2012 Global Market report - NAI Global

Chennai, India
Mumbai, India
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International Realty
Services
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Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
1,269,219
8.4%
$1,598.39
$1,296.68
6.7%
9.4%
7.3%
1,232.68
Chennai’s economy, known for its broad base in the
automobile, computer, technology, hardware manufacturing,
financial services, telecom and health care industries, has
continued its growth momentum of 2010 through the first
half of 2011.The IT/ITES sectors continue to be the major
driver of demand for good quality office space in Chennai.
Over 3.5 million SF has been leased in Chennai in the first
three quarters of 2011. The most prominent transactions
were Cognizant Technology Solutions (650,000 SF), Hewlett
Packard (350,000 SF), Infosys (100,000 SF), Verizon
(140,000 SF), HSBC (170,000 SF) and IBM (140,000 SF).
The cautious optimism that was witnessed in the real estate
market in Chennai in the first half of 2011 has taken a hit
with the news of a possible slowdown in the economies of
North American and European countries in Q3 2011. The
IT/ITES industry is largely dependant on the well being and
expansion of the North American and European economies.
There could be an impact on the take up of large space
going forward if there is a contraction in these economies.
With rental values correcting, a plethora of opportunity is
represented for occupiers. Companies looking at owning
properties will be well positioned to take advantage of the
availability of good, quality supply with correction in the
prices.
The demand for return on investment properties i.e.,
purchase of office/commercial premises with tenants for
rental returns, continues to be strong in Chennai given the
ROI coupled with property appreciation. Demand from the
hospitality, education and health care sectors will continue
to grow given the opportunities being created by a growing
economy.
Chennai’s High Street continues to remain a favorite location
for retailers due to better conversion rates. Proximity to the
city center, instant recall, premium residential catchments
and easy access are some of the key drivers for high-end
streets. The suburbs of Chennai which are witnessing
significant residential activity have made way for more retail
activity which has prompted developers like PS Srijan,
Prestige, Phoenix Market City and Marg to develop malls.
Large catchments, reasonable rentals and a one stop
destination will drive retailers to increase their presence in
the suburbs.
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Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
1,269,219
8.4%
$1,598.39
$1,296.68
6.7%
9.4%
7.3%
1,232.68
Mumbai seems to be, yet again, the costliest city for real
estate in the country with speculation that it might remain
so for some time to come. Mumbai is likely to witness an
appreciation of 5% to 8% in the city with the suburbs seeing
a rise of 7% to 11%. Population is yet another influencing
factor for the rise in demand to match the supply.
More buyers are coming forward to invest in properties
fitting their specific needs. Nariman Point is certainly feeling
the pressure, with its capital and rental rates dropping
substantially over the past several years. Another commercial
area, which has been developing slowly, is the mill area in
Worli and Lower Parel, but this is mainly a retail sector.
Nariman Point is making a come back. More buyers are
coming forward to invest in properties fitting their needs in
that market as well.
Mumbai is quickly being recognized across the globe as an
IT and ITES hub. High literacy levels, easy availability of
intellectual talent at 50% to 60% lower costs compared to
other international cities, better productivity and a time zone
difference of eight to10 hours making it possible for offshore
corporations to respond quickly since processing is done in
Mumbai during the night, are some factors that have made
Mumbai the most favored destination to China, Singapore,
Philippines, Ireland and UK.
Several companies have closed down their offices all over
Mumbai and consolidated under one roof in the Bandra-
Kurla complex. Prime examples of this are ICICI, IL & FS and
Citibank. The Bandra-Kurla complex has succeeded in
attracting some major financial institutions and companies.
The S.T.P.I (Software technology parks India) is encouraging
more and more IT parks. These buildings are specifically
customized for IT and ITES corporate users.
The commercial market in Kalyan is also picking up. The
areas adjacent to the roads near the Kalyan railway station
are an important commercial area. It is a boom time for real
estate markets in the suburbs of Mumbai. Worli is the second
largest commercial area in South Mumbai. Worli has
several key institutions including the National Stock
Exchange (NSE) and Nehru Science Center. It is also home
to the famous Worli Dairy. Worli boasts good connectivity for
markets throughout Mumbai. All business areas in Mumbai
can be easily accessed from Worli.
Chennai At A Glance
conversion 52.49 Inr = 1 us$ RENT/SF/MO US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
INR 65.00
INR 60.00
INR 70.00
INR 70.00
$ 15.00
$ 13.85
$ 16.15
$ 16.15
N/A
N/A
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
INR 35.00
INR 25.00
INR 30.00
INR 50.00
INR 45.00
INR 45.00
$
$
$
8.08
5.77
6.92
$ 11.54
$ 10.38
$ 10.38
N/A
N/A
N/A
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
INR 20.00
INR 15.00
INR 15.00
INR 18.00
INR 30.00
INR 22.00
INR 20.00
INR 25.00
$
$
$
$
4.62
3.46
3.46
4.15
$
$
$
$
6.92
5.08
4.62
5.77
N/A
N/A
N/A
N/A
Downtown
Neighborhood Service Centers
Community Power Center
INR 100.00
INR 50.00
N/A
INR 150.00
INR 80.00
N/A
$ 23.08
$ 11.54
N/A
$ 34.62
$ 18.46
N/A
N/A
N/A
N/A
Regional Malls
Solus Food Stores
INR 35.00
N/A
INR 60.00
N/A
$ 8.08
N/A
$ 13.85
N/A
N/A
N/A
deVeloPment land low/acre High/acre low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
INR 4,500.00 INR 7,500.00 $ 86.54 $ 144.23
N/A N/A N/A N/A
INR 3,200,000.00 INR 10,000,000.00 $ 61,538.46 $ 192,307.69
N/A N/A N/A N/A
INR 594,000,000.00 INR 11,000,000.00$11,423,076.92 $ 211,538.46
INR300,000,000.00 INR 7,000,000,000.00 $ 5,769,230.77 $ 13,461,538.46
Mumbai At A Glance
conversion 52.49 Inr = 1 us$ NET RENT/SF/MO US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
INR
INR
INR
INR
INR
INR
225.00
200.00
175.00
100.00
90.00
80.00
INR 350.00
INR 275.00
INR 225.00
INR 175.00
INR 125.00
INR 100.00
$
$
$
$
$
$
51.44
45.72
40.01
22.86
20.58
18.29
$ 80.02
$ 62.87
$ 51.44
$ 40.01
$ 28.58
$ 22.86
20.00%
35.00%
40.00%
N/A
N/A
N/A
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
INR 8.00
N/A
N/A
INR 13.00
N/A
N/A
$ 1.83
N/A
N/A
$ 2.97
N/A
N/A
N/A
N/A
N/A
Downtown
Suburban Malls
Neighborhood Service Centers
Community Power Center
Solus Food Stores
INR
INR
250.00
125.00
N/A
N/A
N/A
INR 450.00
INR 250.00
N/A
N/A
N/A
$
$
57.15
28.58
N/A
N/A
N/A
$ 102.88
$ 57.15
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
deVeloPment land low/acre High/acre low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
INR 800,000,000.00 INR1,000,000,000.00 $15,240,998.29 $19,051,247.86
INR 500,000,000.00 INR 750,000,000.00 $ 9,525,623.93 $14,288,435.89
INR 250,000,000.00 INR 400,000,000.00 $ 4,762,811.96 $ 7,620,499.14
INR 100,000,000.00 INR 200,000,000.00 $ 1,905,124.79 $ 3,810,249.57
INR 500,000,000.00 INR 750,000,000.00 $ 9,525,623.93 $14,288,435.89
INR 250,000,000.00 INR 500,000,000.00 $ 4,762,811.96 $ 9,525,623.93
2012 Global Market Report n www.naiglobal.com 36