office snapshot q1 2017 - cushman & wakefield · 2017-04-12 · office snapshot q1 2017...

Office Snapshot Q1 2017AHMEDABAD, INDIA

MARKETBEAT

Market Indicators (Grade A)

Net Asking Rental / Vacancy Rates (CBD-All Grades)

Pre-commitment / Net Absorption (CBD-All Grades)

www.cushmanwakefield.com

Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast

Overall Vacancy 40.7% 38.7% 2.0%*

Weighted Average Net

Asking Rentals

(INR/sf/month)

37.00 39.65 7.2%

YTD Net Absorption (sf) 169,700 37,000 -78.20%

* percentage points

EconomyDespite a dim forecast due to the impact of the Indian rupee’s

demonetization, India’s Gross Domestic Product (GDP) still grew

7.0% during the fourth quarter of 2016. While the pace of growth

slowed from the 7.4% in the previous quarter, most sectors except

Construction and Financial, Real Estate, and Professional Services

recorded higher growth during the quarter. India’s bellwether index,

the S&P BSE 100 Index gained about 12% in value in January-

March 2017 period, indicating healthy performances for the top

100 large-cap companies. However, the BSE IT Index, which

tracks the performance of listed Information Technology–Business

Process Management (IT-BPM) companies, gained only 4% in the

same period, at a time when the IT-BPM sector is going through a

tumultuous time. Concerns on global macroeconomic headwinds

have resulted in the software industry body, the National

Association of Software and Services Companies (NASSCOM),

lowering its IT export growth target to 8-10% for the year ending

March 2017. This implies that leasing by IT-BPM companies could

be adversely impacted. Going ahead, it is expected that GDP

growth could remain stressed for the short term due to the hang-

over impact of demonetization on manufacturing and investments.

Significant addition in supply and decline in net absorption lead to increase in vacancy levelsAhmedabad recorded 454,000 square feet (sf) of new supply

spread in the submarkets of C.G. Road and S.G. Highway during

the first quarter of 2017. This significant supply addition, coupled

with moderate leasing activity, led to a 1 percentage point increase

in the overall vacancy levels, which stood at 25.6% at the end of

the first quarter of 2017.

Net absorption of approximately 87,300 sf was recorded during the

quarter, declining 22% Quarter-on-Quarter (QoQ). Majority (42%)

of the net absorption was recorded in the S.G. Highway

submarket. The quarterly leasing activity was dominated by the

banking, financial services, and insurance (BFSI) sector with a

37% share, followed by the IT-BPM sector with a 22% share.

The first quarter of 2017 witnessed lease commitments by

companies from the BFSI and IT-BPM sectors in under-

construction buildings that are expected to be completed by the

end of 2017. Grade A rentals across most markets remained

range-bound during the quarter due to the lackluster leasing

activity.

OutlookNearly 1.7 million square feet (msf) of Grade A supply is expected

to become available during the second quarter of 2017. In the

wake of significant supply infusion coupled with moderate leasing

activity, overall city vacancy levels may rise in the short term.

Rentals are expected to remain stable.

0

50

100

150

2010 2011 2012 2013 2014 2015 2016 Q12017

Pre-commitment (000' sf) Net Absorption (000' sf)

AHMEDABAD OFFICE

0%

4%

8%

12%

16%

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016 Q12017

Net Asking Rental (INR/sf/month) Vacancy Rate (%)

Office Snapshot Q1 2017AHMEDABAD, INDIA

MARKETBEAT


About Cushman & WakefieldCushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way

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occupier services, investment management (branded DTZ Investors), tenant representation and valuations &

advisory. To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter.

Copyright © 2017 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered

to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

Key Lease Transactions Q1 2017

PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET

Studio Complex 25,000 Adarsh Bank Lease S.G. Highway

Shoppers Plaza 12,000 Indus Ind Bank Lease C.G. Road

Key Construction Completions Q1 2017

PROPERTY SF TENANT GRADE SUBMARKET

Shilp Arista 180,000 NA A S.G. Highway

Key Projects Under Construction

PROPERTY SF TENANT COMPLETION DATE SUBMARKET

The First 900,000 NA Q2 2017 Satellite / Prahladnagar

Siddhart GoelSenior Director

Research Services, India

Tel: +91 80 40465555

[email protected]

SUBMARKET INVENTORY (SF)OVERALL

VACANCY RATE

YTD LEASING

ACTIVITY (SF)

UNDER

CONSTRUCTION

(SF)

YTD

CONSTRUCTION

COMPLETION (SF)

YTD NET

ABSORPTION

(SF)

AVERAGE ASKING

RENT (Q4 2016)*

AVERAGE

ASKING RENT

(Q1 2017)*

AVERAGE ASKING

RENT (Q1 2017)**

AVERAGE

ASKING RENT

(Q1 2017)***

ALL GRADES

C.G. Road (CBD) 3,443,800 14.8% 16,500 220,000 183,000 16,300 38.68 39.18 $7.18 € 6.65

Ashram Road 651,600 18.4% 0 920,000 0 0 42.92 42.92 $7.87 € 7.29

S.G. Highway 8,028,100 24.6% 64,400 2,812,500 271,000 62,000 41.21 41.85 $7.67 € 7.11

Satellite / Prahladnagar 6,688,300 23.5% 19,000 1,866,000 0 9,000 36.95 36.99 $6.78 € 6.28

TOTALS# 25,318,700 25.6% 99,900 29,272,100 454,000 87,300 39.19 38.99 $7.15 € 6.62

GRADE A

S.G. Highway 6,058,200 31.0% 39,400 2,707,500 271,000 37,000 41.81 42.28 $7.75 € 7.18

Satellite / Prahladnagar 4,061,500 30.8% 10,000 1,866,000 0 0 38.51 38.51 $7.06 € 6.54

TOTALS# 13,442,600 38.7% 49,400 27,198,600 271,000 37,000 39.90 39.65 $7.27 € 6.73

Net absorption refers to the incremental new space take-up; renewals not included in leasing activity statistics

Average asking rents indicated weighted average, warm shell, asking rental rates for vacant spaces that provide core facility, high-side air conditioning and 100% power back up

*Weighted average rental rates reflect gross asking INR/sf/month

** Weighted average rental rates reflect gross asking USD/sf/year

*** Weighted average rental rates reflect gross asking EUR/sf/year

Conversion rate : US$1 = INR 65.46 and EUR 1= INR 70.65

#Total figures contain additional submarkets not mentioned above

Numbers for the first quarter are based on market information collected until 10th March 2017

Office Snapshot Q1 2017BENGALURU

MARKETBEAT


Net Asking Rental / Vacancy (Grade A)

Pre-commitment/ Net Absorption (Grade A)


Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast

Overall Vacancy 7.7% 6.2% -2.2%*

Weighted Average

Net Asking Rentals

(INR/sf/month)

55.33 61.03 10.3%

YTD Net Absorption

(sf)

3,314,500 1,144,900 -65.5%

* percentage points







the S&P BSE 100 Index gained about 12% in value in January-March

2017 period, indicating healthy performances for the top 100 large-

cap companies. However, the BSE IT Index, which tracks the

performance of listed Information Technology–Business Process

Management (IT-BPM) companies, gained only 4% in the same

period, at a time when the IT-BPM sector is going through a


have resulted in the software industry body, the National Association

of Software and Services Companies (NASSCOM), lowering its IT

export growth target to 8-10% for the year ending March 2017. This

implies that leasing by IT-BPM companies could be adversely

impacted. Going ahead, it is expected that GDP growth could remain

stressed for the short term due to the hang-over impact of

demonetization on manufacturing and investments.

Subdued absorption levels due to deferment in new

supply The city saw limited supply infusion during the quarter as only 1.4

million square feet (msf) of Grade A space received occupancy

certificates out of the 7.0 msf scheduled for completion. Outer Ring

Road (ORR) continues to see the highest share (55%) of new supply

followed by Peripheral East (24%).

Grade A net absorption was noted at 1.1 msf during the quarter. ORR

remains the preferred market for occupiers, accounting for 61% of the

overall Grade A net absorption. The quarter saw large transactions

from IT occupiers such as Nokia (about 200,000 sf) and TCS

(360,000 sf). Approximately 912,000 sf of Grade A space was pre-

committed during the quarter by IT-BPM and consulting companies,

majority (73%) in the ORR submarket. Grade A vacancy rate

increased marginally to 6.2% from 6.0% in the previous quarter owing

to low absorption. The quoted rentals remained stable across

markets. However, weighted average rentals in ORR and Peripheral

South witnessed an increase during the quarter, owing to availability

of spaces with high rentals.

OutlookAdditional supply of about 6.0 msf is expected to become operational

during the next quarter. However, vacancy rate is expected to remain

stable due to healthy demand and previous pre-commitments for the

upcoming supply. Rental values across markets are expected to

remain flat.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2010 2011 2012 2013 2014 2015 2016 Q12017


BENGALURU OFFICE

0%

5%

10%

15%

20%

25

30

35

40

45

50

55

60

65

70

2010 2011 2012 2013 2014 2015 2016 Q12017


Office Snapshot Q1 2017BENGALURU

MARKETBEAT









Copyright © 2017 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from mult iple sources considered




Tel: +91 80 40465555

[email protected]



Brigade Bhuwalka Icon 360,000 TCS Lease Whitefield

Manyata Valdel (M2) 194,900 Nokia Lease Outer Ring Road



RMZ Eco World (7) 764,500 NA A Outer Ring Road

Brigade Bhuwalka Icon 360,000 NA A Whitefield



Hinduja SEZ 800,000 NA Q3 2017 Peripheral North

Bhartiya Center for Information Technology Block -2 790,000 NA Q4 2017 Peripheral North



IT-BPM denotes Information Technology and Business Process Management services

*Reflect average asking rents in INR/sf/month ** Reflect average asking rents in USD/sf/year *** Reflect average asking rents in EUR /sf/year


#Total figures contain additional submarkets not mentioned above. Numbers for the first quarter are based on market information collected until 10th Mach 2017

2016 numbers have been recalibrated based on revision in inventory and vacant spacesKey to submarkets:

CBD/Off-CBD – M.G. Road, Millers Road, Vittal Mallya Road, Residency Road, etc.; Peripheral South – Electronic City, Hosur Road, Mysore Road;

Outer Ring Road – Sarjapur, KR Puram, Hebbal; Suburban East – Indira Nagar, Old Airport Road, C.V. Raman Nagar

Peripheral East – Whitefield; Suburban South – Koramangala, Bannerghatta Road, Jayanagar

Peripheral North – Bellary Road, Thanisandara Road, Tumkur Road,

SUBMARKETINVENTORY

(SF)

OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY

(SF)

UNDER

CNSTRUCTION

(SF)

YTD CONSTRUCTION

COMPLETION

(SF)

YTD NET

ABSORPTION

(SF)

AVERAGE

ASKING RENT

(Q4 2016)*

AVERAGE

ASKING RENT

(Q1 2017)*

AVERAGE

ASKING RENT

(Q1 2017)**

AVERAGE

ASKING RENT

(Q1 2017)***

ALL GRADES

CBD/Off-CBD 11,417,600 6.4% 104,400 875,600 92,000 -64,200 72.33 80.87 $14.83 € 13.74

Suburban East 19,368,900 1.2% 362,300 1,961,800 0 263,200 50.05 57.65 $10.57 € 9,79

Suburban South 11,094,700 4.0% 86,000 3,399,000 0 59,000 62.98 64.51 $11.83 € 10.96

Peripheral East 30,899,500 9.9% 506,500 4,978,700 360,000 247,200 40.67 42.26 $7.75 € 7.18

Peripheral North 2,921,000 48.5% 0 3,820,600 233,500 -72,300 72.87 72.87 $13.36 € 12.38

Peripheral South 14,887,200 12.7% 116,600 1,250,000 0 44,800 43.08 49.27 $9.03 € 8.37

Outer Ring Road 54,507,600 7.0% 733,200 13,815,800 830,500 697,300 67.19 75.69 $13.87 € 12.86

TOTALS# 146,396,500 7.9% 1,909,000 30,681,600 1,515,900 1,175,100 50.25 53.97 $9.89 € 9.17

GRADE A

CBD/Off-CBD 3,795,300 5.5% 83,100 875,600 0 -22,900 73.92 73.92 $13.55 € 12.55

Suburban East 18,099,800 0.5% 331,500 1,961,800 0 230,900 75.00 77.00 $13.75 € 12.74

Suburban South 4,987,700 0.2% 0 2,900,000 0 0 70.00 70.00 $12.83 € 11.89

Peripheral East 23,198,500 5.4% 506,500 4,766,700 360,000 267,200 44.30 45.55 $8.35 € 7.74

Peripheral North 2,548,500 54.0% 0 3,820,600 233,500 -72,300 73.43 73.43 $13.46 € 12.47

Peripheral South 8,106,800 9.5% 56,600 1,250,000 0 44,800 54.64 59.77 $10.96 €10.15

Outer Ring Road 53,452,700 6.4% 718,400 12,993,900 764,500 697,300 68.56 77.00 $14.12 € 13.08

TOTALS# 115,289,300 6.2% 1,696,000 29,148,700 1,358,000 1,144,900 61.16 61.03 $11.19 € 10.37

Office Snapshot Q1 2017CHENNAI, INDIA

MARKETBEAT





Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast

Overall Vacancy 8.8% 9.2% 0.4%*


Asking Rentals

(INR/sf/month)

44.27 57.36 29.6%

YTD Net Absorption (sf) 544,600 709,000 30%

* percentage points








March 2017 period, indicating healthy performances for the top 100

large-cap companies. However, the BSE IT Index, which tracks the












Net absorption drops, vacancy rate declines as no

fresh supply is added Grade A net absorption stood at 709,000 square feet (sf), a sharp

drop of 67% from the previous quarter. Gross leasing activity

remained healthy at 1.2 million sf. Bulk of the leasing activity (70%)

was observed in Peripheral South followed by Suburban South.

The IT-BPM sector continues to dominate Grade A leasing activity,

characterized by big ticket transactions in excess of 100,000 sf in

IT-Special Economic Zones (SEZs). Thoraipakkam, Navalur, and

GST Road were the main micromarkets that saw a huge demand

in office space.

There was no fresh addition of Grade A space during the quarter

as the projects completions were deferred. Overall Grade A

vacancy rate was noted at 9.2%, a 1.6 percentage points decline

from the previous quarter. However, Off-CBD area recorded a high

Grade A vacancy rate of 29% as a tenant occupying a substantial

area relocated during the quarter. Grade A rental values remained

stable across markets.

OutlookGiven that availability of ready-to-move Grade A office spaces is

limited, demand for Grade A office space is expected to rise. Only

about 100,000 sf of Grade A space is expected to be added in the

upcoming quarter in CBD area. Also, select micro-markets such as

Suburban South and South-West may witness an increase in

rentals in the next quarter on the back of steady demand coupled

with no addition to supply.

0

2,000

4,000

6,000

2010 2011 2012 2013 2014 2015 2016 Q12017

Pre-commitment (000'sf) Net Absorption (000'sf)

CHENNAI OFFICE

0%

10%

20%

30%

40%

10

20

30

40

50

60

2010 2011 2012 2013 2014 2015 2016 Q12017


Office Snapshot Q1 2017CHENNAI, INDIA

MARKETBEAT













Chennai One Magnum 370,000 TCS Lease Peripheral South

Chennai One Magnum 123,000 Wells Fargo Lease Peripheral South

ETA Techno Park 140,000 Fujitsu Lease Peripheral South

Key Construction Completions Q1 2017PROPERTY SF TENANT GRADE SUBMARKET

Best IT Park 73,000 NA B South-West

Key Projects Under ConstructionPROPERTY SF TENANT COMPLETION DATE SUBMARKET

Olympia Teknos 111,500 NA Q3 2017 South West

Chennai One Magnum – Phase II 1,087,450 NA Q4 2017 Peripheral South

Siddhart GoelSenior Director Research Services,

India

Tel: +91 80 40465555

[email protected]

SUBMARKETINVENTORY

(SF)

OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY (SF)

UNDER CNSTR

(SF)

YTD

CONSTRUCTION

COMPLETION

(SF)

YTD NET

ABSORPTION

(SF)

AVERAGE

ASKING RENT

(Q4 2016)*

AVERAGE

ASKING RENT

(Q12017)*

AVERAGE

ASKING RENT

(Q1 2017)**

AVERAGE

ASKING RENT

(Q1 2017)***

ALL GRADES

CBD 15,067,900 8.8% 62,000 100,000 0 24,400 62.80 62.74 $11.50 € 10.66

Off-CBD 10,325,900 13.3% 48,600 125,400 14,000 -40,400 62.49 64.56 $11.84 € 10.97

South-west 13,341,600 4.5% 19,800 951,600 73,000 13,700 61.92 63.23 $11.59 € 10.74

North-west 5,072,200 9.5% 0 0 14,000 0 39.93 40.66 $7.45 € 6.91

Suburban South 19,029,100 7.1% 220,200 0 0 127,500 73.14 73.76 $13.52 € 12.53


Peripheral South-west 3,073,800 5.6% 126,900 800,000 0 -47,000 35.12 41.63 $7.63 € 7.07

TOTALS 77,989,400 9.8% 1,269,400 3,064,500 101,000 786,600 55.81 56.67 $10.39 € 9.63

GRADE A

CBD 2,176,800 14.4% 35,600 100,000 0 9,800 75.58 75.91 $13.92 € 12.89

Off-CBD# 340,000 29.4% 0 80,000 0 -80,000 65.00 93.00 $17.05 € 15.80

South-west 9,591,600 3.6% 19,800 861,500 0 12,200 63.96 63.75 $11.69 € 10.83

North-west 2,872,000 5.6% 0 0 0 0 31.54 31.54 $5.78 € 5.36

Suburban South 15,853,800 5.9% 163,700 0 0 105,700 84.07 85.55 $15.68 € 14.53


Peripheral South-west 2,982,000 5.4% 120,000 800,000 0 -47,000 35.00 42.00 $7.70 € 7.13

TOTALS 43,947,800 9.2% 1,131,000 2,929,000 0 709,000 56.01 57.36 $10.52 € 9.74

Net Absorption refers to the incremental new space take-up, renewals not included in leasing activity statistic

Average asking rents indicate weighted average, warm shell, asking rental rates for vacant properties that provide core facil ity, high-side air conditioning and 100% power back up

*Reflect average asking rents in INR/sf/month

** Reflect average asking rents in USD/sf/year

*** Reflect average asking rents in EUR /sf/year

#Revision in data




The changes in inventory is due to removal of retail and non-commercial spaces from inventory

Key to submarkets:

CBD – Anna Salai, Nungambakkam, R.K. Salai Off-CBD – T.Nagar, Alwarpet, Kilpauk, Egmore, Chetpet, Royapettah, Kotturpuram

South-west – Guindy, Ashok Nagar, Vadapalani, Manapakkam, Ekkaduthangal North-west – Ambattur, Padi, Anna Nagar, Koyambedu, Arumbakkam

Suburban South – Perungudi, Taramani, Thiruvanmiyur, Velachery Peripheral South – Sholinganallur, Thoraipakkam, Navalur, Siruseri, Padur

Peripheral South-west – Singaperumalkoil, Tambaram, Guduvanchery, Perungalathur, Pallavaram

Office Snapshot Q1 2017DELHI-NCR, INDIA

MARKETBEAT





Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast



Asking Rentals

(INR/sf/month)

73.60 73.54 -0.1%

YTD Net Absorption (sf) 709,200 746,000 5.2%

* percentage points





















Net absorption declines, surge in new supplyGrade A net absorption of 746,000 square feet (sf) was recorded

during the quarter, a 19% decline quarter-on-quarter (QoQ). The

IT-BPM sector contributed 25% to Grade A leasing during the

quarter, followed the by banking, financial services and

insurance (BFSI) and engineering and manufacturing sectors with

12% and 10% shares, respectively. Majority of the space leased by

the BFSI and manufacturing segments during the quarter were led

by international occupiers. The quarter also recorded a pre-

commitment transaction of 225,000 sf by a technology research

firm in an upcoming project in Gurgaon.

Grade A new supply increased almost 100% from the previous

quarter with new supply of 895,000 sf coming from the submarkets

of Gurgaon Others and Noida. Overall vacancy remained similar to

the previous quarter at 28.7%. Grade A weighted average rentals

declined by 1.2% QoQ due to the addition of new space in Noida.

However, submarkets in Gurgaon noted a quarterly increase of

0.7–1.2% in weighted average rents due to decline in vacancy

levels during the quarter.

OutlookAbout 1.06 million sf of new supply is expected to be complete in

the next quarter in the Gurgaon Others submarket, while about

983,000 sf of supply scheduled for completion in the next quarter

has been deferred. The coming quarter is expected to witness

improved absorption of office space. However, rentals are likely to

remain largely unchanged on account of space availability as well

as upcoming supply.

0

2,000

4,000

6,000

8,000

10,000

2010 2011 2012 2013 2014 2015 2016 Q12017

Pre-commitment ('000 sf) Net Absorption ('000 sf)

DELHI-NCR OFFICE

0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

2010 2011 2012 2013 2014 2015 2016 Q1

2017


Office Snapshot Q1 2017DELHI-NCR, INDIA

MARKETBEAT













SP Infocity 50,000 Encore Lease Gurgaon

DLF Building 14 50,000 EXL Lease Gurgaon



Pioneer Square 345,000 PepsiCo A Gurgaon



Innovative Techno Park 500,000 NA Q2 2017 Gurgaon

Candor Office Park 411,000 NA Q2 2017 Gurgaon

Siddhart GoelSenior Director Research Services, IndiaTel: +91 80 [email protected]

SUBMARKET INVENTORY (SF)

OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY (SF)

UNDER

CNSTRUCTION

(SF)

YTD

CONSTRUCTION

COMPLETION (SF)

YTD NET

ABSORPTION

(SF)

AVERAGE ASKING

RENT (Q4 2016)*

AVERAGE

ASKING RENT

(Q1 2017)*

AVERAGE ASKING

RENT (Q1 2017)**

AVERAGE ASKING

RENT (Q1 2017)***

ALL GRADES

Delhi CBD 5,320,500 7.6% 24,000 253,900 0 (13,800) 331.06 328.62 $60.24 €55.82

South-East Delhi 8,801,300 19.5% 3,000 0 0 (44,900) 148.60 151.33 $27.74 €25.70

Delhi International Airport 1,186,200 17.2% 104,100 0 0 104,100 225.00 225.00 $41.25 €38.22

Gurgaon CBD 16,391,500 5.2% 118,800 2,549,000 0 46,500 117.09 118.07 $21.64 €20.05

Gurgaon Others 53,489,800 37.3% 737,300 15,257,300 345,000 591,700 68.71 69.15 $12.68 €11.75

Noida 24,935,200 29.5% 93,300 4,740,000 550,000 13,300 57.36 56.62 $10.38 € 9.62

TOTALS 110,124,500 27.7% 1,080,200 22,800,200 895,000 696,900 74.06 73.38 $13.45 €12.46

GRADE A

Delhi CBD 1,373,700 18.8% 24,000 253,900 0 1,000 398.62 398.62 $73.07 €67.71

South-East Delhi 7,608,200 17.4% 3,000 0 0 (44,900) 176.79 179.77 $32.95 €30.53

Delhi International Airport 1,186,200 17.2% 104,100 0 0 104,100 225.00 225.00 $41.25 €38.22

Gurgaon CBD 15,827,500 5.1% 118,800 2,549,000 0 62,300 117.97 119.39 $21.89 €20.28

Gurgaon Others 49,884,700 38.2% 737,300 15,062,300 345,000 603,200 68.96 69.41 $12.72 €11.79

Noida 22,502,400 29.2% 86,000 4,740,000 550,000 20,300 58.34 57.29 $10.50 € 9.73

TOTALS 98,382,700 28.7% 1,073,200 22,605,200 895,000 746,000 74.43 73.54 $13.48 €12.49

Key to submarkets:

Delhi CBD - Connaught Place

South-East Delhi - Rohini, Shalimar Bagh, Jasola, Munirka, Saket & Nehru Place

Gurgaon CBD - Cyber City and M. G. Road

Gurgaon Others - rest of the city (excludes Manesar); Noida - excludes Greater Noida




BFSI denotes Banking, Financial Services and Insurance



*** Weighted average rental rates reflect gross asking EUR /sf/year



2016 numbers have been recalibrated based on revision in inventory and vacant spaces

Office Snapshot Q1 2017HYDERABAD, INDIA

MARKETBEAT





Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast



Asking Rentals

(INR/sf/month)

37.96 51.77 36.38%

YTD Net Absorption (sf) 3,181,200 550,800 -82.68%

* percentage points








March 2017 period, indicating healthy performances for the top 100

large-cap companies. However, the BSE IT Index, which tracks the












Tight vacancies continue, occupiers should look at pre-

committingTight vacancies continued in the key submarkets of Madhapur

(2.0%) and Gachibowli (13.0%) during the quarter. Consequently,

90% of the space scheduled for delivery in 2017 has already been

pre-committed, forcing larger occupiers to pre-commit for buildings

with expected completions in 2018. As such, tenants with

immediate space requirements are forced to compromise on

quality, location, amenities, etc. and explore standalone commercial

properties in the suburban market.

With very few space options available in the market, Grade A net

absorption during the quarter was restricted to 550,800 square feet

(sf), almost half of the previous quarter. New supply of 465,800 sf

has entered the Gachibowli micro market at full occupancy levels.

There was no new supply in Madhapur over the last 3 months.

Gachibowli gains prominence with several Grade A

projects underway Gachibowli has gained traction over the last 12-18 months as major

clients such as Apple, DBS, GAP, ZF, and Google set-up their

offices. As market activity gained pace, developers have started

building large tech parks with Grade A offices. With tenants

currently competing for limited space options, rents are increasing

gradually. The availability of residential projects and schools are

also attracting tenants to choose Gachibowli as their preferred

location.

Outlook Increasing rents and limited availabilities are forcing clients to plan

in advance. However, this trend will change from second half of

2018 as several Grade A projects are expected to be delivered.

Vacancies expected to hover around 2-3% until the first half of

2018, while rents in Madhapur and Gachibolwi are expected to go

up 5-7% this year.

0

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HYDERABAD OFFICE

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Office Snapshot Q1 2017HYDERABAD, INDIA

MARKETBEAT













TSI 2.2 100,560 DBS Lease Suburban (Gachibowli)

TSI 2.2 40,000 Digital domain Lease Suburban (Gachibowli)



TSI 2.2 465,768 DBS A Suburban (Gachibowli)



Avance Business Hub H03 560,000 NA Q1 2017 Suburban (Madhapur)

TSI 2.3 409,500 Innominds Q4 2017 Suburban (Gachibowli)



Tel: +91 80 40465555

[email protected]

SUBMARKETINVENTORY

(SF)

OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY

(SF)

UNDER

CONSTRUCTION

(SF)

YTD

CONSTRUCTION

COMPLETION (SF)

YTD NET

ABSORPTION

(SF)

AVERAGE ASKING

RENT (Q4 2016)*

AVERAGE

ASKING RENT

(Q1 2017)*

AVERAGE ASKING

RENT (Q1 2017)**

AVERAGE

ASKING RENT

(Q1 2017)***

ALL GRADES

CBD 3,531,577 13.54% 57,040 348,800 0 28,000 48.91 49.33 $ 9.04 € 8.38

Off- CBD 9,223,502 13.01% 97,380 93,546 126,000 22,880 45.24 45.16 $ 8.28 € 7.67

Madhapur 31,148,525 3.65% 322,844 7,976,000 104,496 322,844 51.89 53.89 $ 9.88 € 9.15

Gachibowli 11,993,880 15.21% 591,943 3,528,250 965,768 465,768 40.72 50.09 $ 9.18 € 8.51

Suburban (Others) 1,442,561 3.65% 322,844 7,976,000 0 322,844 34.38 34.88 $ 6.39 € 5.93

Prime Suburban 3,733,170 15.25% 39,790 623,652 0 39,790 45.34 45.06 $ 8.26 € 7.65

Peripheral East 1,686,600 15.64% 0 1,160,000 0 0 30.00 30.00 $ 5.50 € 5.10

TOTALS 62,759,815 10.24% 1,170,410 13,730,248 1,196,264 900,142 43.27 46.80 $ 8.58 € 7.95

GRADE A

Madhapur 25,049,903 2.34% 43,053 7,976,000 0 85,053 57.23 57.07 $ 10.46 € 9.69

Gachibowli 9,506,287 13.09% 465,768 3,528,250 965,768 465,768 39.00 50.00 $ 9.17 € 8.49

Peripheral East 1,348,000 18.16% 0 0 0 0 30.00 30.00 $ 5.50 € 5.10

TOTALS 35904190 5.8% 508,821 11,504,250 965,768 550,821 41.37 51.70 $ 9.38 € 8.69



*Reflect average asking rents in INR/sf/month ** Reflect average asking rents in USD/sf/year *** Reflect average asking rents in EUR/sf/year

#Revisions in inventory on account of removal of some office spaces being recently converted to retail spaces




Key to submarkets:

CBD – Banjara Hills Road No. 1, 2, 10 & 12 Off-CBD – Begumpet, Somajiguda, Raj Bhavan Road, S.P Road, Himayath Nagar

Suburban (Madhapur) – Madhapur, Kondapur, Raidurg Suburban (Gachibowli) – Gachibowli - Nanakramguda, Manikonda;

Suburban (Others) – Kukatpally, Shaikpet Prime Suburban – Rest of Banjara Hills, Jubilee Hills

Peripheral East – Pocharam and Uppal

Office Snapshot Q1 2017KOLKATA, INDIA

MARKETBEAT


Salt Lake Net Asking Rental / Vacancy (Grade A)



Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast



Asking Rentals

(INR/sf/month)

51.94 49.46 -4.7%


* percentage points





















Net absorption declines, no new supply addition Grade A net absorption dropped almost 30% from the previous

quarter and was recorded at 111,000 square feet (sf), with Salt

Lake contributing 80%. Domestic engineering and manufacturing

firms contributed a majority share (70%) in Grade A leasing

activities during the quarter, while the banking, financial services

and insurance (BFSI) sector had a 9% share in the Grade A

leasing transactions.

No new supply was added during the quarter. Grade A vacancy

recorded a marginal decline of 0.5 percentage points at 33.8%

during the first quarter of 2017 on account of moderate leasing and

absence of supply infusion. Asking rents remained stable due to

the adequate availability.

OutlookAbout 1.55 million square feet (msf) of space is expected to be

added during the next quarter in the submarkets of Rajarhat and

Rashbehari Connector. The vacancy level in Rajarhat is likely to

increase with addition of new supply from an IT project.

Overall rents are likely to remain largely unchanged in the next

quarter owing to space availability in existing projects.

KOLKATA OFFICE

0%

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2010 2011 2012 2013 2014 2015 2016 Q1

2017


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Office Snapshot Q1 2017KOLKATA, INDIA

MARKETBEAT











Siddhart GoelSenior Director Research Services,

India

Tel: +91 80 4046 5555

[email protected]



Technopolis 60,000 Tata Steel Lease Sector-V, Salt Lake

Ecospace 15,730 Sankalp Semiconductor Lease Rajarhat

Key Construction Completion Q1 2017


- - - - -



Mani Casadona 1,300,000 NA Q2 2017 Rajarhat

SUBMARKETINVENTORY

(SF)

OVERALL

VACANCY RATE

YTD LEASING

ACTIVITY (SF)

UNDER

CONSTRUCTION

(SF)

YTD

CONSTRUCTION

COMPLETION (SF)

YTD NET

ABSORPTION

(SF)

AVERAGE ASKING

RENT (Q4 2016)*

AVERAGE

ASKING RENT

(Q1 2017)*

AVERAGE ASKING

RENT (Q1 2017)**

AVERAGE ASKING

RENT (Q1 2017)***

ALL GRADES

CBD 6,069,900 18.5% 4,800 178,900 0 4,800 103.55 101.81 $18.66 €17.29

Park Circus Connector 948,200 25.6% 0 600,000 0 0 90.97 90.38 $16.57 €15.35

Rashbehari Connector 985,400 25.0% 0 452,000 0 0 87.29 88.66 $16.25 €15.06

Rajarhat 8,327,800 20.3% 18,200 1,829,000 0 18,200 38.91 38.63 $ 7.08 € 6.56

Sector –V, Salt Lake 12,169,700 43.1% 92,800 1,236,100 0 92,800 45.92 44.74 $ 8.20 € 7.60

TOTALS 28,501,000 30.0% 115,800 4,296,000 0 115,800 54.47 53.58 $ 9.82 € 9.10

GRADE A

CBD 1,375,200 31.2% 0 110,500 0 0 111.81 110.05 $20.17 €18.69

Park Circus Connector 710,300 25.2% 0 600,000 0 0 92.01 92.05 $16.87 €15.63

Rashbehari Connector 875,100 24.0% 0 452,000 0 0 88.12 88.02 $16.14 €14.95

Rajarhat 8,281,100 20.3% 18,200 1,829,000 0 18,200 38.91 38.63 $ 7.08 € 6.56

Sector –V, Salt Lake 10,533,900 46.1% 92,800 1,098,400 0 92,800 45.84 44.61 $ 8.18 € 7.58

TOTALS 21,775,600 33.8% 111,000 4,089,900 0 111,000 50.36 49.46 $ 9.07 € 8.40

Key to submarkets:

CBD - Park Street, Camac Street, AJC Bose Road, Theatre Road.



IT-BPM denotes Information Technology - Business Process Management

BFSI denotes Banking, Financial Services and Insurance





Numbers for the first quarter are based on market information collected until 10 th March 2017

2016 numbers have been recalibrated based on revision in inventory and vacant spaces

Office Snapshot Q1 2017MUMBAI, INDIA

MARKETBEAT





Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast

Overall Vacancy 16.21% 17.74% 1.53%*


Asking CBD Rentals

(INR/sf/month)

221.60 224.78 1.44%


* percentage points







the S&P BSE 100 Index gained about 12% in value in January-March

2017 period, indicating healthy performances for the top 100 large-

cap companies. However, the BSE IT Index, which tracks the





have resulted in the software industry body, the National Association

of Software and Services Companies (NASSCOM), lowering its IT

export growth target to 8-10% for the year ending March 2017. This

implies that leasing by IT-BPM companies could be adversely

impacted. Going ahead, it is expected that GDP growth could remain

stressed for the short term due to the hang-over impact of

demonetization on manufacturing and investments.

Delayed supply, limited leasingGrade A net absorption decreased by 70% from the previous quarter

to 350,000 square feet (sf) due to the delayed completion of pre-

committed buildings in the submarkets of SBD and Thane-Belapur

Road. Of the expected nearly 1.9 million square feet (msf) of Grade A

supply, only 230,000 square feet (sf) was completed during the

quarter because of prolonged delays in obtaining approvals from the

local regulatory authority. The new supply came from the completion

of a single project in the Central suburbs submarket.

Nearly 38% of the net absorption was concentrated in the Central

suburbs, followed by the submarkets of Malad/Goregaon (13%) and

Thane-Belapur Road (12%). Thane-Belapur Road continues to

attract occupiers’ interest, resulting into pre-commitments of nearly

100,000 sf recorded during the quarter.

Grade A weighted average rentals remained range-bound across

most submarkets during the quarter. An exception was the Central

suburbs that saw an increase of 3-4% owing to sturdy demand and

limited supply. Grade A vacancy levels remained similar to levels

from the previous quarter and stood at 17.9% on the back of weak

absorption amidst limited fresh supply.

OutlookNearly 2.1 msf of new Grade A supply is expected to be ready in the

next quarter. At the same time, demand is also expected to rebound,

mainly in the submarkets of Thane-Belapur Road and SBD. Average

rentals are expected to remain range-bound across most submarkets

in the upcoming quarter.

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MUMBAI OFFICE

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2010 2011 2012 2013 2014 2015 2016 Q1

2017


Office Snapshot Q1 2017MUMBAI, INDIA

MARKETBEAT











Key Lease Transactions Q1 2017PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET

Reliable Tech Park 25,000 Tata BSS Lease Thane-Belapur Road

Nirlon - IT Park 25,000 Citibank Lease Malad/Goregaon



Zillion Phase 2 230,000 NA A Central Suburbs



Empire Tower 1,500,000 NA Q3 2017 Thane-Belapur Road

SUBMARKETINVENTORY

(SF)

OVERALL

VACANCY RATE

YTD LEASING

ACTIVITY (SF)

UNDER CNSTR

(SF)

YTD

CONSTRUCTION

COMPLETION (SF)

YTD NET

ABSORPTION

(SF)

AVERAGE ASKING

RENT (Q4 2016)*

AVERAGE

ASKING RENT

(Q1 2017)*

AVERAGE AS

RENT (Q1 2017)**

AVERAGE ASKING

RENT (Q1 2017)***

ALL GRADES

CBD 10,411,900 5.5% 15,000 0 0 15,000 193.6 195.8 $35.90 €33.26

SBD 10,720,200 19.5% 33,100 2,959,000 0 33,100 243.4 243.0 $44.55 €41.27

Worli 4,149,500 13.6% 16,500 0 0 16,500 205.5 204.5 $37.50 €34.74

Lower Parel 10,526,400 13.5% 32,400 1,420,000 0 25,400 172.0 171.5 $31.44 €29.13

Andheri-Kurla 25,094,200 15.3% 130,500 3,780,400 0 130,500 113.2 113.4 $20.79 €19.26

Powai 6,127,700 3.4% 0 198,000 0 0 108.4 108.4 $19.87 €18.41

Malad/ Goregaon 16,165,000 18.8% 47,000 2,600,000 0 47,000 101.8 101.4 $18.59 €17.22

Vashi 3,740,500 10.8% 0 99,900 0 0 73.1 73.1 $13.39 €12.41

Thane-Belapur Road 18,444,400 17.8% 42,000 10,200,600 0 42,000 44.5 44.5 $08.16 €07.56

Thane 7,273,800 16.1% 46,500 620,000 0 46,500 56.9 57.0 $10.45 €09.69

TOTALS 126,460,200 15.3% 528,600 23,354,100 230,000 521,600 126.1 126.8 $23.25 €21.54

GRADE A

CBD 1,962,800 8.7% 0 0 0 0 224.8 224.8 $41.21 €38.18

SBD 7,754,700 20.7% 22,600 2,879,000 0 22,600 262.5 262.0 $48.03 €44.50

Worli 1,469,000 23.5% 16,500 0 0 16,500 224.8 223.9 $41.05 €38.03

Lower Parel 7,542,500 12.5% 32,400 1,420,000 0 32,400 176.1 175.6 $32.19 €29.82

Andheri-Kurla 11,182,700 18.9% 37,700 2,098,500 0 37,700 118.4 118.4 $21.70 €20.11

Powai 5,877,600 3.6% 0 198,000 0 0 108.4 108.4 $19.87 €18.41

Malad/ Goregaon 10,851,800 20.7% 47,000 2,600,000 0 47,000 104.2 103.6 $18.99 €17.60

Vashi 1,619,500 7.1% 0 0 0 0 83.1 83.1 $15.24 €14.12

Thane-Belapur Road 14,184,100 19.0% 42,000 7,350,800 0 42,000 44.8 44.8 $08.21 €07.61

Thane 5,136,000 19.5% 18,500 550,000 0 18,500 57.7 57.8 $10.60 €09.82

TOTALS# 76,967,300 17.9% 350,200 17,996,300 230,000 350,200 132.5 133.1 $24.39 €22.60



IT-BPM denotes Information Technology and Business Process Management Services





# Total figures contain submarkets not mentioned above


Key to submarkets:

CBD – Ballard Estate, Colaba, Churchgate, Fort & Nariman Point; SBD – Bandra-Kurla Complex, Bandra East, Kalina; Lower Parel includes Lower Parel, Parel and Dadar



Tel: +91 80 40465555

[email protected]

Office Snapshot Q1 2017PUNE, INDIA

MARKETBEAT



Pre-commitment / Net Absorption (Grade A)


Q1 16 Q1 17Y-O-Y

Change

12-Month

Forecast



Asking Rentals

(INR/sf/month)

65.56 65.26 -0.46%

YTD Net Absorption (sf) 510,600 814,400 59.50%

*percentage points





















Significant surge in supply and absorption; marginal decline in vacancy levelsPune recorded approximately 1.0 million square feet (msf) of new

commercial office supply during the first quarter of 2017, more than

double of the previous quarter. Majority (68%) of the total supply

are categorized as Grade A developments, concentrated in the

submarket of SBD East.

The quarterly Grade A net absorption was recorded as 814,400

square feet (sf), a 33% increase Quarter-on-Quarter (QoQ). 76%

of Grade A leasing was concentrated in the submarket of SBD

East. Quarterly Grade A leasing activity was driven largely by

companies in the IT-BPM sector with a 55% share, followed by the

consulting sector with a 23% share.

Amidst healthy leasing activities and significant supply addition,

Grade A vacancy rate in the city declined by 0.9 percentage points

to 9.4% at the end of March 2017. Grade A weighted average

rentals remained range-bound during the quarter.

OutlookApproximately 1.7 msf of Grade A supply is expected to become

available in the second quarter of 2017. In the wake of significant

supply addition and moderate leasing activity, Grade A vacancy

levels in the city may rise in short term. Rentals are expected to

remain stable in most submarkets.

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PUNE OFFICE

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Office Snapshot Q1 2017PUNE, INDIA

MARKETBEAT











Key Lease Transactions Q1 2017PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET

Magarpatta Cybercity Tower 12 44,300 John Deere Lease SBD East

ICC Trade Tower 38,000 Sailpoint Lease CBD

Key Sales Transactions Q1 2017

PROPERTY SF SELLER/BUYER PRICE SUBMARKET

Magarpatta Cybercity - Tower 12 44,000 NA/Investor NA SBD East


PROPERTY SF TENANT(S) GRADE SUBMARKET

Inorbit IT Building 600,000 NA A SBD East



World Trade Centre - Tower D 530,000 NA Q2 2017 SBD East

Solitaire – Tower I 400,000 NA Q2 2017 SBD East



Tel: +91 80 40465555

[email protected]

SUBMARKET INVENTORY (SF) OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY (SF)

UNDER

CONSTRUCTION

(SF)

YTD

CONSTRUCTION

COMPLETION (SF)

YTD NET

ABSORPTION (SF)

AVERAGE ASKING

RENT (Q4 2016)*

AVERAGE ASKING

RENT (Q1 2017)*

AVERAGE ASKING

RENT (Q1 2017)**

AVERAGE ASKING

RENT (Q1 2017)***

ALL GRADES

CBD 13,168,500 12.1% 235,000 1,854,400 24,000 192,900 80.61 79.49 $14.57 €13.50

SBD East 33,500,900 11.9% 914,200 9,181,200 819,000 788,900 61.27 62.35 $11.43 €10.59

SBD West 10,039,400 14.7% 171,200 6,630,700 75,600 123,500 63.92 64.52 $11.83 €10.96

PBD East 1,171,800 5.6% 0 960,000 0 0 56.10 56.10 $10.28 €09.53

PBD West 14,032,200 20.0% 62,800 6,509,700 87,500 62,800 48.56 49.40 $09.06 €08.39

Totals 71,912,800 13.8% 1,383,200 25,136,000 1,006,100 1,168,100 61.54 61.73 $11.32 €10.49

GRADE A

CBD 3,421,400 11.5% 113,600 1,245,000 0 99,100 95.30 96.25 $17.64 €16.35

SBD East 23,951,200 8.1% 733,100 8,735,000 600,000 621,300 69.33 70.34 $12.89 €11.95

SBD West 4,124,300 6.8% 73,900 6,200,000 0 50,700 66.26 66.35 $12.16 €11.27

PBD East 1,150,200 4.5% 0 800,000 0 0 55.00 55.00 $10.08 €09.34

PBD West 11,119,400 13.2% 43,300 5,485,000 87,500 43,300 49.21 50.58 $09.27 €08.59

Totals 43,766,500 9.4% 963,900 22,465,000 687,500 814,400 65.15 65.26 $11.96 €11.09



SBD refers to Suburban Business District

PBD refers to Peripheral Business District






Key to submarkets:

CBD: Laxmi Road, Camp, Bund Garden, Boat Club, Koregaon Park, Dhole Patil Road, Pune Station, Shivaji Nagar, FC Road, JM Road, Wakdewadi, SB Road, Model Colony, Ganeshkhind Road

SBD East: Kalyani Nagar, Kharadi, Mundhwa, Yerwada, Nagar Road, Viman Nagar, Hadapsar, Kondhwa

SBD West: Aundh, Baner, Pashan, Kothrud, Karve Nagar, Khadki, Paud Road

PBD East: Phursungi, Wagholi, Charoli, Solapur Road, Saswad Road, Katraj

PBD West: Hinjewadi, Wakad, Pimpri, Bhosari, Chinchwad, Bavdhan, Mulshi, Talawade, Tathawade, Nanded, Pimple Saudagar

office snapshot q1 2017 - cushman & wakefield · 2017-04-12 · office snapshot q1 2017...

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