2012 Global Market report - NAI Global

Pune, India
Punjab, India
Contact
NAI Property Terminus
+91 20 2563 5551
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
Pune witnessed more than 2.3 million SF of absorption in
just the first two quarters of 2011 compared to 3.54 million
SF in 2010. This is expected to jump to about 10 million SF
in 2012. The micro markets witnessed an increase in
absorption levels, largely in the secondary spaces vacated
by companies relocating to areas outside of the CBD. Overall
vacancy rates remained stable at 15.7% and 15.8% in Q1
2011 and Q2 2011 respectively.
The most active regions in terms of absorption and leasing
activity were Hinjewadi located in the suburban micro-market,
and Yerwada, Hadapsar and Kharadi in the secondary
business district. Hinjewadi alone accounted for approximately
50% (1.12 million SF) of the total space absorbed thus far
in 2011, as the majority of the active and under-construction
IT SEZs are in this region. The markets outside of the CBD
micro market observed an increase in the number of
occupier inquiries which are expected to lead to transaction
closures over the next several quarters. Almost 300,000 SF
of fresh supply came on to the market.
The peripheral business district continued to be the
preferred destination for IT/ITES companies. Numerous
companies that had made inquiries for space last year
transacted for the same in mid to late 2011. Approximately
1.37 million SF of fresh supply was added to the market.
Pune witnessed an addition of almost 4.5 million SF of new
Grade A supply by the end of 2011. With various IT
occupiers as well as non-IT companies expanding their
presence across the city, an increase in demand is likely to
be observed over the next several quarters.
In the industrial market, leasing activity remained in line with
expectations and is anticipated to increase in the coming
months. Rents and yields are stable and not expected to
change to any significant degree as new supply remains
soft.
Pune’s retail market witnessed completion of the long
awaited In orbit Mall, Pulse Mall and Phoenix Market City.
With these three completions totaling up to a leasable area
of 1.7 million SF, Pune’s total stock of organized retail space
was 3.25 million SF at the end of Q2 2011. Net absorption
in the micro-market is expected to be 2.2 million SF of the
total 2.6 million SF expected by the end of 2011.
Contact
NAI Space Alliance
+91 98 1183 4000
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
The real estate sector in Punjab provided sustainable and
profitable capital growth through the last six months of
2011. As the demand has risen, the rate of land and built
up properties increased by 10% to 20% over the last
several months of 2011. The imposition of a new levy by
the local government for approval of upcoming commercial
projects within the municipal area, however, will affect the
builder’s margins.
There is a growing demand for office space due to the
sustained economic activity driven mostly by demand from
software companies. In the retail sector, once again retailers
are leasing retail space in the malls rather than only
considering High Street locations. Punjab is also emerging
as a preferred destination for investment in real estate for
the information technology industry, owing to its strong
telecom infrastructure and availability of qualified
manpower at a lower cost compared to other cities of north
India. The fresh supply of Class A office space in and
around the CBD area is negligible. Recent office space
take-up has kept a check on the vacancy rates. The capital
values of the properties have increased recently by 12%
to 18%, but the rentals have increased by only 5% to 7 %.
This compression has affected yields for new investors who
now can buy pre-leased properties at 5% to 7%, which
were previously trading at 6% to 9% depending on the size
and location.
The share of organized retail markets in Punjab is growing
as many domestic and global players have already entered
this sector. Fuelled by active retailer interest, the rental
values are increasing across all High Street destinations
and better performing mall properties.
In the industrial sector, the local companies have shown a
trend of leasing spaces rather than buying properties as
the industrial rentals are low compared to the existing
capital values.
The Punjab real estate market expects to see an upward
trend in the second half of 2012 as Q1 2012 figures will
be sluggish due to a wait and watch policy that will be
adopted by the investors as well as the industrial houses,
waiting on the budget announcement for the new fiscal
year.
Pune 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)
INR 40.00 INR 75.00 $ 9.14 $ 17.15 18.00%
Class A (Prime)
INR 55.00 INR 75.00 $ 12.57 $ 17.15 20.00%
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
INR
INR
INR
40.00
28.00
40.00
INR
INR
INR
55.00
45.00
50.00
$
$
$
9.14
6.40
9.14
$ 12.57
$ 10.29
$ 11.43
15.00%
18.00%
15.00%
Class B (Secondary)
IndustrIal
Bulk Warehouse
INR
INR
30.00
18.00
INR
INR
40.00
35.00
$
$
6.86
4.12
$
$
9.14
8.00
20.00%
5.00%
Manufacturing
High Tech/R&D
retaIl
INR
INR
20.00
20.00
INR
INR
45.00
45.00
$
$
4.57
4.57
$ 10.29
$ 10.29
0.50%
N/A
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
INR
INR
INR
INR
INR
80.00
70.00
70.00
60.00
90.00
INR
INR
INR
INR
INR
140.00
120.00
120.00
100.00
110.00
$ 18.29
$ 16.00
$ 16.00
$ 13.72
$ 20.58
$ 32.01
$ 27.43
$ 27.43
$ 22.86
$ 25.15
15.00%
20.00%
20.00%
25.00%
20.00%
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 2,500.00 INR 6,000.00 $ 47.63 $ 114.31
INR 2,000.00 INR 3,500.00 $ 38.10 $ 66.68
INR 400.00 INR 650.00 $ 7.62 $ 12.38
INR 300.00 INR 650.00 $ 5.72 $ 12.38
INR 3,000.00 INR 10,000.00 $ 57.15 $ 190.51
INR 1,000.00 INR 6,000.00 $ 19.05 $ 114.31
Punjab 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)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
INR
INR
INR
35.00
34.00
17.00
N/A
N/A
N/A
INR 53.00
INR 50.00
INR 25.00
N/A
N/A
N/A
$
$
$
8.00
7.84
3.90
N/A
N/A
N/A
$ 12.00
$ 11.43
$ 7.06
N/A
N/A
N/A
11.00%
14.00%
18.00%
N/A
N/A
N/A
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
INR 12.00
N/A
N/A
N/A
N/A
INR 21.00
N/A
N/A
N/A
N/A
$ 2.74
N/A
N/A
N/A
N/A
$ 4.80
N/A
N/A
N/A
N/A
14.00%
N/A
N/A
N/A
N/A
Community Power Center
Regional Malls
Solus Food Stores
INR 98.00
INR 88.00
N/A
INR 143.00
INR 133.00
N/A
$ 22.40
$ 20.11
N/A
$ 32.69
$ 30.40
N/A
8.00%
17.00%
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
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
2012 Global Market Report n www.naiglobal.com 37