25 CAGR: 20.

1%

Fourth largest sector in terms of FDI inflows

4 FY2012 FY2022

FDI in the sector is estimated to grow to USD25 billion in 10 years

FDI Inflows (USD billion)

CAGR: 2.4% 377

600

Rapid urbanisation bodes well for the sector

2011 2031 Policy

The number of Indians living in urban areas will increase from the current 377 million to about 600 million by 2031

support

Urbanisation (in millions)

CAGR: 6.1%

649.5

Indias construction market is expected to be the worlds third largest by 2020

360.0

India construction market is expected to more than double to USD649.5 billion by 2020 from USD360 billion in 2010
2020 Construction Market Source: Ministry of Tourism, Census 2011, Aranca Research

2010

201011

Growingdemand demand Growing

Demand for residential properties has surged due to increased urbanisation and rising household income Growing economy driving demand for commercial and retail space

Attractive opportunities
Growing requirements of space from sectors such as education and healthcare Growth in tourism providing opportunities in the hospitality sector

2020E
Market size: USD180 billion

Market size: USD55.6 billion

Advantage India
Increasing Investments

FDI in real estate of more than USD21.8 billion between April 2000 and November 2012 During April 2012January 2013, the real estate sector accounted for 8.8 per cent of total FDI inflows into India

The engineering sector is delicensed; Allocation ofFDI USD2.8 billion 100 per cent is allowed in for therural housing sector for FY14 budget Due government to policy support, was The has there allowed FDI of cumulative FDI of USD14.0 billion into up to 100 per cent in development the sector over April 2000 February projects for townships and 2012, making up 8.6 per cent of total settlements FDI into the country in that period

Policy support

Source: BMI (Business Monitor International), Department of Industrial Policy and Promotion, Aranca Research Notes: FDI - Foreign Direct Investment; 2020E - Estimate for 2020

 Fragmented market with few large players Residential space Absorption rate of new residential units across six key cities to increase at a CAGR of 7 per cent to 251 million sq ft in the next two years Few players with presence across India Of a total supply of 607 million sq ft of office space planned in 10 major cities, around 229 million sq ft would come up during 2012 14 FDI in multi- brand retail to boost demand Fragmented market with few national players Of a total planned supply of 81 million sq ft across major cities, around 44 million sq ft would come up during 201214 A competitive market with many players Over 121,000 hotel rooms in the country as of 2011 The hotel industry grew 13 per cent during 201112

Commercial space

Real estate sector

Retail space

Hospitality space

SEZs

The government has formally approved 577 SEZs* Majority of the SEZs are in the IT/ ITeS sector

Source: Cushman and Wakefield, Knight Frank, CRISIL, Aranca Research Notes: SEZ - Special Economic Zone. IT - Information Technology, ITeS - Information Technology Enabled Services, * - As of March 2013

Real estate contributes about 5 per cent to Indias GDP The total revenue generated in FY11 stood at USD66.8 billion

Market size of real estate in India (USD billion)

CAGR: 10.0%
53.3
50.1 55.6

66.8

FY08

FY09

FY10

FY11

Source: BMI, Aranca Research Note: CAGR - Compounded Annual Growth Rate

The urban housing shortage is estimated at 18.8 million in 2012 The housing shortage in rural India stood at 47.4 million as of 2012 The housing shortage in urban and rural India will be around 21.7 and 19.7 million units respectively in 2014
15

Urban-rural housing shortage (million)

47

34 30 27 25 18 19 27 21 26 19

22 20

Significant increase in real estate activity in cities like Indore, Raipur, Ahmadabad, Jaipur and other two-tier cities; this has opened new avenues of growth for the sector
2001 2005 2007 Urban 2008 2010 Rural 2012 2014E

Source: Ministry of Housing and Urban Poverty Alleviation, RBI, CRISIL, Aranca Research Note: E - Estimates

Demand projections across top 7 cities (000 units)

A localised, fragmented market presents opportunities for consolidation Few large, pan-India players such as DLF and Unitech
710 600 500 350 410

Scenario

Key drivers

Rapid urbanisation Rise in the number of nuclear families Easy availability of finance Repatriation of NRIs and HNIs

2010

2011

2012

2013

2014

Demand analysis of top 7 cities (000 units) 2010-14

830 800

Notable Notable Trends Trends

Bengaluru

Chennai

Mumbai

NCR

Pune

Source: Cushman & Wakefield, Aranca Research Notes: NRI - Non-resident Indian; HNI - High Net-worth Individual

Hyderabad

Kolkata

Demand to grow at a CAGR of 19 per cent between 2010 and 2014 - 40 per cent of this from Tier 1 cities At 3x to 4x, demand-supply gap is highest in the low and mid income segments Increase in real estate projects in two-tier and three-tier cities

300 220 180 160 160

Demand projections across top 7 cities (million sq ft)

Few large developers with a pan-India presence dominate the market Operating model has shifted from sales to a leaseand-maintenance

Scenario

36

39

42

44

33

Key drivers

Rapid growth in services sectors: IT/ITeS, BFSI and Telecom Rising demand from MNCs Demand for office space in Tier 2 cities

2010

2011

2012

2013

2014

Demand analysis of top 7 cities (million sq ft) 2010-14

39

38

36

30

Bengaluru

Chennai

Mumbai

NCR

Hyderabad

Pune

Trends

Source: Cushman & Wakefield, Aranca Research Notes: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance Services; CBD - Central Business District, SBD - Special Business District, NCR - National Capital Region

Kolkata

Notable Notable Trends

Mumbai, NCR and Bengaluru account for 46 per cent of total office space demand in India Demand growth projected to be the highest in Tier 2 cities such as Kolkata and Chennai during 201014 Business activity shifting from CBDs to SBDs, Tier 1 to Tier 2 cities

25

22 10

Demand projections across top 7 cities (million sq ft)

Currently, retail accounts for a small portion of the Indian real estate market Organised retailers are few, and the organised retail space is mostly developed by residential/office space developers
3 10

Scenario

7 4 5

Key drivers

Booming consumerism in India Organised retail sector growing 25-30 per cent annually Entry of MNC retailers

2010

2011

2012

2013

2014

Demand analysis of top 7 cities (million sq ft) 2010-14

8 7 6

Bengaluru

Trends

Source: Cushman & Wakefield, Aranca Research

Hyderabad

Chennai

Mumbai

NCR

Kolkata

Pune

Notable Trends Notable Notable Trends

NCR accounts for about 30 per cent of the total mall supply About 53 per cent of demand for total mall space in India expected to come from top seven cities Demand for retail space on high streets is quite high, as well Increase in FDI limit for multi-brand retail will lead to significantly higher demand for retail space

3 2 2 2

Demand projections (no of rooms)

NCR and Mumbai are by far the biggest hospitality markets in India, followed by Bengaluru, Hyderabad and Chennai Besides hotels, the hospitality market comprises serviced apartments and convention centres

43,828 32,660 35,503 38,789

Scenario

Key drivers

A robust domestic tourism industry The increasingly global nature of businesses boosting business travel Tax incentives for hotels and higher FSI

2010

2011

2012

2013

Indian

Demand analysis of top 7 cities (no of rooms) 2010-14

10,519 10,519

4,821 3,945 3,506 2,630 1,315 Bengaluru Chennai Mumbai NCR Hyderabad Pune Kolkata

Notable Notable Trends Trends

Serviced apartments appear particularly attractive within the hospitality space Government initiatives to promote tourism in Tier 2 and Tier 3 cities is generating significant demand for hotels in such cities, especially for budget hotels

Source: Knight Frank India, Aranca Research Notes: FSI - Floor Space Index

Growth in tourism

Urbanisation

Epidemological changes

Growth drivers

Growing economy

Easier financing

Policy support

The Indian economy experienced robust growth in the past decade and is expected to be one of the fastest growing economies in the coming years Demand for commercial property is being driven by the countrys economic growth

Real GDP growth rates of major economies

12% 10% 8% 6% 4% 2% 0% 2010 2011 2012F 2013F 2014F 2015F 2016F 2017F
China India Advanced economies Emerging and developing economies

Source: IMF, Aranca Research

The increasing urban population is expected to cross 600 million by 2031 Urbanisation and growing household income is driving demand for residential real estate and growth in the retail sector

Population breakup of India (million)

1,470 1,210

856

1,040

600 377

220

290

1991

2001 Urban Population

2011 Total Population

2030E

Source: Indian Census, Knight Frank, Mckinsey estimates, Aranca Research Note: E - Estimate

In 2012, 6.6 million foreign tourists are estimated to have arrived in India The number of foreign tourists arriving in India expanded at a CAGR of 5.3 per cent during 200712

Foreign tourists arriving in India (million)

6.6

CAGR: 5.3%
5.8 4.4 5.1 5.3 5.2

6.3

2006

2007

2008

2009

2010

2011

2012

Source: Ministry of Tourism, Aranca Research

India is estimated to have earned about USD17.7 billion from the tourism sector in 2012 The growing inflows from tourists is expected to provide a fillip to the hospitality sector

Foreign exchange earnings from tourism in India (USD billion)

CAGR: 10.6%
14.2
10.7 8.6 17.7 16.6

11.7

11.4

2006

2007

2008

2009

2010

2011

2012

Source: Ministry of Tourism, Aranca Research Note: H1 2012 - Figures up to 2012 (Jan-June )

Total FDI in the real estate sector during April 2000 January 2013 stood at around USD22 billion Currently, real estate and construction accounts for over 22 per cent of total FDI, up from less than 4 per cent in 2006

FDI in real estate as a per cent of total FDI in India

11.1 % 11.0 %

10.3 % 8.9 % 7.4 % 6.3 % 7.1 %

2.7 % 0.7 % 2006

3.0 %

2007

2008

2009 Real estate

2010

Construction activities

Source: Dept of Industrial Policy & Promotion, Aranca Research

There have been 110 deals in the real estate space between 2001 and the first half of 2011 The biggest disclosed deal was the acquisition of DLF Assets shares by Caraf Builders for USD696 million

Major acquisitions in real sector in India Value (USD million)

696.5 513.6 320 318 223.1

Target
Caraf Builders Cowtown Land Dvlp Pvt Ltd Compact Disc film city Oceanus Real Estate Indiabulls Properties Pvt Ltd Embassy Property

Acquirer
DLF Assets ltd Lodha Group Jeff Morgan Warburg Pincus Indiabulls Property Invest Trust Blackstone

Year
2009 2011 2011 2011 2012

200

2012

Source: Cushman & Wakefield, Venture Intelligence, Aranca Research

Of the 43 private equity (PE) investments witnessed in the sector during 2012, 35 had an announced value of USD1.14 billion In terms of volume, residential projects accounted for 65 per cent of overall investments in the sector during 2012, while commercial projects accounted for 16 per cent Foreign funds constituted almost 80 per cent of total investments in the sector compared with 50 per cent in 2011 Mumbai continued to remain the hotspot investments, followed by Bengaluru and NCR for PE

Top 5 PE deals in Indian real estate sector in 2012 Investment (USD million)

Investor

Investee
Manyata Embassy Business Park Godrej Properties Godrej Properties Supertech Bangalorebased RMZ Corp

Blackstone

160.0

APG and Group of investors Government of Singapore Investment Corporation (GIC) Morgan Stanley Real Estate Investment Baring Private Equity Partners India

140.8

98.2

A shift in trend is evident from the fact that the maximum number of PE deals in the year were executed through Special Purpose Vehicles (SPV) as against via both entity and SPV modes in the previous year Another major trend evident in recent times is the increasing focus of private PE players on high-end and luxury projects

91.4

91.4

Source: Grant Thornton, Venture Intelligence, Aranca Research

100 per cent FDI permitted in real estate projects within Special Economic Zone (SEZ) 100 per cent FDI permitted for developing townships within SEZs with residential areas, markets, playgrounds, clubs, recreation centers, etc.

Share of SEZ exports in total exports of India

74% 90% 88%

72%

75%

69%

Exports from SEZs registered a yoy growth of 15.39 per cent in 201112 and accounted for 30.6 per cent of total exports during AprilDecember 2012
26% 28% FY11 Other

Industry players, including realtors and property analysts, are rooting for the creation of "special residential zones" (SRZs), along the lines of SEZs Minimum land requirement has been brought down from 1000 hectares to 500 hectares for multi-product SEZ and for sector-specific SEZs to 50 hectares

25% FY12

31%

10% FY08

12% FY09 FY10 SEZ Exports FY13*

Source: Ministry of Commerce and Industry, Aranca Research * - April 2012 to December 2012

For updated information, please visit www.ibef.org

Ease in housing finances

Additional deduction of up to USD1,841 on interests payable on home loans of up to USD46,032 announced in the Union Budget 201314 To liberalise scheme of interest subversion of 1 per cent on home loan by including loans of up to USD31,250 for houses that cost up to USD52,080

Housing for economically weaker sections

Allocation of USD1.1 billion for Rural Housing Fund in FY14 budget Allocation of USD0.37 billion for Urban Housing Fund in FY14 budget to bridge the huge shortage of housing in certain urban areas

FDI

The government has allowed FDI of up to 100 per cent in development projects for townships and settlements FDI of up to 100 per cent is allowed in the hotel and tourism sector through the automatic route

For updated information, please visit www.ibef.org

Largest real estate company with revenues of USD1.4 billion (FY13)

Market capitalisation of USD7.2 billion

Founded by Chaudhary Raghavendra Singh

Net land bank of 348 million sq. feet

Alliance with Hilton International

Building Indias largest mall in Gurgaon

Ventures into grade A office spaces

FY13 USD1.4 billion turnover FY06 USD238 million turnover

Focuses on IT Parks and

next generation malls

Commenced development of DLF Cyber City, Gurgaon

Developed 3000 acre DLF City in Gurgaon

Development of 22 Urban colonies

1940 1950 1980 1990 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Company website, Aranca Research, Notes: sq. ft. - Square Feet

Key Facts Started its first project in Mumbai in 1991 National real estate developer with presence across 12 cities Differentiated joint development business model resulted in a debt-equity ratio of less than one The current potential developable area stands at 82.2* million sq ft

Distribution of ongoing projects by area (as of December 2012)

18.4% Residential

Commercial 81.6%

Ranked one of Indias top 10 builders by Construction World Architect & Builder Awards, 2011
Consolidated total income of USD173.1 million in FY13
Source: Company website, Aranca Research * As on December 31, 2012

Five new projects with 4.3 mn sqft of saleable area added to portfolio in FY13 YTD

Revenues (USD million)

Profit before taxes (USD million)

173.1 160.6

51.8

CAGR: 19.6% CAGR: 32.8%

99.1 32.1 28.6 26.0 22.2 56.5 40.3 44.6 18.1

FY08

FY09

FY10

FY11

FY12

FY13

FY08

FY09

FY10

FY11

FY12

FY13

Source: Company website, Aranca Research

The entry of major private players in the education sector has created vast opportunities for the real estate sector The top seven cities i.e. Hyderabad, Bengaluru, Mumbai, Delhi, Pune, Chennai and Kolkata are likely to account for 70 per cent of total demand for real estate in the education sector

Real estate demand in education sector (seven top cities)

2014F

16

2013F

15.5

2012F

15

2011F

14.5

2010

14

Area (million square feet)

Source: Cushman and Wakefiled, Aranca Research

NCR is expected to have the highest incremental demand from the education sector The rising young population of India is expected to drive this space

Incremental demand across seven major cities (million sq ft)

NCR 4 Hyderabad 3 2 1 0 Bengaluru Pune Mumbai

Kolkata

Chennai

Source: Cushman and Wakefiled, Aranca Research Notes: NCR - National Capital Region

Healthcare

The healthcare sector is estimated to grow at an annual rate of 15 per cent to USD100 billion by 2015 India is expected to need additional 937,000 beds by 2015 India still needs to add 3 million hospital beds to meet the global average of three for every 1,000 people

Senior citizen housing

Emergence of nuclear families and growing urbanisation has given rise to several townships that are developed to take care of the elderly A number of senior citizen housing projects have been planned; the segment is expected to grow significantly in future

Service apartments

Growth in the number of tourists has resulted in demand for service apartments This demand is likely to be on uptrend and presents opportunities for the unorganised sector

Source: Fitch Ratings, Aranca Research

Foreign tourist arrivals are expected to increase at a CAGR of 11.7 per cent during 201215 The number of foreign tourists arriving in India by 2015 is anticipated to be over 9.2 million

Forecasts of foreign tourists arriving in India (million)

CAGR: 11.7%
7.9 6.6 8.5 9.2

2012

2013F

2014F

2015F

Source: Ministry of Tourism, BMI, Aranca Research

Foreign exchange earnings from tourism is expected to rise at a CAGR of 4.1 per cent during 201215 Foreign exchange earned is forecast to cross USD19 billion in 2015

Forecasts of foreign exchange earnings from tourism in India (USD billion)

19.9

CAGR: 4.1%
19.0 18.1 17.7

2012

2013F

2014F

2015F

Source: BMI, Aranca Research Note: F stands for Forecasts

The number of hotel rooms in India as of 2011 stood at 121,000 50,000 new hotel rooms are expected to be added over the next 45 years across Indias top six cities The number of hotel beds in the country is expected to increase to 443,000 by 2015
98 210

Capacity of hotels in India (000)

443 392 339 262 241 295

176
135 109 154

197

121

2009

2010

2011

2012F

2013F

2014F

2015F

Number of hotel rooms

Number of hotel beds

Source: BMI, Cushman & Wakefield, Aranca Research Note: F - Forecast

The Southern Indian States Andhra Pradesh, Tamil Nadu and Karnataka have been the major drivers of economic growth in India over the last decade. The three states together account for about 22 per cent of Indias GDP Nearly 45 per cent of Indias office stock is represented by these states; over 64 per cent of the countrys IT SEZs are housed in this region Office stock in the Southern cities is projected* to grow at a CAGR of 8 per cent between 2012 and 2016
Note: * - Projections by Jones Lang LaSalle

Office market in Southern India (in million sq ft)

25 20 15 10 5 0 2002 2004 2006 2008 2010 2012E 2014F 2016F Vacancy Rate - RHS Supply Net absorption 20% 16% 12% 8% 4% 0%

Source: Jones Lang LaSalle, Aranca Research

Net absorption rate in Southern Indias residential market is once again climbing up to pre-crisis peaks; during 1Q12, net absorption rate stood at 15.1 per cent, compared to 17.8 per cent in 1Q08 A growing migrant population due to increasing job opportunities, together with healthy infrastructure development, is underpinning demand in the regions residential real estate market

Residential market in Southern India (number of units)

25,000 20,000 15,000 10,000 5,000 0 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 New launches Net absorption Absorption rate - RHS 25% 20% 15% 10% 5% 0%

Source: Jones Lang LaSalle, Aranca Research

The Confederation of Real Estate Developers Associations of India (CREDAI)

National Secretariat, 703, Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi 110 001 Tel: (011) 43126262/43126200 Fax: 91 11 43126211 E-mail: info@credai.org Website: www.credai.org

Builders' Association of India (BAI)

G-1/G-20, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai 400034 Tel: 91 22 23514134, 23514802, 23520507 Fax : 91 22 23521328 E-mail: bai@vsnl.com, baihq.mumbai@gmail.com Website: www.baionline.in

BFSI: Banking, Financial Services and Insurance CAGR: Compound Annual Growth Rate CBD: Central Business District FDI: Foreign Direct Investment FSI: Floor Space Index HNI: High Net-worth Individual GOI: Government of India INR: Indian Rupee IT/ITeS: Information Technology/Information Technology enabled Services MNC: Multinational Corporation NRI: Non Resident Indian

SBD: Special Business District SEZ: Special Economic Zone USD: US Dollar Wherever applicable, numbers have been rounded off to the nearest whole number

Exchange Rates (Fiscal Year) Year

2004-05 2005-06 2006-07

Exchange Rates (Calendar Year) Year

2005 2006 2007 2008

INR equivalent of one US$

44.95 44.28 45.28

INR equivalent of one US$

45.55 44.34 39.45 49.21

2007-08
2008-09 2009-10 2010-11 2011-12 2012-13

40.24
45.91 47.41 45.57 47.94 54.31

2009
2010 2011 2012 2013

46.76
45.32 45.64 54.69 54.45
Average for the year

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