City Report - Bangalore Market Overview 2009

CITY REPORTBANGALORE MARKET OVERVIEW

2009

CITY REPORTBANGALORE MARKET OVERVIEW - 2009

Summary p. 3

Bangalore Map p. 4

Bangalore Commercial Market p. 5

i) Overview p. 5

p. 5

p. 8

ii) Micro Market Description

p. 9

iii) Outlook

p. 10

Bangalore Retail Market p. 12

v) Major Projects Under Construction

p. 12

vi) Major Transactions

p. 12

CONTENTS

iv) Major Projects Completed

p. 11

i) Overview

ii) Micro Market Description

p. 14iii) Key Projects Completed

p. 15v) Key Transactions

p. 16Bangalore Residential Market

p. 16i) Overview

p. 16ii) Micro Market Description

p. 17iii) Major Projects Under Construction In 2009

p. 18Glossary

p. 14iv) Key Projects Under Construction

3I I

SUMMARY

The commercial market witnessed highest number of completions along the Outer Ring Road in the secondary business district. The overall Grade A commercial developments in 2009 crossed the total completed figures of 2008 signifying the initial signs of revival. The infrastructural development like the Traffic and Transit Management centres, flyovers and ongoing metro construction in the CBD and the SBD are expected to boost leasing activities in these micro markets in 2010.

In the Bangalore Retail Market, expansions in secondary high streets were more active as compared to under construction malls and primary high streets. This was largely on account of limited availability of ready to occupy stores in newly launched malls and vacant properties at reasonable rates on primary high streets. Limited budget for expansion and delay in mall completions, encouraged the retailers to opt for reasonable yet lucrative secondary micro-markets.

The Bangalore Residential market witnessed limited number of newly launched projects across the micro markets during 2009 because the developers postponed the launch of their projects on account of ample availability in under construction projects. The concept of budget apartments where in the total Built Up Area (BUA) for apartments varied from 950 sq ft to 1,050 sq ft gained popularity in the Peripheral Business Districts. For the year 2010, it is expected that the completion of flyovers, elevated highways and complementary commercial and retail projects will boost the demand for Residential Real Estate in Secondary and Peripheral micro-markets.

Bangalore Real Estate Market


BANGALORE MAP

4I ICITY REPORTBANGALORE MARKET OVERVIEW - 2009

Coce urs ada e RoR Race

Course

RajBhavan

VidhanSoudha

HighCourt

CubbonParkChikpete Rd

Kastur

ba Rd

ShanthalaNagar

nroa yh oM R

Rd

Brig

ade

Rd

RichmondTownLangford Rd

WHITEFIELD

Hudi

Brigade TechPark

Whi

tefie

ld

Whitefield Rd

Rd

Bela

tur

Rd

Belatur

Kodugodi

Whitefield

Kodugodi RdStation Rd

BhattarahalliRd

Domsandra

Sadarmangal

1 M

ain

Rd

2 Main Rd

Borewell Rd

Vartur Rd

VarturKere

Vartur

Adarsh PalmRetreat

Vartu

r Rd

Channapanhalli

Southern Railway

Vartur Rd

Marattahalli

InnovativeMultiplex

Outer R

ing Ro

ad

Soul Space

Bellandur

BellandurTank

Salarpuria Softzone

Vimanpura

HAL

LB ShastriNagar

Suranjaindas RdAirport Road

Outer Ring Road

DoddaNekkundi

C V RamanNagar

Old Madras Rd

IndiraNagar

Kodihalli

UlsoordR dnohmicR dVic Rt o ri a

MG Road

Cantonment

Cubbon Rd

ChinnaswamyCricketStadiumSeshadri Rd

KSRTCBus Terminal

Majestic

Chikpete

Elevated RdVictoria

UrvashiAlbert Victor Rd

K R

Road

Bull Temple Rd

Basavangudi

LalBagh

Lal Bagh Fort Rd

UlsoorLake

Whe

eler

Rd

Jayamahal Rd

Munireddypalya

Mattadahalli

Ram

anam

ahar

ishi

Rd

Bella

ry R

d HebbalNagavara

Nag

avar

a M

ain

Rd

Hennu

ru M

ain Rd

Hennuru

Outer Ring Road

Old Madras Road

Krishnarajapura

RamamurthyNagar

YellarnallappachettyKere

Chikkabanhalli

Old Madras Rd

Whitefield Rd

Devasandra

BhattarahalliAnandapuram

BangaloreHALAirportGolf

Course

Chamarajpet

Kormangala

Sarjapur Rd

Outer Ring Road

HSR LayoutBTM Layout

Bann

ergh

atta

Rd

South End Rd

Outer Ring Road

Banashankari

dR arupka naK

Uttarahalli

lli RdaharattU

Malleshvaram

Chor

d Rd

West ofChord Rd

Pineline Rd

Magadi Rd Chor

d Rd

Link Rd

Magadi Rd

Uni

vers

ity R

d

Hegganahalli

dR illahanaggeH

Bangalore CityRailway Station

Lottegollahalli

Lottegollahalli

Mattikere

Yashvantpur

Bel Road

HebbalKere

Esteem Mall

NagavaraKere

CoxTown

Hosur RdKana

kpur

a Rd

Chandrapura

Madurai

Begur

Begu

r Rd

Kudlu

Kudlu Rd

NH-7

Bann

ergh

atta

JPNagar

MandivalaTank

MandivalaAgaraKere

Jayanagar

adoR erosyM

Chor

d Rd

Magadi Rd

BangalorePalace

Bommanahalli

Marigowda Rd

HosakerehalliKere

dR illU ahattar

Vasantpura Rd

DoddaKalsandra

Kana

kpur

a

dao R att a ghcnuhC

Electronic City

Kambipura Rd

Mysore

Road

Southern Railw

ayBangaloreUniversity

University Rd

TajWestend

JayamahalPalace

Karirobanhalli RdPeenya

YeshvantpurSuburb

Tumkur Road

NH-4

C V Raman Rd

Old Tumkur Rd

Bupasandra Rd

Jalahalli

Kodigehalli RdBELDefenceColony

Byatarayanapura RachanaHalliKere

Bella

ry R

dAgrahara

Bella

ry R

d

YelahankaNew Town

Dod Ballapur RdHindupur

Southern Railway

YelahankaKere

BangaloreInternationalAirport

Hyde

raba

d

Harohalli

dR urtpnvashYe

NH-7

ChikkaBommasandra

Rajiv GandhiNagar

KodigehalliKere

KodigehalliSouthern Railway

Banaswadi

idawsanaBB Channasandra

NH-4

KrishnarajaPuram

Channasandra

BaiyyappanaHalli

dR illahnamaK

dR illahalaJ

Chikka B anavar Rd

Southern Railway

Bagalakunte

NH-4

Sarjapur Rd

ChikkaNayakamahalli

Salem

Anek

al

NH-4

NH-4

BangaloreEast

Major Roads

Roads

River / Water Bodies

Park / Green Area

Railway Station CBD

SBDPBD

Airport

Outer / Ring Road

Inner

N

403, The Estate,121, Dickenson Road


BANGALORE COMMERCIAL MARKET

The Bangalore office market witnessed continuous increase in supply of Grade A buildings along all the micro-markets across the four quarters of 2009. The total supply in 2009 was approximately 9.20 mn sq ft as compared to 5.19 mn sq ft in 2008. The largest amount of completion was recorded along Outer Ring Road stretch while the CBD also significantly contributed to Grade A stock as compared to 2008.

In the year 2009, the rental and the capital values increased in the range of 1.4%-15% and 2.9%-10.2% respectively across the micro markets except in Electronic City, while the vacancy rates were also significantly high across micro markets as compared to 2008. The average vacancy rate in CBD stood at 1.8% while in SBD and PBD it was marked approximately at 8.5% and 17% respectively in 2009.

i) Overview

Supply & Vacancy TrendThe CBD witnessed completion of 0.53 mn sq ft with six new developments over the four quarters of 2009 as compared to almost non-existent supply of Grade A buildings in year 2008. On account of significant addition to Grade A stock, the vacancy rate closed at 1.8% in 2009 while it remained as low as 0.1% in 2008. With the high demand in CBD we expect the vacancy rates to reach near zero levels. In 2009 the total volume of transactions was approximately 0.41 mn sq ft in the CBD of which about 0.13 mn sq ft (31.71%) was taken up in the fresh supply (new development), while the remaining was taken up in second generation buildings. This constituted of three large sized transactions and couple of small and medium-sized transactions in the range of (~8,000 to 15,000 sq ft).

Rental & Capital ValuesDespite the increase in vacancy rate in this micro-market, the average rentals of Grade A buildings marginally increased by 4.29% from INR 70/sq ft/month in 1H 2009 to INR 73/sq ft/month in 2H 2009, signifying improvement in the market scenario on account of increased number of inquiry for spaces in CBD. The y-o-y change in the rental values was insignificant as it increased by ~1.39% in 2009 from 2008. The y-o-y decrease is on the account of decrease in rentals during 1Q 09. The capital values also increased marginally by 4.28% from INR 7,200/sq ft in 1H 2009 to INR 7,508/sq ft in 2H 2009, while the y-o-y increase was approximately 2.85%.

Infrastructure DevelopmentIn addition to the ongoing metro project, Traffic and Transit Management Centre is proposed at the India Express circle in CBD, in order to promote public transport which in turn is expected to reduce the traffic congestion in CBD. . These public infrastructure developments along with the development of two 5 Star Hotel projects is expected to push up the rental values in future, on account of greater demand which is expected in the quarters to come.

5,0005,1005,2005,3005,4005,5005,6005,7005,8005,9006,000

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Rental & Capital Values

ii) Micro Market Descriptiona) Central Business District (CBD)

6I I

Supply & Vacancy TrendThe SBD continued to be the most preferred location for occupiers due to sufficient supply of Grade A buildings at competitive prices, capacity to serve affordable residential requirement and supporting public infrastructure to enhance its connectivity to the entire city.

The total new completion of Grade A buildings in SBD was approximately 5.67 mn sq ft in 2009 of which 4.18 mn sq ft was delivered in 1H 2009. Compared to 2009 the total Grade A office supply in 2008 was approximately 3.86 mn sq ft. Most of the completions in 2009 were along the eastern stretch of outer ring road (Marathahalli – Sarjapur). On the other hand Koramangala, Old Airport Road and 100 Ft Indiranagar had very limited supply of Grade A buildings in 2009, but had significant supply of Grade B mixed use projects (viz. office and retail), which help in maximizing the project's overall rental returns.

The vacancy rate significantly increased and stood at 7.5% by the end of 2009 as compared to 0.1% in 2008. This marginal increase in the vacancy rate was on account of increased supply in 2009 and fall of few major deals that were concluded in 2008.

The total volume of transaction in SBD was the highest as compared to other micro-markets and stood at 3.15 mn sq ft in 2009. SBD recorded the highest number of transactions on account of availability of operational Business Parks and SEZ.

Rental & Capital ValuesThe average rental value in the SBD significantly increased by 12.5% from INR 40/sq ft/month in 1H 2009 to INR 45/sq ft/month in 2H 2009, which was on account of increased demand for office space in this micro-market. The y-o-y rental value also witnessed a positive change of approximately 12.5% from 2009 to 2008 on account of increased number of activities in this location, similarly the capital value also increased marginally by 10.2% from INR 4,000/sq ft during 1H 2009 to INR 4,409/sq ft by 2H 2009.

Infrastructure DevelopmentIn order to decrease traffic congestion and travel time to these micro-markets, Traffic and Transit Management centers are being developed in Kormangala, Old Airport road, Bannerghatta road and Jayanagar. Adequate public infrastructure accompanied by adequate supply at reasonable commercials is expected to continue attracting occupiers to these locations.

b) Secondary Business District (SBD)

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c) Periphery Business District (PBD)

Supply & Vacancy TrendThe market in the Whitefield area of PBD picked up during 2009, as significant number of medium to large sized spaces were taken up. The availability of new commercial developments with larger floor plates at rentals much lower than other micro-markets attracted occupiers with larger space requirement.

The total supply of Grade A buildings in Whitefield was approximately 2.73 mn sq ft in 2009 as compared to just 0.74 mn sq ft in 2008. With the increase in the supply in Whitefield, the vacancy rate also stood as high as 15.1%. while the rental values On the other hand the supply in Electronic City halved in 2009 as the addition in 2009 was close to 0.28 mn sq ft as compared to addition of 0.59 mn sq ft in 2008. The vacancy rate increased from 21.1% to 24.1% on account of slower leasing activities due to lack of proper access roads and limited supply of new Grade A developments.

Rental & Capital ValuesThe rental values in Whitefield rose by approximately 15% from INR 26/sq ft/month in 1H 2009 to INR 30/sq ft/month in 2H 2009. The increase in rental values was on account of addition of new projects in PBD which are in proximity to the SBD, thus offering competitive space. The capital value also showed an upward movement as it increased from INR 2,400/sq ft in 2008 to INR 2,555/sq ft in 2009 (+6.45%).

The rental and the capital value in Electronic City remained stagnant at INR 23/sq ft/month and INR 2,300/sq ft respectively throughout 2008 and 2009.

Infrastructure DevelopmentThe ongoing construction of elevated highway from Silk Board junction to Electronic City was finally completed in January 2010 which dramatically reduced the travel time to Electronic City by reducing the traffic congestion on this stretch. Apart from this, no major infrastructure developments were witnessed in the PBD.

8,0009,000

10,00011,00012,00013,00014,00015,00016,00017,00018,000

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8I I

A total of 0.3 mn sq ft of fresh Grade A supply is lined for completion

in 2010 in CBD. The early signs of revival in the market coupled with

addition in fresh stock are expected to bring in further momentum

in the leasing activities.

iii) Outlooka) Central Business District (CBD)

In 2010, Whitefield area is likely to witness supply of approximately

6.62 mn sq ft while Electronic City is expected to add approximately

1.15 mn sq ft to Grade A buildings. Activities in Electronic City are

accepted to gain momentum from 1Q 2010, with the completion of

elevated highway and adequate supply of Grade A developments in

the micro-market.

b) Secondary Business District (SBD)The year 2010 is expected to have fresh Grade A supply of ~4.54 mn

sq ft with approximately 2.55 mn sq ft being on the eastern stretch

of Outer Ring Road. The eastern stretch of outer ring road is

expected to become the preferred location for commercial

occupiers on account of the availability of large land parcels

suitable for commercial development, its capacity to manage

corresponding residential requirement at affordable rates and the

construction of fly over which would significantly reduce traffic

congestion.

c) Periphery Business District (PBD)



iv) Major Projects Completed

Property Location Micromarket

Total built uparea (sq ft)

Completiondate

Major Projects Completed

Prestige Nebula (Block 1) Cubbon Road CBD 61,300 Q1 2009

SBDPri Tech (Block 6 & 7) Sarjapur- Outer RingRoad

18,00,000

Global Technology Place Outer Ring Road SBD 2,08,000 Q4 2009

Gopalan Global Axis Whitefield PBD 12,00,000 Q2 2009

Q2 2009

Salarpuria Cambridge Mall(Commercial Space) CBD Q1 2009Cambridge Road 1,20,000

The Residency Residency Road CBD 1,20,000 Q4 2009

Prestige Dynasty Ulsoor Road CBD 1,23,286 Q4 2009

Baghmane WorldTechnology Centre Block I Outer Ring Road SBD 4,50,000 Q2 2009

Vaishnavi Solitare Sarjapur-KormanagalaRoad

1,10,000 Q3 2009SBD

SBDEmbassy Manyata (C1,F2) Hebbal Outer RingRoad

10,66,000 Q2 2009

Embassy Manyata (L5) Hebbal Outer RingRoad

3,82,000 Q3 2009SBD

Kalyani Magnum (Phase II) Outer Ring Road SBD 4,20,000 Q4 2009

Adarsh SEZ (HonneywellBlock) Sarjapur ORR SBD 5,05,000 Q2 2009

Gopalan Global Axis Whitefield PBD 6,00,000 Q4 2009

Embassy Paragon Whitefield PBD 4,00,000 Q2 2009

Sri Ranga IT Park Electronic City PBD 1,20,000 Q2 2009

10I I

v) Projects Under Construction

Property Location Micromarket

Total built uparea (sq ft)

Projects Under Construction

Cosmo Lavelle CBD 1,50,000 Q2 2010

Source: BNP Paribas Real Estate, India

Completion date( expected )

Lavelle Road

Vaswani Centropolis Q4 2010CBD 1,63,000Langford Town

Salarpuria Triton CBD 50,000 Q1 2010Off KH Road

North Star SBD 11,00,000 Q1 2010Malleshwaram-Rajajinagar

Prestige EXORA (SEZ) Phase-1 SBD 7,00,000 Q2 2010Outer Ring Road

Sigma Grand SBD 5,00,000Outer Ring Road Q4 2010

Vrindavan Tech Park Phase II SBD 6,00,000 Q2 2010Outer Ring Road(Eastern Stretch)

Embassy Manyata IBM Block-G1 SBD 4,00,000Hebbal Outer Ring Road Q1 2010

Embassy Manyata NSN Block-L6 SBD 3,82,000 Q4 2010Hebbal Outer Ring Road

Adarsh SEZ (Multitenanted) SBD 5,00,000 Q2 2010Sarjapur ORR

Corporate Centre PBD 4,72,000 2010Whitefield

Prestige Shantiniketan PBD 31,00,000 Q1 2010Whitefield

Brigade Metropolis Summit 2 PBD 5,88,000 Q2 2010Mahadevpura - Whitefield

Bhoruka IT Park Phase II PBD 4,23,000 Q3 2010Whitefield

Bearys Global Research Triangle PBD 12,50,000 Q1 2010Whitefield Ashram Road

Harita IT Park Block I PBD 3,85,000 Q1 2010Electronic City - Phase 1

Fortune Tech Park PBD 3,50,000 Q2 2010Electronic City - Phase 1


11I I

Tenant Property Micromarket

Size(sq ft)

Major Transactions

Source: BNP Paribas Real Estate, India

vi) Major Transactions

District Year

Serco BPO Prestige Libra CBDLalbagh Road 55,000 Q2-Q3 2009

Citrix Systems Prestige Dynasty CBDUlsoor Road 1,27,000 Q4 2009

Northen OperatingServices

Manyata Embassy Business Park SBDOuter Ring Road 1,24,166 Q1 2009

Nokia SiemensNetworks

Manyata Embassy Business Park SBDOuter Ring Road 6,45,000 Q1 2009

Cisco Prestige Cessana Business Park SBDSarjapur ORR 2,60,000

Colt Telecom Manyata Embassy Business Park SBDOuter Ring Road 36,000 Q2-Q3 2009

Indegene Embassy Golf Links Business Park SBDInner Ring Road 26,000 Q2 2009

TESCO NR Enclave PBDWhitefield 1,30,000 Q3 2009

Q2 2009

LSI Logic Global Technology Place SBDSarjapur ORR 2,50,000 Q4 2009

IBM Manyata Embassy Business Park SBDOuter Ring Road 4,00,000 Q1 2009

DigiCaptions Embassy Golf Links Business Park SBDInner Ring Road 29,000 Q2-Q3 2009

Educomp Solutions HM Vibha Towers SBDKoramangala 34,700 Q1 2009


BANGALORE RETAIL MARKET

The year 2009 saw measured activities from the developers as the retailers preferred secondary high streets over the under construction malls. This resulted in developers delaying the completion of malls under construction which subsequently delayed the completion timelines of these projects.

The slow moving strategy adopted by retailers during 2009 led many mall developers to postpone their project completion in 2010. Hence the total supply of malls remained close to 1.11 mn sq ft in 2009 which denotes only 50% of the total expected supply for 2009. The total mall supply in 2008 was only 0.52 mn sq ft across all micro markets which helped developers command the lease terms on the back of high demand from retailers. Although 2009 did not witnessed major activities in the mall market, the high street market saw initial signs of revival with emergence of new secondary high streets across the city.

Less availability of the ready built space in malls and emergence of high streets has stabilized the rental values which have shown only a marginal increase.

i) Overview

Supply & Vacancy TrendThe Bangalore shopping centre witnessed fresh supply of approximately 0.41 mn sq ft and 0.35 mn sq ft in the secondary and the suburban micro-market respectively in 2009 as compared to supply of 0.15 mn sq ft and 0.37 mn sq ft in the primary and secondary micro-market respectively during 2008. The addition of fresh stock in 2009 was less as compared to the expected figure, since the developers delayed the launch of projects on account of implied effects of credit crunch and slowdown in the global market.

Retail Market SentimentThe retailers showed less interest in signing up spaces in under construction malls as their funds were blocked in the mall projects that were already delayed. The limited availability of retail space in operational malls and higher mall rentals as compared to most of the high streets increased the retailer's interest towards emerging secondary high streets. Retailers were encouraged to expand in these micro-markets as they could immediately start operations there and gain on first mover advantages like location preference, reasonable rentals and potential but untapped market. One the other hand, vacancy rates in the operational malls remained low to the tune of 1.5% because of the limited supply across micro-markets.

A drop of 5% and 1.69 % was observed in rental values in primary and secondary micro markets respectively over 2008-09. Willingness of developers of operational malls to lease the limited vacant spaces at a discounted price was the prime reason for this y-o-y decline.

OutlookThe Bangalore Mall Market is expected to witness completion of 3.59 mn sq ft in the secondary and the suburban micro-market, of which nearly 3.1 mn sq ft is expected in the secondary micro-markets of Bannerghatta road, outer ring road (eastern stretch) and Malleshwaram. Even though a significant larger supply is piling up in comparison to the previous year, retailers are not expected to cannibalize on their sales-per-foot in the medium to long term as this supply would be catering to different residential catchment scattered across the city.

The eastern stretch of outer ring road (Mahadevpura - Sarjapur ORR) also witnessed launch of two major hypermarkets totaling to approximately 0.09 mn sq ft in 4Q 2009. Availability of large land parcels suitable for mixed use development anddensely populated surrounding areas have made this micro-market a lucrative location for large retail formats.

Competition from the emerging high streets is expected to keep the mall rentals range bound and an increase in Mall rental values is not expected over the next two years.

ii) Micro Market Descriptiona) Shopping Centre

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Primary Secondary


b) High Street

Supply & Vacancy TrendOwing to the limited supply and high rental values in operational and under construction malls, high streets remained preferred business location for retailers.

High Street Market SentimentThere were signs of increased sentiment of retailers in the secondary high streets of DVG Road (Banashankhari), Kamanahalli Main road, New BEL road and Jayanagar (9th Block) , but business on primary high streets of Indiranagar 100 Ft Road and CMH Road temporarily slowed down on account of ongoing Metro construction.

OutlookNew emerging high streets are expected to retain retailer's interest on the account of favorable lease terms, readily available space and favorable residential catchment. . Demand for the retail space to the tune of 750 – 1,000 sq ft is expected to remain buoyant in high streets over a medium to longer term. Affordable rentals and thick residential catchment which have attracted the retailers are further expected to increase the momentum of activities in these emerging secondary high streets during 2010. The rental levels on the high streets are expected to remain range bound for next six months. Increased retailer activity is expected to continue on the primary high streets of Indiranagar 100 ft road and CMH road after the completion of Metro link in these micro markets.


High street Micromarket

Rental values(2009)

Commercial Street CBD 180MG Road CBD 200Brigade Road CBD 150Indiranagar 100 Ft Road CBD 100Koramangala 80 Ft Road CBD 70Jainagar 4th Block CBD 120Marathahalli (Home stopjunction)

SBD 100

Vitthal Malya Road SBD 120Sampige Road SBD 60

14I I

iii) Key Projects Completed

Property Location Total built uparea (sq ft)

Completiondate

Key Projects Completed

Micromarket

Forum Value Mall CompletedWhitefield 7,63,000 PBD

Banngalore Central JP Nagar 2,50,000 CompletedSBD

Gopalan Arch Mall Raj Rajeshwarinagar 1,63,000 CompletedSBD


iv) Key Projects Under Construction

Property Location Total built uparea (sq ft)

Completiondate

Key Projects Under Construction

Mantri Mall Malleshwaram 9,00,000 Q1 2010

Micromarket

SBD

Royal Meenakshi Mall Q2 2010Bannerghatta Road 3,70,000 SBD

Soul Space Spirit Marathahalli - Sarjapur ORR 2,00,000 Q4 2010SBD

Brigade Orion Q4 2010Rajkumar Road 11,00,000 SBD

Gopalan Innovation Mall Bannerghatta Road 1,80,000 Q1 2010SBD

Signature Shopping Mall Q4 2010Old Madras Road 3,05,000 SBD

The Arcade (BrigadeMetropolis)

Whitefield Road 80,000 Q2 2010PBD

Forum Shantiniketan Q4 2010Whitefield Road 4,50,000 PBD

15I I

v) Key Transactions

Tenant Property Total built uparea (sq ft)

Key Transactions

More Hypermarket Stand Alone Mahadevpura 60,000

Marks & Spencers Mantri Mall Malleshwaram 35,000

Location

Star India Bazaar (Tata Trent) Royal Meenakshi Mall Bannerghatta Road 60,000

Taco Bell Mantri Mall Malleshwaram 3,500

Reliance Trends Mantri Mall Malleshwaram 25,000

Reliance Footprints Mantri Mall Malleshwaram 6,000

Reliance Digi Mantri Mall Malleshwaram 18,000

Reliance Timeout Mantri Mall Malleshwaram 18,000

Reliance Home Mantri Mall Malleshwaram 21,000

Showoff Mantri Mall Malleshwaram 17,000

Odessy Books Mantri Mall Malleshwaram 9,500

Kalanjali Mantri Mall Malleshwaram 7,000

Prestige Manstore Mantri Mall Malleshwaram 6,500

Health & Glow Mantri Mall Malleshwaram 6,000


16I I

BANGALORE RESIDENTIAL MARKET

Low lending rates coupled with ample supply across the micro markets has increased the demand for the residential condominium segment across secondary and peripheral markets of Bangalore. On account of low supply and high demand, premium apartments commanded high absorption rates in primary micro market of Bangalore.

Capital Values have not shown significant increase across all the micro markets, as was witnessed in early 2006-07.

i) Overview

Supply & Vacancy TrendAbsorption in primary micro market is not a major function of lending rates and primarily the demand in this micro-market is derived from the High Income Group (HIG) or elite class. Also the sale of apartments in this micro market is through exclusive invitation of the focused clientele by the developers.

Capital ValuesCapital values in primary micro market are in the range of INR 9,000 per sq ft – INR 11,000 per sq ft in the CBD. The price may vary depending on the location and neighborhood of the project. However due to the recent economic depression the rentals are also at an all time low in this market. Many developers have postponed the launch of their projects in these areas due to unavailability of funds and vacant stock of completed projects.

ii) Micro Market a) Primary Residential Market

Description

Supply & Vacancy TrendAmple supply, increased absorption in old projects and competitive pricing kept the capital values range bound. There has been less number of new projects launched because of the huge vacant stock in under construction projects.

b) Secondary Residential Market

c) Peripheral Residential Market

Supply & Vacancy TrendHuge stock under completion and slow absorption rate kept the capital values at bay. At present there are approximately 15,000 apartments under construction in peripheral micro markets of Bangalore.

Capital ValuesDevelopers are also considering launch of budget apartments in peripheral locations due to low land prices. The typical built up area of these apartments vary from 950 sq ft to 1,050 sq ft.

We expect the Capital values to show a downward momentum in shorter term till the demand supply balance is attained. No new projects are expected to launch in a short to medium term. With the completion of the Elevated Expressway on Hosur Road, the travel time has reduced dramatically to Electronic city and this may help increase the demand for residential properties in this micro market. The demand is also expected to rise in and around Bannergatta Road and Whitefield area as the developers have resumed the construction of malls which were put on hold due to lack of investor interest and funds.

Capital ValuesMicro market of RMV in North Bangalore has seen an increase of 10% in capital values over 2008, while the capital values in other locations of the city were stagnant.

Many developers are waiting to clear the vacant stock before they launch any new project and are aggressively marketing their projects and wooing customers with special offers and rates. The high vacancy in this market was due to fewer developments as the developers abstained from taking up any new commercial as well as retail projects. The construction of flyovers and metro in the secondary micro market thus causing chaotic traffic jams is another reason for high vacancy as the buyers are waiting for the work to get over or reach completion before they take possession of their dream homes.


CITY REPORTBANGALORE MARKET OVERVIEW - 2009 17I I

Project Developer Location Size(sq ft)

Major Projects Under Construction In 2009

iii) Major Projects Under Construction In 2009

Number ofapartments

Micromarket

Gold Opus Gold Developer 14Millers Road 3,000 Each CBD

Nitesh Camp David Nitesh Developers 125Frazer Town 1,250 Each CBD

Vaishnavi Nakshatra Vaishnavi Group 64Yeshwantpur 1,195 &1,699Each

SBD

Smondoville Patel Reality 400Electronic City 360 to 1,350Each

PBD

HiranandaniUpscale

Hiranandani Upscale 300Bannerghatta Road 1,265 to 2,061Each

PBD

Gold Towers Gold Developers 194Hennur Main Road 1,800 to 2,800Each

PBD

GLOSSARYAbsorption:

Bare Shell:

BPO:

BUA:

CBD:

SBD:

PBD:

Completed Stock:

DU:

EPIP:

FAR:

Grade A:

Ground Coverage:

Hard Option:

INR:

Pre-lease:

Speculative Stock:

Stock:

Supply:

Tier I Cities:

Tier II Cities:

Transaction Volumes:

Vacancy:

Warm Shell:

Q on Q:

y-o-y:

IT:

ITES:

ORR:

Repo Rate:

Reverse Repo Rate:

SEC A, B, C & D Socio:

Sq.ft:

Stamp Duty:

Occupied Stock (n) – Occupied Stock (n-1); Where “n” is the specified period (quarter, year etc.)

Premises consisting of basic structure with lifts, power supply to junction box, water supply line, toilets

Business Process Outsourcing

Built up area

Central Business District

Secondary Business District

Periphery Business District

Either the building has received occupancy certificate or the client has moved in and occupied space and started working in a particular premises

Dwelling Unit

Export Promotion Industrial Park

Floor Area Ratio (BUA/ Plot Area)

Space Office Space with efficiency in excess of 75%, floor plate in excess of 15,000 sq. ft., Car Parking ratio of atleast 1 per 1000 sq. ft., Floor-to-ceiling height in excess of 3.75 m, Power provision of 1.25KVA per 100 sq. ft. with 100% power-backup wherever applicable and professionally managed facilities

It is the total covered area on ground by the built component and is expressed as a percentage of the plot area

Real estate space reserved by the lessee for future occupation within a particular time frame and at a pre-decided rental

Indian National Rupees

Space committed for lease before completion of construction

The stock which can be leased and excludes Built-to-Suit (BTS) and Campus facilities.

Cumulative Supply

New construction in a particular specified period

NCR, Mumbai and Bangalore

Chennai, Hyderabad, Pune, Kolkata

Total number of transaction in a particular specified period

Total vacant space in the completed stock

Premises consisting of power backup, high side A.C., common area fit outs and fitted out toilets

Quarter on Quarter

year-on-year (All growth figures in this report are y-o-y unless otherwise mentioned

Information Technology

Information Technology Enabled Services (includes various services ranging from call centres, claims processing, medical transcription, e-CRM, SCM to back-office operations such as accounting, data processing, and data mining)

Outer Ring Road

Rate that an eligible depository institution (such as a bank) is charged to borrow short term funds directly from the central bank through the discount window

Interest rate that a bank earns for lending money to the Reserve Bank of India in exchange for government securities

Economic Classification; SEC A represents the highest propensity to spend and SEC D represents the lowest propensity to spend.

Square Feet

Form of tax charged on instruments (written documents) requiring a physical stamp (for government legality) to be attached to or impressed.

Mn:

New:

Major Refurbishment:

Million

Building built within the last 5 years.

Building which has undergone structural alteration less than 5 years ago, subject to planning permission.

Recent:

Renovated:

Modern:

Old:

CCI (Cost of construction index):

Demand:

For the occupier:

New Supply:

Completed new supply:

Under construction:

Planning permission granted:

Planning permission submitted:

Pre-letting:

Headline rent:

Average headline rent:

Underlying rent:

Prime rents:

Top rent:

Second hand premises:

Renovated:

Very good condition:

Existing state of repair:

To be renovated:

Supply available within 1 year:

Take-up:

Vacancy rate:

Building less than 10 years old.

Building which has undergone renovation work not requiring for planning permission less than 5 years ago.

High-performance building over 10 years old.

Low-performance building over 10 years old.

Index that makes quarterly measurements of construction prices for new house building. It is the price after VAT paid by the owner to construction companies. It excludes land-related prices and costs (site development, special foundations, etc.), fees and financial costs.

A search for premises expressed to BNP Paribas Real Estate. The analysis pertains only to the flow of new demand expressed.

Operation undertaken by an occupier for its own purposes.

Any new building and/or heavily refurbished building that adds to the existing stocks. These are analysed according to progress.

Buildings on which construction work is finished.

Buildings on which construction has effectively begun. Prior demolition work is not taken into account.

Authorisation to build obtained, generally booked after settlement of third party claims.

Planning permission requested, being processed.

Transaction by an occupier more than 6 months before the delivery of the building.

Annual rent per square meter, featured on the lease, and expressed excluding taxes and charges. Does not include attached premises such as parking areas, archives, staff canteens, etc. If the rental is progressive, the value applied is the average for the first 3 years or the fixed term of the lease.

Weighted average of rented area. The average featured is a moving average over 3 quarters, to smooth out the changes.

Annual rent per square meter expressed free of tax and charges and excluding advantages agreed by the owners (rent incentive building works, etc).

Represents the top headline rent (excluding non significant transactions) for an office unit:- of standard size, of the highest quality and specification, in the best location in each market.

Represents the top headline rent for an office unit. It is not necessarily a prime rent.

Premises that have been previously occupied by an occupier for vacant for more than 5 years.

Premises that have been renovated for the new occupier.

High-performance premises of high quality.

Low-performance premises that can be rented as they are.

Low performance premises that need renovation.

All premises and buildings available within 1 year including the supply available immediately, new supply that has not been pre-let and second hand supply that will be vacated definitively (notable terminated leases).

Rental or sale of a property asset, finalised by the signature of a lease or a bill of sale including turnkey transactions and owner-occupier. The transaction is only taken into account once any existing conditional clauses have been lifted.

Ration measuring the relationship between the supply immediately available and the existing stock.

BNP Paribas Real Estate cannot be held responsible if, despites its best efforts, the information contained in the present report turns out to be inaccurate or incomplete. This report is released by BNP Paribas Real Estate and the information in it is dedicated to the exclusive use of its clients. The report and the information contained in it may not be copied or reproduced without prior permission from BNP Paribas Real Estate.


ALBANIADanos & AssociatesBoulevard Deshmoret e KombitTwin Towers - Tower 211th FloorTiranaTel: +355-4-2280488Fax: +355-4-2280192

AUSTRIADr. Max Huber & PartnerDr. Karl-Lueger-Platz 51010 ViennaTel: +43-1-513 29 39 0Fax: +43-1-513 29 39 14

BULGARIADanos & Associates28, Hristo Botev BoulevardSofiaTel: +359-2-9532314Fax: +359-2-9532399

CANADACresa PartnersTel: +1-612-767 12 78Fax: +1-612-337 8459

CYPRUSDanos & Associates35, I. Hatziosif Ave2027, NicosiaTel: +357-22 31 70 31Fax: +357-22 31 70 11

GREECEDanos & Associates1, Eratosthenous Str.11635 AthensTel: +30-210 7 567 567Fax: +30-210 7 567 267

JAPANRISA Partners5F Akasaka Intercity 1-11-44Akasaka, Minato-ku107-0052 TokyoTel: +81-3-5573 8011Fax: +81-3-5573 8012

PORTUGALFenaluAv. Duarte PachecoEmpreendimentos dasAmoreirasTorre 2, 14° - Sala H1070-102 LisbonTel: +351-21-3833106Fax: +351-21-3833107

NETHERLANDSHolland Realty PartnersJ.J. Viottastraat 33, 1071 JPAmsterdam,Tel: +31-20-305 97 20Fax: +31-20-305 97 21

NORTHERN IRELANDWhelan Property Consultants44 Upper Arthur StreetBelfast Bt1 4GJTel: +44-28-9044 1000Fax: +44-28-9033 2266

SLOVAKIAModesta (Dr. Max Huber &Partner Group)Heydukova 12-14811 08 BratislavaTel: +421-2-3240 8888Fax: +421-2-3214 4777

Bangalore403, The Estate,121, Dickenson Road,Bangalore - 560 042Tel: +91 80 4050 8888Fax: +91 80 4050 8899

Contact: Amit [email protected]

Mumbai704, Level 7, MMTC House, C-22,Bandra Kurla Complex, Bandra (E),Mumbai - 400 051Tel: +91 22 6138 8088Fax: +91 22 6138 8089

Contact: Sangram [email protected]

DelhiLevel 4, Wing B, Statesman House,Barakhamba Road,New Delhi - 110 001Tel: +91 11 3044 6406Fax: +91 11 3044 6507

Contact: Ankit [email protected]

INDIA

LOCATIONS ALLIANCESRUSSIAAstera10, b.2 Nikolskaya Str.Moscow, 109012Tel/Fax: +7-495-925 00 05

SERBIADanos & Associates6, Vladimira Popovica StreetBelgrade 11000Tel: +381-11-2600 603Fax: +381-11-2601 571

UKRAINEAstera2a Konstantinovskaya Street04071, KievTel: +38-044-501 50 10Fax: +38-044-501 50 11

USACresa Partners200 State Street13th FloorBoston, Massachusetts 02109Tel: +1-612-767 12 78Fax: +1-612-337 8459

BAHRAINBahrain Financial HarbourWest Tower16th FloorP.O. Box 5253ManamaTel: +971-505 573 055Fax: +971-44 257 817

BELGIUMBlue TowerAvenue Louise 326B14 Louizalaan1050 BrusselsTel: +32-2-646 49 49Fax: +32-2-646 46 50

DUBAIEmmar SquareBuilding No. 1, 7th FloorP.O. Box 7233Dubai, EAUTel: +971-505 573 055Fax: +971-44 257 817

FRANCE13 boulevard du Fort de Vaux75017 ParisTel: +33-1-55 65 20 04Fax: +33-1-55 65 20 00

GERMANYGoetheplatz 460311 FrankfurtTel: +49-69-2 98 99 0Fax: +49-69-29 29 14

IRELAND40 Fitzwilliam PlaceDublin 2Tel: +353-1-66 11 233Fax: +353-1-67 89 981

ITALYCorso Italia, 15/A20122 MilanTel: +39-02-58 33 141Fax: +39-02-58 33 14 39

JERSEY4th Floor, Conway HouseConway StreetSt HelierJersey Je2 3NTTel: +44-15 34-62 90 01Fax: +44-15 34-62 90 11

ABUDHABIAl Bateen AreaPlot No. 144, W-11New Al Bateen MunicipalityStreet 32P.O. Box 2742Abu Dhabi, UAETel: +971-505 573 055Fax: +971-44 257 817

LUXEMBOURGEBBC, Route de Trèves 6Bloc D2633 SenningerbergTel: +352-34 94 84Fax: +352-34 94 73

ROMANIAUnion International Center11 Ion Campineanu StreetSector 1Bucharest 010031Tel: +40-21-312 7000Fax: +40-21-312 7001

SPAINMaría de Molina, 5428006 MadridTel: +34-91-454 96 00Fax: +34-91-454 96 04

UNITED KINGDOM90 Chancery LaneLondon WC2A 1EUTel: +44-20-7338 4000Fax: +44-20-7430 2628

USA787 Seventh Avenue31st FloorNew York, NY 10019Tel: +1-917-472 4970Fax: +1-212-471 8100

www.realestate.bnpparibas.com

For all corporate/central enquiries contact Tasneem Gandhi at+91 9930141009 or email at [email protected]

City Report - Bangalore Market Overview 2009

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