SINCE 2014
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 ( E) -
0.5
1.0
1.5
2.0
2.5
3.0
1.7
2.5
1.5
1.1
1.6
1.1
2.4
1.8
2.2
2.0
New completions Absorption
mn
sq
ft
RENTAL GROWTH AT 3.1% DURING JAN – JUN 2015
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 ( E)40
42
44
46
48
50
52
43
4545
47
48
4950
INR/
sq ft
/mon
th
BANKING AND FINANCIAL SERVICES INCREASES SHARE; BNP PARIBAS, CITIBANK PICK UP SPACE
BFSI* IT/ITeS Manufacturing Other Services0%
10%
20%
30%
40%
50%
60%
13%
42%
25%
20%
14%
54%
15% 16%
26%
46%
15%13%
H1 2014 H2 2014 H1 2015
* INCLUDES SUPPORT SERVICES
ALL NUMBERS IN MN SQ FT
0.2
5
0.2
7
0.5
1
0.7
9
1.0
3
0.9
1
0.4
7
0.2
9
0.2
9
0.3
9
0.3
1
0.2
6
LACK OF LARGE FORMAT OFFICE SPACE PUSHES OCCUPIERS TOWARDS PERIPHERAL LOCATIONS LIKE SHOLLINGANALLUR
ONLY PERIPHERAL MARKETS SEE AN INCREASE IN ABSORPTION SHARE
CBD SBD PBD Ambattur SBD OMR PBD OMR & GST0%
10%
20%
30%
40%
50%
60%
18%
27%
1%
48%
6%7%
23%
4%
27%
39%
H1 2014 H1 2015
% S
ha
re
0.3
4
0.1
4
0.5
1
0.4
5 0.0
3
0.0
8
0.9
2
0.5
4 0.1
2
0.7
7
OUTLOOK FOR THE NEXT 6 MONTHS
NEW
COMPLETIONS (MN SQ FT)
ABSORPTION (MN SQ FT)
VACANCYWEIGHTED AVERAGE
RENT (INR/SQ FT/MONTH)
H2 2014 1.1 2.2 18.9% 49.5
H2 2015E 0.7 2.4 15.6% 51
GROWTH -39% 6% 3%
VACANCY IN CHENNAI THOUGH REDUCING, IS STILL THE HIGHEST AMONG IT / ITeS DRIVEN MARKETS
Mumbai NCR Bengaluru Pune Chennai Hyderabad -
1
2
3
4
5
6
7
0%
5%
10%
15%
20%
25%22%
21%
8%
15%
18%16%
New completions Absorption Vacancy (RHS)
mn
sq
ft
H1 2015
AT 3%, CHENNAI EXPERIENCED THE WEAKEST RENTAL GROWTH DURING JAN – JUN 2015
CHENNAI
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -15%
-10%
-5%
0%
5%
10%
15%
20% Mumbai NCR Bengaluru Pune Chennai Hyderabad
Gro
wth
in R
enta
ls
AVERAGE DEAL SIZE 3RD LARGEST AFTER BENGALURU & PUNE
Mumbai NCR Bengaluru Pune Chennai Hyderabad -
20,000
40,000
60,000
80,000 2
1,43
0
25,
622
71,
577
21,
434
24,
520
24,
702
23,
291
21,
872
54,
253
40,
773
34,
507
18,
585
H1 2014 H1 2015
sq f
t
RESIDENTIALCHENNAIRESIDENTIAL MARKET IN A CONSOLIDATION PHASE; DEVELOPERS RESTRICT NEW LAUNCHES ON THE BACK OF STEADY SALES
OFFICECHENNAIRECOVERING – DWINDLING OFFICE SUPPLY AND STEADY DEMAND DRIVE RENTAL GROWTH
KEY TAKEAWAYS