HYDERABADRESIDENTIAL & OFFICEJULY TO DECEMBER 2017

KnightFrank.co.in

2

RESIDENTIAL RECAP H1 2017

• New launches hit an all-time low of

just over 2,500 units in H1 2017

Ambiguity on RERA

Sales remained steady

Lack of proper

implementation of RERA

pulls new launches to a

grinding halt

3

14,828

19,919

22,726

18,643

13,050

11,197 11,600

3,511

2010 2011 2012 2013 2014 2015 2016 2017

Launches down

70% YoY

Launches

Launches all time low

4

7,899

5,1515,457

5,740 5,7005,900

2,571

940

H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017

84% YoY

Lack of systems and

processes pulls down new

launches to a historic low in

2nd half of 2017

Half-yearly launches

In a first, city witnesses

sub 1,000 unit launches

5

15,021

16,902

19,05018,428

15,111 14,90315,500

14,243

2010 2011 2012 2013 2014 2015 2016 2017

8% YoY

Sales

Sales tad below

2016 levels

Lack of clarity in RERA and

GST

Inadequate ready-to-move-in

homes

EAST

23 units

-54% YoY426 units

-23% YoYCENTRAL

23 units

-54% YoY416 units

-41% YoY

NORTH

23 units

-54% YoY818 units

-18% YoY

WEST

23 units

-54% YoY4,403 units

-11% YoY

SOUTH

23 units

-54% YoY279 units

-54% YoY

The biggest market, West

Hyderabad also faces stress

Sales drop across all micro-markets in H2

Lack of launches and shortage

of ready to move in houses

push up prices by 3%

7

2,960

3,316

3,5023,610

3,7103,821

2,000

2,200

2,400

2,600

2,800

3,000

3,200

3,400

3,600

3,800

4,000

Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017

3%YoY

Amidst price

correction in most

cities, Hyderabad

records an

appreciation

JUBILEE HILLS

INR 10,980-11,034/sq ft3%

BANJARA HILLS

INR 10,100-10,464/sq ft3%

NACHARAM

INR 3,467-3,535/sq ft4%

MANIKONDA

INR 4,390-4,484/sq ft7%

BANDLAGUDA

INR 2,700-2,752/sq ft8%

SAINIKPURI

INR 2,700-2,787/sq ft2%

KOKAPET

INR 4,234-4,314/sq ft4%

All micro markets witnessed a positive growth in prices

70

80

90

100

110

120

130

140

CPI HYDERABAD

Residential prices up by by

3% compared to an inflation

growth of 5.5% in 2017

Price growth evident,

albeit under retail

inflation

9

CPI

HYDERABAD

10

Hyderabad an affordable market,

hovers around the

Knight Frank Affordability

Benchmark* of

4.5(*house price to income ratio)

2017

52010

5.7

Inventory levels and

QTS lowest since 2014

Age of inventory a major

concern at 4.5 years

Unsold inventory

declines 38% YoY on

the back of negligible

launches

11

37,8

61

35,1

83

33,5

17

31,4

77

29,4

77

28,0

88

22,6

58

17,3

56

8.2 8.4 8.7

8.4

7.7

7.3

5.9

5.0

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

- 1

0,0

00

20,0

00

30,0

00

40,0

00

H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017

QT

S

Un

so

ld In

ven

tory

Unsold inventory QTS

EAST

CENTRAL

NORTH

WEST

SOUTH

Unsold units

2.993

QTS 7.2Age 20.7

Unsold units

909

QTS 3.6Age 23.1

Unsold units

1,037

QTS 3.6Age 14.5

Unsold units

2,286

QTS 8.9Age 21

Unsold units

10,131

QTS 4.1Age 16.1

Drastic reduction in launches and

steady sales has further pushed

down the QTS from 8 quarters in

H2 2016 to 5 quarters in H2 2017

Affordable housing lifts peripheral markets

Age and QTS in quarters

KEY FINDINGS

13

01 03

02 04

Launches down by 84% YoY

in H2 2017

Amidst price correction in most

cities, Hyderabad records an

appreciation

Unsold inventory down

by 38% YoY

Age of inventory a major concern at 4.5 years

Sales in H2 2017

down by 13% YoY

• Lack of clarity in RERA and GST

• Inadequate ready-to-move-in homes

Lack of proper implementation of RERA pulls new launches to a grinding halt

Lack of launches push up house price by 3%

14

H1 2017 recorded highest number of

deals

Vacancy was at new low, low supply

failed to keep pace with demand

IT/ITeS took a hit in share of

transaction

OFFICERECAP H1 2017

15

3.4

5.0

3.9

6.0

3.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2013 2014 2015 2016 2017

New completions

New completions were

down 46% in 2017

Robust supply pipeline, but

dearth of new completions in

2017

Mn. S

qft.

16

2.7

1.0

2.0

2.4 2.4

1.2

H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 H2 2017

Half-yearly new completions

Similar trend evident in

H2 2017

Mn. S

qft.

17

3.74

4.70 4.57

5.925.67

2013 2014 2015 2016 2017

4% YoY

Transactions

Lack of quality supply

limits transaction

volume in an otherwise

robust market

Mn. S

qft.

18

1.11.2

2.8

3.13.2

3.3

H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 H2 2017

Half-yearly transactions

Highest transaction in

H2 recorded in the last

five years

Mn. S

qft.

19

8.78.4

6.55.9

5.1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2013 2014 2015 2016 2017

Vacancy

Want of quality office

space pushed vacancy

to abysmally low levels

perc

en

tag

e

Average rentals grew by

around 9% YoY

12 month change

PBD WEST

INR 45-55/sq ft/month

10%

SBD

INR 55-65/sq ft/month

8%

CBD & Off CBD

INR 40-50/sq ft/month

4%

PBD EAST

INR 30-35/sq ft/month

9%

21

Industry H2 2017 H2 2016

BANKING, FINANCIAL

SERVICES &

INSURANCE1% 7%

IT/ITES 75% 87%

MANUFACTURING 6% 1%

OTHER SERVICES 17% 5%

IT/ITeS still the market

leader; heightened

traction seen by other

services sector

KEY FINDINGS

01 03

02 04

22

New supply at an all time

lowVacancy at an all time

low

IT/ ITeS maintains its

leadership in the share of

transactions

Rentals increase 9% YoY.

All micro markets witness

positive growth in rentals

HYDERABADRESIDENTIAL & OFFICE

Amidst price correction in most cities, Hyderabad

records an appreciation in the residential segment

Hyderabad office market among better performing

IT / ITeS driven market

KnightFrank.co.inknightfrank.india@in.knightfrank.com