city report mumbai office market - BNP PARIBAS - Investment ...

12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Gross Domestic Product (GDP)
9.70%
9.30%
9.30% 9.20%
8.80% 8.80% 8.00%
7.90%
7.90%
7.60%
6.10%
5.30% 5.80%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009
Source: Confederation of Indian Industries
MACROECONOMIC CONTEXT
Rising inflation. Interest rates hike imminent
With the rising inflation, there is a growing concern among the government
authorities to arrest the escalating food prices across all segments. It is
expected that by January 2010, the Reserve Bank of India will raise the Cash
Reserve Ratio by 50 – 100 basis point. The industry leaders and experts are
lobbying with the government to continue with the fiscal & monetary
reforms. At the same time, the Government is expecting GDP rate to touch 8%
which probably will be the highest growth rate in the world. The FDI inflows
are at 50% higher than corresponding quarter of 2009 thus further boosting
industry confidence. The real estate industry is expecting a lot of fiscal
benefits and clarity especially on indirect taxes in the ensuing budget which
will be tabled in the last week of February 2010.
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
25,000
20,000
15,000
Jan-09
Feb-09
Wholesale Price Index (WPI)
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Source: Confederation of Indian Industries
Sept-09
Sensex & Nifty
Oct-09
Nov-09
Dec-09
Real Estate
The developer community expects a revival for commercial real estate in
2010 However, a lot is dependent on the global occupier confidence
especially in the IT / ITES sector. Most of the development companies
showed healthy growth in sales. This is due to better consumer sentiment
especially on residential real estate market. It is expected that some of the
development companies will try to sell land in Q1 of 2010 (Jan - March) so
as to show better performance to its shareholders for the Indian financial
year (April 2009 - March 2010).
Major Real Estate
Companies in
India
Sales (In INR / In Million)
Q4 2009 Q3 2009 Q on Q
Change %
Profits (In INR / In Million)
Q4 2009 Q3 2009 Q on Q
Change %
DLF Limited 202,577 175,09.4 16% 46,789 43,974 6%
Unitech 77,446 50,94.9 52% 13,953 17,601 -21%
India Bulls 33,013 29,65.9 11% 6,400 7,113 -10%
Sobha Developers 30,700 22,360 37% 4,080 2,750 48%
Peninsula Land 25,176 16,87.2 49% 8,888 7,287 22%
Parsvnath
Developers
30,364 16,847 80% 2,491 6,143 -59%
10,000
5,000
0
11-12-07
12-12-07
01-12-08
02-12-08
03-12-08
04-12-08
05-12-08
06-12-08
07-12-08
08-12-08
09-12-08
10-12-08
11-12-08
12-12-08
01-12-09
02-12-09
03-12-09
04-12-09
05-12-09
06-12-09
07-12-09
08-12-09
09-12-09
10-12-09
11-12-09
12-12-09
Sensex
Source: Confederation of Indian Industries
Nifty
Pheonix 3,018 2,639 14% 1,019 1,754 -42%
Omaxe Limited 28,020 22,392 25% 2,846 2,251 26%
Mahindra
Lifespaces
10,891 6,352 71% 2,793 1,734 61%
Ananthraj 8,262 8,713 -5% 6,704 7,12.7 -6%
Ackruti City 21,928 7,829 180% 7,777 2,979 161%
Ansal Properties 27,104 17,684 53% 2,644 3,160 -16%
CITY REPORT
MUMBAI OFFICE MARKET - Q4 2009
I4I