India Equity Research | Real Estate Sector Update Unitech Buy 18

Mahindra Lifespaces Hold 1

MONTHLY REALTY PULSE Brigade Enterprises Buy 1

Festival season a cracker, but Mumbai fails to join the party

Robust volumes in festival season; Mumbai the exception

Volumes on a pan-India level were robust across cities in September-October 2010,
with the NCR region and South Indian cities of Bengaluru and Chennai continuing to
post uptick in volumes. Also, inventory levels remained steady at around seven
months in spite of new launches across India. However, Mumbai has been the
exception with volumes declining ~40% from peak of May 2009 which is attributable
to the fresh round of price hikes of 15-20% since April 2010 effected by developers,
which has dampened buyers’ sentiments. We expect volumes to continue to be
robust in 2010, with stable prices across India, except Mumbai, where we expect
prices to correct ~10% in the near term and revert to April 2010 level.

Proposed monetary policy changes may impact premium segment

The Reserve Bank of India (RBI) has proposed capping of loan-to-value (LTV) ratio
in housing loans by banks to 80% and increased risk weightage for residential
housing loans of INR 7.5 mn and above in its November 2010 Monetary Policy
Review. This is expected to dampen overall sentiment in the real estate sector,
especially in Mumbai.

Commercial/retail leasing steady with marginal rental uptick

In Q3CY10, commercial leasing activity across India continued to remain steady with
marginal uptick in rentals of ~5-10% in select micro-markets. Bengaluru is the
strongest market with YTD absorption (Jan-Sep 2010) of ~8 msf and is on track to
achieve ~10 msf of leasing for CY10, which is on par with area leased in CY07-08.
Mumbai and NCR are also witnessing leasing activity in select projects, with other
cities such as Kolkata, Chennai and Hyderabad continuing to see high vacancy
levels.

Outlook: Maintain ‘Overweight’ stance on real estate sector

After a muted July-August where launches/execution were on the backburner, there
is renewed activity from September 2010 in terms of new launches and project
execution. We expect improved traction in the coming months backed by a positive
hiring outlook and salary hikes while rising input costs and impact of rising
borrowing costs are key negative risks. We reiterate our ‘Overweight’ stance on
the sector with DLF, Anant Raj Industries, Brigade Enterprises, and Orbit
Corporation being our top picks.

Valuation snapshot
Company Current M. Cap CMP NAV Prem./(Dis.)
Reco (INR Bn) (INR) (INR) to NAV (%)
Anant Raj Industries Buy 37.6 128 242 (47.3)
DLF Buy 533.4 314 417 (24.7)
Orbit corporation Buy 11.1 103 181 (43.1)
Sobha Developers Hold 31.2 318 333 (4.4)
November 16, 2010

Aashiesh Agarwaal, CFA +91 22

4063 5491
aashiesh.agarwaal@edelcap.com

Adhidev Chattopadhyay +91 22 6623

3358
adhidev.chattopadhyay@edelcap.com

Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL <GO>, Thomson First Call, Reuters and Factset. Edelweiss Securities Limited
Real Estate

Contents

Residential: Pan-India volumes robust, ex-Mumbai ..........................................................3

Key News ..............................................................................................................8

Construction cost indicators .....................................................................................10

Affordability indicators ............................................................................................11

Commercial: Leasing activity and rentals steady ............................................................12

Retail: Rentals bottoming out ...................................................................................15

2 Edelweiss Securities Limited

 Monthly Realty Pulse

Residential: Pan-India volumes robust, ex-Mumbai

Mumbai volumes decline; price increases a dampener

Chart 1: Mumbai volumes below

peak R
e
7,500 25
(
gi
m st
o r
n a
t ti
h o
s n
6,200 20 ) s
( ) 10,000
u
ni
8,000
ts
) 4,900 15
6,000
I M
n o
v n
e t
n hl
t y
o
r
3,600 10 y 4,000
o
2,300 5
f
(
N
1,000 0
u
09 10 m
09 09 09 10 10 10 b
- - - - - - - - e
Ja Ap Oc Ja Ap r 2,000
n r Jul t n r Jul Oct
0
3M volumes MA Inv / 3m MA
Source: PE Analytics, Edelweiss 0 0 0 0 0 0 0 0 1 1
research 07 7 7 8 8 8 9 9 9 0 0 10
-- -- --- - - ---

M S M S M S M
a e Ja a e Ja a e Ja a Se
Jan y p n y p n y p n y p
Source: DGR Mumbai, Edelwei
researc

0• In Mumbai, volumes (3 month moving average) declined significantly by ~40% as of October 2010 since the
peak in May 2009. Although inventory levels continue to remain stable at ~9 months as of October 2010, we
believe the fresh round of price hikes of 15-20% since April 2010 has dampened buyers’ sentiments.

0• Additionally, data on property registrations in the city available from the stamp duty and registration office
indicates that October 2010 saw ~5,300 property registrations, exhibiting a declining trend since July 2010.

0• With the beginning of the festival season from September 2010, the Mumbai market has seen a number of new
launches. The pricing and positioning trend adopted by developers appears to indicate a departure from a cash-
flow/volume maximization to a margin maximization strategy.

0• As highlighted in our report Mumbai Property Expo – festive season fails to bring cheer, dated October 25,
2010, we expect prices to correct ~10% in the near-term and revert to April 2010 level. For the festival season,
we expect sales off take only in select projects with a broader trend of tepid volume off take in new project
 launches. Additionally, RBI’s proposed capping of LTV ratio in housing loans by banks to 80% and increased risk
weightage for residential housing loans of INR 7.5 mn and above is expected to serve as a dampener for overall
sentiment in Mumbai.

Edelweiss Securities Limited 3

 Real Estate

Gurgaon market stable; Noida begins to taper off

Chart 3: Gurgaon
Chart 4:volumes stableoff; volumes remain healthy
Noida tapers
13,500 23
3,000 (
m
o
nt
h
10,800 18 s)
(
u
2,400 ni
( ts
u ) 8,100 14
ni
In
ts v
) 1,800 e
nt
or
5,400 9 y

2,700 5

0 0
1,200 1
09 10 0

600 09 09 09 10 10
- - - - - - - -
A
0
Ja Ap Oc Ja p
1 n r Jul t n r Jul Oct
09 10 0
09 09 09 10 10 3M volumes MA Inv / 3m MA
- - - - - - - - Source: PE Analytics, Edelweiss research
A
Ja Ap Oc Ja p
n r Jul t n r Jul Oct

3M volumes MA Inv / 3m MA
Source: PE Analytics, Edelweiss
research

0• Gurgaon volumes, which had slackened in July-September 2010, have

revived in October with healthy demand for new launches. As we have
highlighted previously, our channel checks indicate that the decline is
largely attributable to limited new launches in the market coupled with
low ready inventory of apartments. With a number of launches in the
festival season, volumes have picked up again on the back of robust
demand in the region. An interesting monitorable is the response to
the expected launch of residential plots in Gurgaon by DLF in
November 2010.

0• Noida volumes have begun to taper off in September-October 2010

but remain strong in absolute terms with three month moving average
volumes remaining above 10,000 units (Noida had seen a sharp pick
up in launches July 2009 onwards creating a high base effect).

Bengaluru and Chennai volumes continue to post an uptick

2,250 30

Chart 5: Bengaluru absorption trend

 1,750 30
1,800 (
( m
o
u n
n t
it h
s
s 1,400 24 )
) 1,350 (
u
ni
ts
) 1,050 18
I
900 n
v
e
n
450 t
o
r
700 12 y
0

0 0 0 1 1 1
0 350 6
9 9 09 9 09 9 0 0 10 0 10
--- -- - - -- --
J N J 0 0
a M J o a M Ju
n ar y ul p v n ar y l p
M - --

Ma Se a Se
-- - -- - --

J
y Jul y ul p
3M volumes MA Inv / 3m MA
N J
M
Source: PE Analytics, Edelweiss research Ja
n
M
ar Ma S ep
o
v
a
n M ar a Se

3M volumes MA Inv / 3m MA
Source: PE Analytics, Edelweiss research

4 Edelweiss Securities Limited

 Monthly Realty Pulse

0• Bengaluru volumes continued to remain strong in September 2010

(three month moving average of ~2,000 units) with inventory level
continuing to decline as absorption has outpaced launches for 15
months. With volumes still hovering well below peak volumes of
~3,500 units/month in 2008, we believe that Bengaluru may continue
to surprise positively on volumes. Volumes are expected to be
supported by end-user demand in an environment of increased hiring
and salary hikes.
0• Inventory levels in the Chennai market have also dipped with
transactions registering an uptick in April-September 2010. Chennai
volumes have now reached the 2008 peak of ~1,500 units and
sustainability of this volume trend will be a key monitorable.

Pune and Ahmedabad volumes remain steady

Chart 7: Pune absorption

trend 1,250
4,000

1,000
(
3,200 u
( ni
u ts
ni ) 750
ts
) 2,400

500

1,600 250

800 0
0 09 1 1
0 9 09 09 0 0
0 1 1 0 0 1
9 0 0 10 9 9 0 10
0 0 0
- ---- ---- --

090 y p y
9 9 9 9 10 10 Ja M Ju Se
No
Ja M M
n a r Ma l n ar a Ju l
--- ---- ----

v
J M J M
a a J a a
n r y ul p n r y Jul p 3M volumes MA Inv / 3m
M Source: PE Analytics, Edelw
SeN
research
a ov Ma Se

3M volumes MA Inv / 3m MA
Source: PE Analytics, Edelweiss research

0• While volumes in tier-I cities (ex-Mumbai) continue to exhibit robust demand,

tier II cities like Pune and Ahmedabad are posting steady volumes, with
inventory levels registering a steady decline. A key monitorable will be potential
upside to current volumes in an improved economic scenario.
Edelweiss Securities Limited 5
 Real Estate

Table 1: Key pan-India residential projects launched in September/October 2010

Completion
Developer Project name Micro-market Location BSP in INR/sf date
Gurgaon and Noida
Sare Group Green Parc Sector 92 Gurgaon 2700-3813 Sep-12
Mapsko Builder Royale ville Ph-2 Sector 82 Gurgaon 2790-3290 Dec-13
Mahindra Lifespaces Aura Phase-II Sector 110 Gurgaon 3,175 Dec-12
IREL (Indiabulls) Indiabulls Gurgaon Housing (Enigma) Sector 110 Gurgaon 5,000 Dec-13
Vipul Group Vipul Lavanya Sector 81 Gurgaon 3,250 Dec-13
Parkwood Developers Parkwood Westend Sector 92 Gurgaon 2,100 Dec-13
Universal Group Aura Sector 82 Gurgaon 3,165 Mar-13
JMD Builders Samanvaya Sector 91 Gurgaon 2,629 Mar-14
Tulip Infratech Tulip Violet Sector 69 Gurgaon 3,750 Dec-13
Jaypee Kube Sector 128 Noida 3500-3800 Dec-13
3C Group Lotus Zing Ph-2 Sector 168 Noida 3,175 Apr-14
3C Group Lotus Panache Island Ph-3 Sector 110 Noida 3,350 Dec-14
Eldeco Infrastructures Mangolia Park Sector 119 Noida 2700-3000 Mar-14
Jaypee Klassic Sector 129 Noida 3,600 Dec-13
Mahagun My Wood Sector 16C Gr Noida 2,090 Dec-13
Jaypee The Castille Jaypee Greens Gr Noida 6,500 Sep-13
Jaypee Kassia Floors Taj Expressway Gr Noida 2,850 Dec-13
Amrapali Group Dream Valley Techzone Gr Noida 3,040 Dec-13
Rudra Developers Palace Heights Sector 1 Gr Noida 2,100 Dec-12
Mumbai
NL Builders Airavath Dahisar(E) Mumbai 6,020 May-14
IREL (Indiabulls) Sky Forest Lower Parel Mumbai 22,000 Dec-13
RNA Corp. RNA Address Santacruz(E) Mumbai 15000-17000 Mar-13
Shining Sun Construction Gulmohar Tarrace Mahalakshmi Mumbai 10,500 Aug-12
Mahindra Lifespaces Mahindra Eminente Ph-II Goregaon(W) Mumbai 10,000 Mar-14
Lokhandwala Builders Minerva Mahalakshmi Mumbai 22,500 Dec-14
Sanghvi Group Eco City Dahisar(E) Mumbai 5,454 Dec-13
Lodha Group Auram Grande Kanjurmarg Mumbai 8000-8100 Dec-14
HDIL Whispering Towers Mulund(W) Mumbai 6,840 Dec-14
Lodha Group World Crest Worli Mumbai 28,000 Dec-14
IREL (Indiabulls) Sky Bleu Worli Mumbai 27,000 Dec-14
Bengaluru
Concorde Group Mist Valley-Villas Sarjapur Road Bangalore 2560-3133 Dec-12
Confident Group Phoenix Sarjapur Road Bangalore 2,900 Nov-12
Confident Group Leo Sarjapur Road Bangalore 3,800 Jul-13
GR Constructions Shree Nivas Ph-II Hosur Road Bangalore 2,200 Jun-11
Janpriya Greenwood Ph-II Tumkur Road Bangalore 1,745 Dec-10
Chaithanya Projects Swojas White Field Bangalore 9,800 Dec-10
Patel Developers Smondoville Ph-II Electronic City Bangalore 2,950 Mar-13
SPL Housing Samethana Ph-II Hoskote Bangalore 2,200 Mar-12
Sobha Developers Classic Haralur Road Bangalore 4,300 Dec-13
Sobha Developers Forest View Banashankari Bangalore 5000-5777 Dec-13
SLS Builders Sun Flower Sarjapur Road Bangalore 2,000 Dec-11
Mahaveer Reddy Struc. Mahaveer Rhyolite Electronic City Bangalore 2,500 Dec-13
Mantri Developers Mantri Serenity Kanakpura Road Bangalore 3,090 Sep-13
Salarpuria Luxuria Mallesvaram Bangalore 5,600 Nov-13
Source: PE Analytics, Edelweiss research

6 Edelweiss Securities Limited

 Monthly Realty Pulse

Table 2: Residential prices across India as of October 2010

Residential Residential Residential
Mumbai Metropolitan prices prices prices
Region (INR/sf) National Capital Region (INR/sf) Rest of India (INR/sf)
Mumbai City New Delhi Bengaluru
Colaba/Cuffe Parade 50,000 Prithviraj Road 50,000 Lavelle Road 18,000
Marine Drive 40,000 Aurangzeb Road 50,000 Ulsoor 15,000
Napean Sea Road 40,000 Chanakyapuri 45,000 Malleswaram 6,000
Worli 30,000 Golf Links 45,000 Koramangala 5,000
Mahalaxmi 25,000 Shanti Niketan 35,000 Sanjay Nagar 5,000
Mumbai Central 23,000 Vasant Vihar 30,000 Jayanagar 4,500
Lower Parel 22,000 Anandlok 27,000 Hebbal 4,300
Dadar/Mahim 16,000 Friends Colony 25,000 JP Nagar 4,000
Byculla 16,000 Greater Kailash - I & II 20,000 Whitefield 3,400
Sewri/Parel 12,500 Mayur Vihar 14,500 Bannerghatta 3,200
Sion 12,000 Okhla Tehkhand 12,750 Sarjapur 3,200
Wadala 12,000 Shivaji Marg 11,000 Yelahanka 3,140
Central Suburbs Model Town 8,700 Kanakpura 2,900
Kurla 7,000 Kapashera 5,000 Devanahalli 2,800
Chembur 8,000 Dwarka 5,000 Electronic City 2,600
Ghatkopar 9,000 Gurgaon/Manesar Tumkur Road 2,400
Vikhroli 6,500 DLF Phase V 7,600 Doddaballapur 2,200
Bhandup 6,500 Sector 66 6,000 Chennai
Mulund 6,800 Sushant Lok III 6,000 Nungambakkam 12,000
Thane 5,500 Sector 50 5,800 Adyar 10,000
Dombivali 3,800 South City II 5,500 Anna Nagar 6,500
Kalyan 3,000 Sohna Road 4,700 T Nagar 6,000
Western Suburbs Sector 109 3,200 Kilpauk 5,000
Bandra West 20,000 Sector 103 2,900 OMR Road 3,000
Bandra East 15,000 Manesar 2,600 Kolkata
Khar 18,000 Sector 91 2,600 Park Street 8,000
Santacruz 15,000 Dharuhera 1,900 Ballygunge 6,000
Vile Parle 13,000 Noida EM Bypass 4,500
Andheri 11,500 Jaypee Greens 6,000 Rajarhat 2,600
Jogeshwari 8,000 Unitech Grande 6,000 Jessore Road 2,500
Goregaon 9,000 Sector 52 4,500 Pune
Malad 8,000 Sector 100 3,700 Koregaon Park 7,000
Kandivali/Borivali 7,500 Sector 119 3,300 Aundh 4,500
Dahisar 6,000 Sector 77 3,200 Baner 3,500
Mira Road/Bhayander 3,500 Sector 143 3,050 Hinjewadi 3,000
Virar/Vasai 2,800 Sector 137 3,000 Pimpri 2,900
Navi Mumbai Greater Noida Wakad 2,700
Vashi 7,000 Jaypee Greens 6,000 Ahmedabad
Airoli/Sanpada 5,000 Gautam Budh Nagar 2,300 Ashram Road 3,700
Nerul/Belapur 4,500 Taj Expressway 2,200 SG Highway 2,600
Kharghar 4,000 Noida Extension 2,100 C G Road 2,400
Panvel 2,800 Dadri 2,100 Vejalpur 2,000
Source: PE Analytics, News dailies, Edelweiss research

Edelweiss Securities Limited 7

Real Estate

Key News

ﾕ Three developers shortlisted for redevelopment of Parel, Mumbai plot – Three

developers from among 18 bidders have been shortlisted to undertake redevelopment of
Abhudaya Nagar Federation’s 32-acre plot at Kalachowkie in central Mumbai. Shreepati-
D B Realty (DBRL IN, Not rated), Housing Development and Infrastructure Limited (HDIL
IN, Not Rated), and Damji Shamji Shah Group, have been chosen on the basis of
recommendations made by architect Hafeez Contractor and Parimal Shroff. Abhudaya
Nagar is one of the largest layouts constructed by the Maharashtra Housing and Area
Development Authority in 1957 for the industrial workers. It houses 3,415 tenants.
People from the labour classes reside in the 210 square feet houses in 47 buildings. The
project would entail provision of rehab apartments to tenants of the existing buildings
and sale of free sale component.

0• Uttar Pradesh Government revives Tappal township project - The UP government

has decided to revive the Tappal township project – part of Yamuna Expressway project
being implemented by Jaypee Infratech Limited (JPIN IN; Not Rated), an 83.1%
subsidiary of Jaiprakash Associates (JPA IN; BUY). This decision was taken after the UP
government scrapped the township following protests by farmers, who subsequently
came back asking for the project to be revived.

0• HDIL buys 105 acres in Kanjur Marg, Mumbai for Phase III of MIAL project –
According to media reports, HDIL has bought 105 acres in Kanjurmarg, a central suburb
of Mumbai, for the final leg of its Mumbai International Airport Ltd (MIAL) project for
~INR 7 bn for Phase II and III of the MIAL project.

0• Unitech’s Golibar, Mumbai project encounters legal tangle - Unitech’s (UT IN; INR
91; BUY) SRA project at Santacruz (E), Mumbai has encountered a legal tangle with the
Indian Air Force claiming ownership on part of the land on which the rehab projects are
underway. The state authorities (MHADA) assert that the land in dispute has stood
against their name since 1971. The ownership dispute first came to fore in March 2010
in a local civil court which upheld the ownership of MHADA, against which the IAF unit
has moved an application in the Mumbai High Court.

0• Raymond (Not Rated) to develop its’ factory land at Thane - Raymond has
declared that it reached a settlement with workers, whereby the company will pay INR
2.6 bn to ~1880 workers. This settlement now allows the company to develop the 126-
acre land parcel.

0• Maharashtra Government contemplating increased FSI for MMR – The

Maharashtra state government is planning to give additional FSI to Thane Municipal
Corporation, Kalyan-Dombivli Municipal Corporation, Mira-Bhayander Municipal
Corporation, Vasai Virar Municipal Corporation and Panvel Municipal Council – all part of
the MMR region. Some of the developers likely to get positively impacted as a result of
the same are Lodha Developers due to its’ presence in Kalyan-Dombivali, Indiabulls Real
Estate (IBREL IN, Not rated) due to presence in Panvel and HDIL due to its’ presence in
Vasai – Virar.

0• Draft plan for Greater Noida Extension on anvil - Greater Noida authority is all set
to finalize a draft plan for the city. With this, the total area of Greater Noida will be
94,000 hectares, an increase of 58,000 hectares from the existing 36,000 hectares.

0• DLF may launch Mumbai luxury housing project in 2011 – DLF (DLFU IN; BUY)
may launch its luxury housing project at its NTC Mills, Mumbai land. The launch of this
luxury housing project in Lower Parel has been delayed as DLFU is seeking approvals for
higher FSI in the project.

8 Edelweiss Securities Limited

 Monthly Realty Pulse

0• NTC looks to put Prabhadevi mill land on the block by December - National
Textiles Corporation (NTC) is looking to sell another 8-acre mill land at the prime
location of Prabhadevi on the block as early as December 2010. Around 4 acres of
the total 12 -acre land, part of India United Mills No. 6 situated on Cadel Road, is
likely to be handed over to the Maharashtra government in lieu of additional floor
space index (FSI), and a memorandum of understanding to this effect is likely to be
signed in November 2010.

0• Mumbai airport slum dwellers refuse to relocate to Kurla - The expansion of

the international airport in Sahar, Mumbai has run into trouble with some of the
encroachers on airport land refusing to be relocated. The first phase of the
rehabilitation of slum dwellers, who had set up their hutments on 276 acres of land
of the Chhatrapati Shivaji International Airport (CSIA), has finally kicked off.
However, few tenements declared eligible for rehabilitation by the suburban
collector's office are refusing to shift to Kurla where rehab buildings are being
constructed for them by HDIL (HDIL IN, Not rated). Their refusal, as per sources,
may pose a major problem for HDIL that is supposed to relocate ~24,000 of the
80,000 encroacher families to Kurla.

0• Peninsula Land (PENL IN, Not Rated) to jointly develop plots in

Alibag -
Peninsula Land Ltd, a Mumbai-focused developer, has agreed to jointly develop with
Samira Habitats a 50-acre plot in the coastal town of Alibaug near Mumbai. The project,
75% of which will be residential villas, will be developed by a special purpose vehicle
called Westgate Real Estate.

0• DB Realty’s Goregaon/Prabhadevi projects face environmental issues – As

per media reports, DB Realty’s police housing project at Goregaon, Mumbai
consisting of nine 25-storey buildings for 4,851 families of police personnel with DB
Realty getting five 26 -storey buildings for commercial sale, has run into trouble
with The State Expert Appraisal Committee (SEAC), an advisory body that
scrutinises all construction and infrastructure projects in the state, rejected the
project saying the developer failed to produce essential documents. DB Realty has
appealed against the panel’s orders to the higher authority, the State-level
Environment Impact Assessment Authority (SEIAA), for a final decision. Another DB
Realty project, Orchid Crown at Prabhadevi, was also rejected after the developer
refused to revise the proposal according to the committee’s recommendation, which
would have drastically reduced the total construction area.

0• Trump Organization set to close deal for South Mumbai tower - New York-
based the Trump Organization is tying up with Mumbai’s Rohan Lifescapes Pvt. Ltd
for luxury homes on Hughes Road. As per media reports, the Trump Tower in
Mumbai, encompassing 250,000 sq. ft, will have 40-45 luxury apartments, one on
each floor. The tower will have amenities such as a luxury spa, a gym and a mini
theatre.
Edelweiss Securities Limited 9
 C
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11 12 13 Ch
90 95 100 105 0 115 120 5 0 art
Mar-07
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me
nt
Sep-07
Monthly Realty Pulse

Aff
ord Chart 13:
abil Affordability
(House
ity price/income)
5.4
indi
cat 5.0
ors 4.7
Chart
12:
HDFC/
ICICI
Bank
floatin
g
home
loan
rates
16
.5

14
.0

11
.5

(%
)
(x
)
9.0 4.3

6.5 4.0

4.0 3.6

08 09
-

---

Jul p

HDFC Floating J
(%) u
n

Property
Edelweiss Securities Limited
11
 Real Estate

Commercial: Leasing activity and rentals steady

4: Mumbai office space absorption-supply Chart 15: NCR office space absorption-supply
12.5 21.0 16.0

10.0 17.5 12.8

( 14.0
m (
sf %
7.5 14.0 ) 9.6 10.5 )
(
m 7.0
sf (%
) ) 3.5
10.5 6.4
5.0
0.0
7.0

2.5 3.5 3.2

0.0 0.0
C C C
Y Y Y
0 0 0
0.0 3 4 5

CY 0 CY 0 CY 0 CY 0
3 4 C Y 05 C Y 06 7 8 C Y0 9

Q1 Q2
CY CY
10 10 Q3CY10

Supply Absorption Vacancy Supply Absorption Vacancy

Source: Cushman Wakefield, Edelweiss
research

Chart 16: Bengaluru office space absorption-supply Chart

17.5 17.5 17:
Chenn
14.0 14.0 ai
( office
m space
sf absor
) 10.5 10.5 ption-
suppl
(%) y
7.0 7.0

3.5 3.5 10.0

(
0.0 0.0
m
Q Q sf
1 2 ) 7.5
C C C C C
(%)
Y Y Y C Y Y 5.0
CY 0 0 0 CY Y0 1 1
03
CY
04 5 6 7 08 9 0 0 Q3CY10
2.5
Vacanc 0.0
Supply Absorption y
Supply Absorption Vacancy
Source: Cushman Wakefield, Edelweiss
research
Chart 18: Hyderabad office space absorption-supply Chart
7.0 35.0 19:
Kolkat
5.6 28.0 a
( office
m space
sf absor
) 4.2 21.0 ption-
suppl
(%) y
2.8 14.0

1.4 7.0 3.6

(
0.0 0.0 m
sf
Q Q
) 2.7
1 2
C C C C C C C 1.8 (%)
Y Y Y Y Y Y Y
C 0 0 0 0 0 CY 1 1
Y
0
3 4 5 6 7 8 09 0 0 Q3CY10
0.9

Vacanc 0.0
Supply Absorption y

Supply Absorption Vaca

Source: Cushman Wakefield, Edelweiss
research
12 Edelweiss Securities Limited
 Chart 24: Hyderabad office rentals
Chart 20: Mumbai office rentals 75
600
60
480 (I
(I N
N R/
R sf
/ /
sf m
/ o
m nt
o h) 45
n
t 30
h
) 360 15
240
0
120 0
05 05 06 06 07 07 08 08 9 09 10 10
0 -- ---- -- --- -

0 0 0 0 0 0 0 0 0 1 Ma Se Ma Se M Se M Se
5 5 6 6 7 7 8 8 9 09 0 10 r p r p ar p ar p M a rSe p M a rS e p

CB Suburban
- - - --- -- ----
D Off CBD 1
M S S M S S M
Suburban 2 Peripheral 1
a e M e a e M e a Se M Se
r p ar p r p ar p r p ar p
Nariman Point Worli
Lower Bandra
Parel Kurla
Andher
i Malad
Thane Belapur
Powai Road
Vashi

Chart 22: Bengaluru office rentals

100

80
(I
N
R/
sf
/
m
o
nt
h) 60

40

20
0

0 0 0 0 0 0 0 1
5 05 06 6 7 7 8 8 9 09 0 10 - ---- -- ---
--

S S S M
M Se M e M e M e a Se M Se
ar p ar p ar p ar p r p ar p
CBD Off CBD
Suburban Peripheral 1 - ITPL
Peripheral Peripheral
2 3
Monthly Realty
Pulse 50

25
Chart 21: NCR office rentals

480 0
0 0 0 0 0 0
360 5 5 6 06 07 7 8 08 9 09 10 10
(I
-- -- ---- -- --

S S M S
N M e M S M e a e M Se Ma Se
R ar p ar ep ar p r p ar p r p
/ CBD -
sf Corporate Off CBD - Corporate
/ Sub Guindy Sub Ambattur
m
o Suburban 3 Peripheral
Source: Cushman Wakefield, Edelweiss
n research
t
h
Chart 25: Kolkata office rentals
) 240
160
120 (I
N
R
0 /s
0 0 0 0 0 0 0 0 f/
5 5 6 6 07 7 8 8 9 09 10 10 m
o
n
-- --- --- -- --

M S S S M S
t
a e M e M e a e M S Ma Se
h
r p ar p ar p r p ar ep r p ) 120
CBD Prime
CBD Others
South Delhi Prime 80
South Delhi Micro-markets
Gurgaon Prime
Source: Cushman Wakefield, Edelweiss 40
research

Chart 23: Chennai office rentals 0

100 0 0
(I 05 05 06 06 07 07 8 08 9 09 10 10
-- -- ---- -- --

N Ma Se Ma Se M Se M Se M Se Ma Se
R r p r p ar p ar p ar p r p
/s Dalhousie Park Street Salt Lake
f/
m Park Circus Rash Behari Rajarhat
o Source: Cushman Wakefield, Edelweiss
nt research
h
Edelweiss Securities Limited
) 75
13
Real Estate

Chart 26: Pan-India office demand-supply absorption scenario

65.0 30.0

52.0 24.0
(
m
sf
) 39.0 18.0
(
%
)
26.0 12.0

13.0 6.0

0.0 0.0

CY0
CY05 CY06 CY07 8 CY09 CY10E CY11E CY12E
Completions Absorptions Vacancy
Source: JLL state of the nation
Q2CY10
14 Edelweiss Securities Limited
 C
1 (INR/sf/month)
5 h
3 a
16 24 2 r
0 80 0 0 0 t Dec-05 F
3 Mar-06 36 48 Mar-05
Dec-05 1 120 240 0 0 o
Jun-06 Sep-05
Mar-06 : 2
Sep-06 rt
Jun-06 H 9
Dec -06 Mar-06
R Sep-06 y R 0 : / 1
aj Mar -07
Dec-06 d o Sep-06 ,
M Jun-07
Mar-07 e a B F 6
G
r
Sep-07 Mar -07 1,2 0 Ret
Jun-07 d e
Sep-07 a Dec-07 o 00 0 ail
n Sep -07
b Mar-08 27
Dec-07 g
C om

u
m erc

0 400 800
ial

a S Jun-08 C :
Mar-08 a Mar-08
d tr Sep-08 a n Mu
Jun-08 l u
r e Dec-08 m
Sep-08 u s Sep-08
e e e t ba
Dec-08 Mar-09 r
t w Mar-09 i
Mar-09 t Jun-09 u a a
a y ren
Jun-09 Sep-09 r
il Dec-09 e A i Sep-09 tals
Sep-09 n
r
Dec-09
e
Mar-10 t
d n Mar-10 R
e
Mar-10 Jun-10 a h
n il Sep-10
Sep-10
n
Jun-10 t B e
Sep-10 r ri
a
l
ri e t
S s g
n
t a
p a a M
u
L L
i ls
l o n K bot
d l k
s u w e to
e i
e
n n m mi
R d r g p ng
P s
Ju o a ret
C
b il a
r o ail
ee e re
r
H d l nt
n
ill I R als
o e
s n
d
a
d
r
b
ir o
a
n
tt
a o
g m
a i
r
n
g
out
 Mar-07
C
u
(INR/sf/month) s
h
m
a Cush Cush
n t man man
Mar-08
re
nt
als Jun-07 Jun-07
re
nt
als
Ede
lwei
ss Jun-08 Sep-07

Dec-07
Dec-
Sep-08 07
W
a
k
e
fi
el
d Wakef Wake
, ield, Mar-08 field,
Dec-06
Dec-08
Sec
Par uriti
k es Jun-08 Jun-08
Mar-07 Mar-09 Sep-08
Dec-08
C
R
o
aj n
a
E n
r
K N S a
h l
h u
a So
ut
g S A a
oi o K g
t Jun-07
i al d ut a r h Dec-
h
d
y d
S
n t Jun-09 ar ar Mar-09 a h o l t 08
o
ur Sep-09
ce Jun-09
: Sep-07
L im ite
d
E Cam a
c La Dec-09 N Sep-09
E d e lw e is s
E
E d e lw e is s
B Jun-09
d
el k a x a
w
e w t g
ei
a
Ko
ss
z e h
lk a n
si
S tre e ta Dec-07
 R
o
a
M
d Mar-10
r o
e
s nt
e
a hl
r
c y
h S tr e e Jun-10
R
t Sep -10
e
al
ty
P
ul
s
e
Real Estate

Retail rentals stable in Q2CY10 across India except NCR

Chart 33: Average of Q-o-Q % change in rental values

NCR

Mumbai

Bangalore

Chennai

Pune

Hyderabad

Kolkata

India
(30.0) (25.0) (20.0) (15.0) (10.0) (5.0)

0.0
(%)
Q2CY10 Q1CY10 Q4CY09 Q3CY09 Q2CY09 Q1CY09
Source: JLL State of the Nation Q2CY10

Upcoming supply to keep rentals stable in CY10-12E

Chart 34: Pan-India retail supply-absorption

20.0 30.0

24.0
16.0
(
m 18.0
sf
(%
) 12.0 )
12.0
8.0

6.0

4.0
0.0

0.0
CY0
CY05 CY06 CY07 8 CY09 CY10E CY11E CY12E

Completions Absorptions Vacancy

Source: JLL State of the Nation
Q2CY10
16 Edelweiss Securities Limited
 Monthly Realty Pulse

Edelweiss Securities Limited, 14th Floor, Express Towers, Nariman Point, Mumbai – 400 021,
Board: (91-22) 2286 4400, Email: research@edelcap.com

Vikas Khemani Head Institutional Equities vikas.khemani@edelcap.com +91 22 2286 4206

Nischal Maheshwari Head Research nischal.maheshwari@edelcap.com +91 22 6623 3411

Coverage group(s) of stocks by primary analyst(s): Real Estate

Anant Raj Industries, Brigade Enterprises, DLF, Mahindra Lifespace Developers, Orbit Corporation, Sobha Developers, Unitech

EW Indices Recent Research

1,400 Date Company Title Price (INR) Recos

15-Nov- Bu
1,200 10 Unitech Monsoon and labour 81 y
shortage slow execution;

1,000 Result Update

12-Nov- Bu
10 Anant Raj Residential sales boost 137 y

800 Industries revenues; Result Update

11-Nov- Bu
10 DLF Margins disappoint; leasing 346 y

600 surprises positively;

Result Update
13-Nov-09 13-May-10 13-Nov-10 09-Nov-10 Brigade Visible improvement across 139 Buy
EW Real estate Index Nifty Enterprises segments; Result Update

Distribution of Ratings / Market Cap

Edelweiss Research Coverage Universe Rating Interpretation

Buy Hold Reduce Total Rating Expected to

Rating Distribution* 116 45 12 176 Buy appreciate more than 15% over a 12-month period

* 3 stocks under review Hold appreciate up to 15% over a 12-month period

> 50bn Between 10bn and 50 bn < 10bn Reduce depreciate more than 5% over a 12-month period

Market Cap
(INR) 110 53 13

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