H1 2016, a recap

- A recovery predictedINDIA

REAL ESTATEJULY – DECEMBER 2016

NCR

NCR REAL ESTATE

The story so far

NCR RESIDENTIAL MARKET ON A CONTINUOUS DOWNWARD SLIDE

New launches dry further in 2016

2010 2011 2012 2013 2014 2015 2016 -

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

172

,571

110

,751

100

,259

99,

407

79,

577

63,

458

26,

734

Chart Title

No

of u

nits

85% drop from the peak

58% drop from 2015

Yearly trend of new launches

Buyers in a wait and watch mode; Sales dip further

Yearly trend of sales

2010 2011 2012 2013 2014 2015 2016 -

20,000

40,000

60,000

80,000

100,000

120,000

140,000

117

,559

93,

986

79,

178

74,

966

48,

630

48,

800

40,

005

Chart Title

No

of u

nits

66% drop from the peak

18% drop from 2015

Prices in NCR have corrected to 2013 levels

7% drop in prices YoY in H2 2016Half-yearly trend of weighted average price

H1

2010

H2

2010

H1

2011

H2

2011

H1

2012

H2

2012

H1

2013

H2

2013

H1

2014

H2

2014

H1

2015

H2

2015

H1

2016

H2

2016

2,500

3,000

3,500

4,000

4,500

5,000

2,760 2,780 2,999

3,370

3,720

3,970 4,195

4,330 4,400 4,444 4,511 4,578

4,346 4,250

Wei

ghte

d av

erag

e pr

ice

INR

Prices have come down to 2013 levels

The cookie crumbles further - H2 pulls down sales & launches in 2016

Dip in launches and sales by 73% and 29% YoY respectively in H2 2016

Half-yearly trend of sales, launches and weighted price movements

H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 -

10,000

20,000

30,000

40,000

50,000

60,000

70,000

42,

542

57,

717

62,

418

36,

989

34,

577

45,

000

29,

458

34,

000

17,

462

9,2

73

34,

199

44,

979

45,

276

29,

690

28,

000

20,

630

25,

000

23,

800

23,

092

16,

913

Launches Sales

No.

of u

nits

-73%

-29%

All micro-markets in the same boatMicro-market share of new launches

Delhi Faridabad Ghaziabad Greater Noida Gurugram Noida -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

208

2,0

06

6,0

80

46,

392

19,

776

18,

149

- 1

,353

9,2

04

5,0

51

14,

051

13,

416

- 1

,983

11,

122

25,

565

13,

093

5,9

54

13 613

6,0

57

19,

847

6,4

61

3,9

99

95

344

7,7

90

18,

401

12,

002

6,3

68

71

260

5,8

86

13,

903

9,0

68

4,8

11

649

- 1,1

39

2,5

44

1,1

59

3,7

82

H2 2010 H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 H2 2016

No.

of u

nits

Buyers still uncertain across all micro-marketsMicro-market share of sales

Delhi Faridabad Ghaziabad Greater Noida Gurugram Noida -

5,000

10,000

15,000

20,000

25,000

30,000

158

2,1

75 6

,152

24,

618

11,

336

19,

658

109

1,4

49

7,7

19

6,0

47

11,

755

13,

353

63 1

,643

8,3

75

13,

733

11,

485

9,6

81

67 703

6,1

70

13,

840

5,1

26

3,7

83

59 382

4,1

79

8,9

86

3,9

44

3,0

80

65 463

4,8

82

10,

518

4,4

51

3,4

21

50

298

3,8

88 6,7

70

2,8

97

3,0

10

H2 2010 H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 H2 2016

No.

of u

nits

QTS stagnated since 2015 - 4.2 years to offload the unsold inventory

NCR market health – Quarters to sell and unsold inventory

Jun-1

4

Aug-14

Oct-14

Dec-14

Feb-15

Apr-15

Jun-1

5

Aug-15

Oct-15

Dec-15

Feb-16

Apr-16

Jun-1

6

Aug-16

Oct-16

Dec-16

0

2

4

6

8

10

12

14

16

18

20

Unsold inventory stands at 192,758 units in 2016

Impact ofDemonetisation

NCR hit hard – Sales volume dropped by 53% YoY in Q4 2016;

new launches fell by a massive 73%

Quarterly trend of new launches and sales

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 2,000

6,000

10,000

14,000

18,000

22,000

26,000

30,000

18,771

15,806

27,000

18,000 18,070

11,388

20,400

13,600 10,477

6,985 5,564

3,709

15,680

12,320 10,417 10,213

15,000

10,000 9,520

14,280

9,237

13,855

10,148

6,765

Launches Sales

No

of u

nits

Demonetisation impact in Q4

Average # units sold in Q4 2014 & Q4 2015 12,247

# Units sold in Q4 2016 6,765

45% fall in sales

Notional REVENUE LOSS to real estate industry

INR 3,700 cr

State government notional LOSS ON STAMP DUTY

INR 260 cr

Key takeaways

Endemic issuesInventory pileup l Infrastructure delays l Delayed projects completions

Developers rush to complete projects before RERA kicks in

Demonetization brings residential market to a standstill

Uncertainty likely to continue for the next quarter

Reduction in home loan interest rates, RERA, GST and ‘possible’ tax benefits in the upcoming budget likely to bring in a ‘feel good factor’

among buyers

Office market

PROJECT DELAYS HAMPER NEW COMPLETIONS

Delay in project completions dry up supply in 2016

Yearly trend of new completions and transactions

2010 2011 2012 2013 2014 2015 20160.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

9.9

6.3

9.6

7.08.1

11.5

4.6

6.9 7.26.4 6.6

7.6 7.4 7.3

New completions Transactions

mn

sq ft

New completions are at an all time low in H2 2016, demand holds steady

Half yearly trend of new completions and transactions

H2 2010 H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 H2 20160.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

5.56.3 6.0

3.54.1

6.0

1.8

3.5 3.3 3.0 3.24.1

3.7 3.8

New completions Transactions

mn

sq ft

70% YoY drop

Pressure on rentals; Vacancy at an all time low since 2012

Weighted average price rentals

H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 201650

55

60

65

70

75

17.0%

18.0%

19.0%

20.0%

21.0%

22.0%

53 5352

53

5658

62

64

70

73

20.3%

21.9%

21.3%20.9%

20.6%

20.0%

20.7%

21.5%

20.6%

18.9%

Price Vacancy (RHS)

INR

/sq

ft / m

onth

Vaca

ncy

(RH

S)

Gurugram holds the largest share in H2 2016 transactions

Market share of transactions

CBD - Delhi Faridabad Gurgaon Noida SBD - Delhi Greater Noida0%

10%

20%

30%

40%

50%

60%

70%

2% 1%

56%

23%

10% 8%1% 0%

63%

23%

11%

0%

H2 2015 H2 2016

% s

hare

3.6 mn sq ft 3.8 mn sq ft

IT/ITES which experienced a setback in H1 2016, regains its position

Share of sectoral split of transactions

BFSI * IT/ITeS Manufacturing Other services sector

5%

30%

22%

43%

13%17%

29%

41%

8%

28% 28%

36%

H2 2015 H1 2016 H2 2016

74% increase in transacted space

3.7 mn sq ft 3.5 mn sq ft 3.8 mn sq ft

Key takeaways

Transaction holds steady in H2 2016

Vacancy at all time low with key locations such as DLF Cybercity and Golf Course Road

in single digit

Upward pressure on rentals

Download the complete report from the link below:bit.ly/IREH216-SS