Market_Mid_year_market_report_2009_28

MID-YEAR MARKET REVIEW KOLKATA, 2009

CORPORATE SERVICES

RETAIL

RESIDENTIAL

LAND

HOSPITALITY

WAREHOUSE

INVESTMENT

2009 Mid Year Market Review

DEAR CLIENTS Welcome to our 2009 Mid-year Kolkata market overview. We are pleased to share our in depth market knowledge with you in every sector of real estate.

After the two quarters of plunging market, Kolkata real estate market started recovering from the beginning of second quarter of the current year.

And this is mainly due to the affordable housing segment.

The scenario in the premium housing segment and the commercial real estate segment are showing signs of improvement.

The real estate sector's recovery is closely associated with the economic recovery. The turn around is likely to be seen at the end of the current year.

Pawan Agarwal Director

2009 Mid Year Market Review

MID YEAR REVIEW OF values, trends & opportunities IN THE KOLKATA REAL ESTATE MARKET

CONTENTS Office Retail Residential Land Hospitality Warehouse Investment

CORPORATE SERVICES

2009 Mid Year Market Review KOLKATA OFFICE MARKET Downsizing and stalling of expansion plans by the major corporate houses due to the global financial turmoil and the rising local political unrest towards land acquisition has all led to a negative growth in the Kolkata office market over the last two quarters.

Falling demand in the global IT and BPO business due to Global economic downturn has been another important factor that also has impacted the IT and ITeS office market growth in the Salt Lake, Sector-V and Rajarhat area in the last two quarters.

OFFICE VACANCY RATES 60% 50% 40% 30% 20% 10% 0%

CBD

Topsia Road

Sector-V

Grade A

2.5%

23%

15%

47%

Grade B

2.5%

2.5%

30%

56%

Rajarhat

Property downturn in the Kolkata office market which started at the end of 3rd quarter of 2008 is now on the recovery path.

Over all vacancy rates across all the office locations in Grade-A and Grade-B office buildings in the CBD area estimated at approximately 2.5% at the end of 2nd quarter, 0.5% up form the year end.

The Kolkata office market has seen some recovery due to the growth in certain sectors like telecom, engineering, BPO, steel etc. from the 2nd quarter of 2009.

In Topsia Grade-A office vacancy has increased from end 2008 from 5% to 23%. This is due to the completion of two new buildings in this area.

Corporate houses are now preferring secondary business district areas to relocate or expand their offices such as Salt Lake Sector-V, Rajarhat, Topsia and Kasba. The current rental of Grade-A office building in Rajarhat is just one third compared to that of CBD area.

In Salt Lake Sector-V, Grade-A office vacancy at around 15%, while Grade-B office vacancy at about 30% and in Rajarhat Grade-A office vacancy at around 48% at midyear end.

Salt Lake sector-V has seen the maximum number of office transactions in Kolkata over the last six months.

Although majority of the developments are focusing on IT & ITeS but this sector has seen very less transactions during this period.

OFFICE LEASE RATES TREND Rs. / sq.ft. / month

GRADE-A, OFFICE

160 140 120 100 80 60

SIGNIFICANT TRANSACTIONS

40 20

Company

Building

Location

Sq.ft.

Tata Teleservices Idea Cellular

P.S.Srijan Tech Park P.S.Srijan Tech Park

Sector-V 1,50,000 Sector-V 60,000

Sistema Shyam Tele Services

P.S.Srijan Tech Park

Sector-V

22,000

Mcnally Bharat Metal Junction IIPM Sparsh BPO Cosent Engineering BNA Steel

Ecospace Rajarhat Godrej Waterside Sector-V Saltee Group Building Sector-V Assyst Park Sector-V Infinity Benchmark Sector-V Vishwakarma-II Topsia

1,25,000 62,000 50,000 23,000 29,000 15,000

0

Q1

Q2

Q3

Q4

Q1

Q2

Park Street

Q3

Q4

Q1

AJC Bose Road

Camac Street

Q2 2009

2008

2007

Sector-V

Topsia

Rajarhat

GRADE-B, OFFICE

Rs. / sq.ft. / month 120 100 80

SUPPLY IN THE LAST SIX MONTHS CBD area has seen no major office development in the last six months while SBD areas have seen some new offices being operational during the last six months such as Vishwakarma-II, Paroma in Topsia, South City Pinnacle, Infinity Bench Mark, P.S.Srijan Tech Park in Sector-V and Eco Space at Rajarhat.

60 40 20

Q1

0 Park Street

Q2

Q3 2007

Camac Street

Q4

Q1

Q2

Q3

Q4

Q1

2008 A.J.C Bose Road

Dalhousie Square

Topsia

Q2 2009 Sector-V

Kolkata office market has witnessed a significant fall in the lease rates across all the office locations over the last six months.

Rentals have fallen over 12% in the CBD area during the last six months.

Rental in good quality office in the Park Street area decreased by 17% from Rs.120/sq.ft./month to Rs. 100/sq.ft./month.

Source: NAI NK Realtors Research

2009 Mid Year Market Review

Average lease rates of Grade-B office buildings in the Dalhousie area has increased by 17% over the last six months which was an exception.

OFFICE CAPITAL VALUE TREND GRADE-A, OFFICE

Rs. / sq.ft.

16000 14000

Godrej Waterside coming up at Salt Lake Sector-V

12000 10000 8000

DEVELOPMENTS IN PIPELINE

6000 4000 2000

Q1

Q2

Q3

Q4

Q1

Q3

Q2

Q4

Q1

Developer

Q2

0

2007 Park Street

2008

Camac Street

A.J.C. Bose Road

2009

Topsia

Rs. / sq.ft.

Salt Lake

Rajarhat

GRADE-B, OFFICE

Sq.ft. (App)

Location

Pataka Industries

99,000

Park Street

Archana Properties Pvt.Ltd.

45,000

Dalhousie

Arihant Group

33,000

Topsia Rd.

Infinity

2,60,000

12000

S. M. Group

1,30,000

Sector-V Sector-V

10000

Bharti

4,22,000

Rajarhat

8000

Unitech

1,50,000

Kasba Connector

6000

Pansari Group

2,00,000

E.M. Bypass

4000

Ideal Group

6,50,000

E.M. Bypass

2000

Q1 0

Q2

Q3

Q4

Q1

2007 Park Street

Camac Street

Q2

Q3

Q4

Q1

2008 A.J.C. Bose Road

Dalhousie Square

Q2 2009

Topsia

Salt Lake

Global economic downturn which has affected the IT sectors growth has forced few developers to drop their plan of setting up IT SEZ project in the state.

Shyam Steel one of the investors in the state’s steel sector is coming up with an IT SEZ on 30 acres of land near Barasat.

FORECAST Rentals will likely to remain stagnant to the current level for the next six months across the Kolkata office market.

Transactions will likely to happen in same rate as supplies will exceed the demand in the coming months especially in the SBD areas.

Supplies of large plug & play building will exceed in the coming months in Sector-V and Rajarhat areas.

In both Salt Lake Sector-V and Rajarhat areas vacancy rates to rise and rental rates to drop. However, vacancy in the Sectr-V will be less compare to Rajarhat.

P.S. Srijan Tech Park at Salt Lake, Sector-V

Relocation of old business houses from CBD to SBD areas will be more in the coming months.

Source: NAI NK Realtors Research

CORPORATE SERVICES

Average lease rates of Grade-A and Grade-B office buildings in Topsia decreased by 12%, in Salt Lake Sector-V decreased by 12.5% and in Rajarhat decreased by 7% since last year.

RETAIL

2009 Mid Year Market Review KOLKATA RETAIL MARKET Plunging sales due to global recession resulted in rent negotiation, revenue sharing, store closure and this has been the Kolkata retail market trend for the last four quarters.

Cautious consumer spending and high operational cost have compelled the retailers to shut down their unviable store formats across the Kolkata market.

Within ten months of opening, “Odyssey” the renowned national bookstore chain shut down their 30,000 sq.ft. store on Prince Anwar Shah Road. “My Dollar Store”, US based value retail format shut down its stores located in New market, South City Mall, Mani Square mall and Orbit city in Kolkata. South City Mall, the largest operational mall in Kolkata, has also seen brands like 'Jealous, Scullers' Next, etc. coming out from their mall because of non-profitability.

Kolkata has also witnessed the closures of value retail stores such as Reliance Fresh, More, Spencer's, Subhiksha and Bigbazar in some unviable locations over the last six months. Losses from value formats hit the bottom lines of retailers and their expansion plans.

This trend was even more evident in multiplex business.

Back outs from signed deals was becoming routine activity for most of the renowned multiplex operators.

Pre-recession conceived mall projects and the malls in the middle of their construction are being reinvented to include mixed use formats in the form of management schools, budget hotels, small offices, call centres etc.

But retail sales have seen some improvement across the various formats from the beginning of 2nd quarter of current year. The things are getting better day by day.

Factors like assurance of a stable government, low inflation, better stability in the job market, movement in the recruitment sector, lucrative offers from the retailers to the customer etc. have played vital role in the process of revival.

Official statements regarding growth in the sales and expansion plans from the renowned national giant retail players like Future Group, RPG Retail, Shopper's Stop etc. for the Kolkata market has added to the confidence of the industry.

Food and beverages sector is the only sector where the economic downturn had a very little effect during the last two quarters. A considerable growth in restaurant sectors had been observed in this market during this period.

Various national and local restaurant operators are showing a great appetite to find out properties in the Kolkata market for their formats.

'Barbeque Nation' a renowned restaurant chain which is already operational in Sector-V is looking at new locations.

'Five Rivers' a Kolkata based restaurant operator has finalised spaces in Mani Square mall (2500 sq.ft.) and Forum mall.

Local restaurant operators are very much in expansion mood. 'Azad Hind Dhaba' the well known local restaurant operator already finalised a property on the N.S.C. Bose Road. They are still on the look out for properties in various areas in north Kolkata.

Kolkata will likely to see a new bar format like sports bar, restobar in the coming months as brands like Xtreme Sports Bar, Man U Café are planning to open their formats here.

Another first food chain Domino's Pizza is also expanding in various parts of Kolkata. They have opened one new Store at Survey Park South Kolkata in the last six months.

Continued growth is the story for telecom sectors even in this recession period. Requirement of retail space by the telecom service providers as well as handset marketeers has grown tremendously over the last couple of years.

New entrants are adding up this requirements in multiple.

However, the demand of store size in this sector is very small ranging between 80 sq.ft and 300 sq.ft. Currently operators like, Idea Cellular, MTS mobile are looking for such smaller properties across all the micro markets in Kolkata such as Garia, Behala, New Alipore, Jadavpur, Rashbehari, Shyambazar, Howrah etc.

MALL VACANCY RATES Retail sales throughout the Kolkata market have declined over the last two quarters, resulting in higher vacancy rates. Vacancy rates in the Mani Square mall was 6% at the end of 2nd quarter and highest among the operational malls in Kolkata and 2% down from the end of 2008.

Vacancy rates remained unchanged in the City Centre-I and Forum mall (3% and 4%) compared to 2008 year-end vacancy. Vacancy rates in the South City mall and Metropolis have marginally increased (1% each) by the end of second quarter.

8%

6%

4%

2%

0% City Centre-1

Metropolis

Q4, 2008

Mani Square

South City

Forum

Q2, 2009

Source: NAI NK Realtors Research

2009 Mid Year Market Review

Rs. / sq.ft. / month

MALL SUPPLY IN THE COMING SIX MONTHS Mall

Location

Sq.ft.

City Centre II

Rajarhat

3,50,000

Lake Mall

Lake Market

2,50,000

La Vida

Salt Lake, Sector-III

85,000

MARKET ENTRY

The falling retail market in kolkata has resulted in continued decrease in rental values across the operational as well as up coming malls in Kolkata.

Rental values have started falling since the middle of 3rd quarter 2008 and continued till the end of the 4th quarter 2008. At that time the fall of average asking rental values in the CBD area malls were around 40%. Rental rates started stabilising from the start of 4th quarter and since then retail market is on the process of recovery.

Kolkata has witnessed the opening of Bengal Shrachi’s 'Block By Block' mall with the opening of 'Home Town' a huge 2,00,000 sq.ft. comprehensive home making store in New Town at the end of 2nd quarter. The store is bigger than Forum mall located on the Elgin Road.

This is the eighth store from 'Home Solutions Retail (India Ltd.), a part of Future Group. The other seven stores are located in Noida, Bengaluru, Hyderabad, Pune, Ahmedabad, Lucknow and Indore. This Home Town also has a Food Bazaar, which is spread across 4000 sq.ft .

The average asking rental rates in the malls in South Kolkata have decreased by 30%, in E. M. Bypass by 17%, in Salt Lake by 15% and in New Town by 10% over the last two quarters.

HIGH STREET RETAIL LEASE RATES Rs. / sq.ft. / month

'Home Town' store at Block By Block Mall, New Town Future Group is also rolling out large-format stores in and around the city over the next few months - four Big Bazaar outlets in Salt Lake and Lake Mall (45,000 sq.ft each), Sealdah (50,000 sq.ft.), a Pantaloons store in City Centre-II (40,000 sq.ft.) and two outlets in Mani Square- Fashion @ Big Bazaar and Planet Sports.

The fall in retail lease rates of key high street stand alone stores in the Kolkata market were less compare to the fall in the mall lease rates over the last one year. The average lease rates in the CBD area like Park Street, Camac Street, Elgin Road were around Rs. 200 per sq.ft per month.

In the secondary micro markets like Prince Anwar Shah Road, quoted rentals were in the range of Rs. (70120)/sq.ft/month, in Raja S.C. Mallick Road Rs.(55100)/sq.ft/month, in N.S.C Bose Road Rs. (6075)/sq.ft/month at the end of June of the current year.

FORECAST Expansion of major leading brands would be more in the coming months as the retail real estate rates are being stabilized.

Retailers would be more interested in revenue sharing to minimise the risk of loss and to maximise their profit in the shortest period of time.

Rentals for both malls and stand alone shops are expected to remain stable in the next two quarters.

Source: NAI NK Realtors Research

RETAIL RETAIL

MALL LEASE RATES

RESIDENTIAL

2009 Mid Year Market Review KOLKATA RESIDENTIAL MARKET A considerable demand for affordable housing has been witnessing since the market starts improving. A number of such affordable housing projects like Parvati Garden in Birati, Sugam Sabuj in Narendrapur and Green Field City near Behala Chowrasta are coming up in the Kolkata market. All these projects have been designed in such a way that a middle class home buyer will get all the modern facilities in affordable price, whereas all modern facilities were available only in the premium projects at the cost of premium price.

Global economic downturn, plunging share market, job loss across the world impacted the residential demand in Kolkata. As financial crisis deepened, speculation of the prices to decrease further affected the housing demand in most of the micro markets in Kolkata. The overall demand touched to its bottom some where between 4th quarter of 2008 and 1st quarter of 2009.

Major slump in housing sales due to falling demand in Kolkata was started at the beginning of 4th quarter of last year, while the other metro cities like Delhi, Mumbai and Pune had experienced the slump much earlier, sometime in the 1st quarter of 2008.

Movements in the premium residential segment particularly in Rajarhat area were discouraging over the last one year because of the prolonged recession coupled with few local factors like poor infrastructure, overprice, excess supply etc. However, correctly priced real estate projects from renowned developers had good demand inspite of the above negative factors in the same area.

'Eden Court' a residential project launched by Tata Housing and infrastructure in New Town at the end of first quarter of this year had very good response.

Kolkata residential market have witnessed 10%-20% price correction across the micro market. While the other metro cities witnessed 30%-40% correction over the last two quarters.

The residential market of Kolkata is slowly gaining the momentum. From March onward market started moving forward.

Improved global economic situation, low rate of interest in home loan, stimulus package offered by the government to the real estate industry and finally the favourable election results towards a stable government has all lead to the improvement in the housing demand.

Areas like Alipore, Baligunge Place, Queens Park, Sunny Park have witnessed some positive movements in the highly expensive luxury apartment sale (Rs. 3 to 6 crore per unit cost) in spite of the downturn effect. This is because all these areas are considered as the posh area of Kolkata where scarcity of land for such kind of development is very high.

The wait-and-watch policy which was adopted by the home buyers in the wake of the economic downturn is likely to be over.

ZONE WISE AVERAGE OUTRIGHT VALUE TREND IN KOLKATA RESIDENTIAL MARKET Rs.per sq.ft.

12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0

Q1

Q2

Q3

Q4

Q1

2007 Central

South-Central

Q2

Q3

South-West

East

Q1

Q2

2009

2008 South

Q4

Howrah

South-East

North

Source: NAI NK Realtors Research

2009 Mid Year Market Review

RESIDENTIAL RESIDENTIAL

RESIDENTIAL SALE RATES

RESIDENTIAL SALE RATES Rates in Rs. per sq.ft.

North Jessore Road VIP Road Madhyamgram Shyambazar B.T.Road

180 0 - 3000 2400 - 350 0 15 00 - 190 0 2 200 - 2 800 1500 -2 00 0

Central Park Street Loudon Street Theatre Road

9000 -10000 9000 -10000 9 000 -10000

SouthWest Alipore Behala Batanagar &

Maheshtala

800 0 -11000 180 0 - 22 00

1500- 26 0 0

South Central Queens Park 8000-11000 Sunny Park 8000 -11000 Ballygunge C ir. Rd. 8000 -11000 Ballygunge ParkRd. 8000-11000 Ballygunge Place - 5000 - 6000 Mayfair Road 7000 - 9 0 00 Goal Park 50 00 - 6000 5000 -7000 Gariahat Rashbehari 500 0 - 60 00

South Lansdown Road Bhawanipore P.A. Shah Road Jadavpur Tollygunge

6 00 0 - 8000 6 000 - 7000 3 500 - 6500 3 000 - 3500 3 300 - 40 00

South East Garia Narendrapur R.B.Connector

17 00 - 2300 180 0 - 22 00 410 0 - 46 00

Howrah Dobson Road 2500- 3200 GTRoad (South) 2500-3000

Sugam Sabuj Location Type of Development No. of Units Expected Launch Expected Completion Developer

Narendrapur Apartment / Row House 132 August-2009 December-2011 Sugam Griha Nirman Pvt. Ltd.

East Salt Lake

3000- 4500

Beleghata

2500-3000

Kankurgachi

3500-4500

EM Bypass (Central)

3600-5000

New Town

2200-3600

RESIDENTIAL LEASE RATES MAJOR ZONES

Rs./sq.ft./month

NORTH KOLKATA Shyambazar

12-15

V.I.P Road

10-15

Green Field City

EAST KOLKATA Salt Lake

15-20

E.M.Bypass (Central)

25-30

CENTRAL KOLKATA Park Street, Theatre Road

25-35

SOUTH KOLKATA Prince Anwar Shah Road

15-20

Jadavpur

10-15

Tollygunge

10-14

SOUTH - WEST KOLKATA Alipore

30-35

Behala

8-10

SOUTH - CENTRAL KOLKATA Ballygunge (Prime Areas)

30-40

Ballygunge (Other Areas)

30-40

SOUTH - EAST KOLKATA E.M.Bypass (Near RBConnector)

15-17

Garia

8-10

Narendrapur

8-10

Location Type of Development No. of Units Expected Launch Expected Completion Developer

Shibrampur Road, Behala Apartment Complex 3992 October-2009 In Phases Bengal Greenfield & Srijan Group

FORECAST Demand will likely to go up which will push up the sale, however the residential prices across the Kolkata market are expected to rise marginally in the next two quarters.

Garia and Narendrapur area will likely to see some rise both in price and demand as the metro railway is going to start its operation from Tollygunge to Garia by end of August this year.

Affordable residential projects demand will be more in the areas where connectivity and other infrastructure facilities are in good shape.

Source: NAI NK Realtors Research

LAND AND HOSPITALITY

2009 Mid Year Market Review KOLKATA LAND MARKET

KOLKATA HOSPITALITY MARKET

Low residential demand, non availability of fund, high cost of land and negative market sentiment due to the financial melt down which affected the Kolkata residential land market activity in a major way over the last couple of quarters is now showing a sign of revival. However, the rate of revival is very slow and sector specific.

As the corporate houses cutting their travel budgets to deal with the ongoing slowdown, the hospitality industry in Kolkata has been witnessing a slowdown since third quarter last year.

Closing a land deal since the inception of financial turmoil was out of the question. Property developers now have started showing their keen interest in closing new land deals. The Kolkata market has witnessed some land transactions since the begining of the second quarter. The demand is more in the residential sector.

Demand of residential land is more in the areas like B.T. Road, Birati, Sodepur, Dumdum, Nagerbazar, E.M. Bypass, Garia, Behala and Howrah.

SIGNIFICANT TRANSACTIONS Company

Location

Area

Ideal Group

D.H. Road, Thakurpukur

250 Cottah

Space Group

Foreshore Road, Howrah

100 Cottah

Mani Group

E.M. Bypass (Near Ruby)

46 Cottah

Though there is a substantial demand for residential land in the micro markets of Kolkata, other sectors like hospitality, educational and technical institutions are also aggressively vying for lands. Land on the E.M. Bypass and closer to airport or Salt Lake sector-V have high demand for the hotels while the institutions like management, technical would prefer to locate off the city where connectivity is good and land price is reasonable.

RESIDENTIAL LAND RATES Area Alipore (prime areas) Ballygunge (prime areas) Ballygunge (other areas) Park Street, Theatre Road Gariahat, Rashbehari Shyambazar V.I.P Road Salt Lake Jodhpur Park, Jadavpur Tollygunge, Behala Garia, Narandrapur, Joka, Kona Joka, Pailan Jessore Road, B.T. Road Madhyam Gram Developable land in fringe areas

Rates (Rs./Cottah) 5.0-8.5 5.0-8.5 4.5- 6.5 7 .0 -10.0 5.0 -7.0 0.7-3.0 1.5-2.5 1.0-4.0 1.0-2.5 0.3 -1.5 0.4-0.6 0.2 -0.5 0.3-1.5 0.2 -0.3 0.07-0.3

million " " " " " " " " " " " " " "

The industry have witnessed a big drop in occupancy over the last six months. It was 15% to 20% lower compared to last year. Average room tariff came down by 20% to 25%.

Currently the average room rent in the 5 star hotels ranging anywhere between Rs. 6,000 and Rs. 8,000.

The recession-roiled hospitality industry in Kolkata has not seen any dearth of private interest even in this downturn scenario when some of the upcoming foreign and domestic hotel majors along the Eastern Metropolitan Bypass either have put projects on hold or have slowed down the construction work.

International hotel chains like Starwood Hotel, Accor Hotels, Wyndham hotels are aggressively looking for suitable land and properties in Kolkata for their various formats.

The Starwood Hotel group will bring three formats such as Sheraton, Westin and Aloft in Kolkata and they have finalised a property in Rajarhat and looking for more properties for the other two brands.

One of Europe's leading Hotel Group, Accor has finalised a property for their Novotel brand and looking for properties for their Ibis brand.

Wyndham hotels an international hospitality major who has recently opened their Ramada Plaza brand in Delhi a few months ago is in the look out for properties in Kolkata for the Ramada Plaza brand.

ITC Welcomegroup will add a new tower comprises of 500 rooms with the existing two towers comprising of 238 rooms. On completion, it will be the largest hotel complex in Kolkata.

The new name of the revamped Great Eastern Hotel in the BBD Bag area will be 'The Lalit Great Eastern' after the opening of its door which has been re-scheduled in the last quarter of 2010 instead of early 2009.

FORECAST

INDUSTRIAL LAND RATES Demand Areas

Rates (Rs./Cottah)

NH-6 (From Shalop Crossing to Uluberia) NH-2 (From Dankuni Crossing to Chandannagar) Durgapur Expressway (From Dankuni to Tarakeshwar Crossing) D.H. Road (From Joka to Amtala)

0.10-0.4 million 0.06-0.2

"

0.06 -0.2

"

0.07- 0.2

"

In the next three to five years Kolkata will get 25-30 new hotels in different formats, and the capacity will be increased by approximately 3,500-4,000 rooms in these segments.

Demand of land for new hotels will be more in the areas like Rajarhat and along the E.M. Bypass in the coming months.

Source: NAI NK Realtors Research

2009 Mid Year Market Review KOLKATA INVESTMENT MARKET

Financial turmoil which impacted the growth of overall business in the sectors like organised retail, industrial production, export-import etc. ultimately restricted the warehousing market growth from the 3rd quarter onwards.

Kolkata has all type of real estate properties to attract investors and has been providing a steady return on their investment .

After the end of 1st quarter 2009, the warehousing market seems to have shown some sign of slow recovery. Since then few lease transactions have been concluded .

SIGNIFICANT TRANSACTIONS Company Renuka Sugar SAFEX Cadbury Idea Cellular MTS Mobile

Location

Sq.ft.

Raghudevpur-NH6 NH2 Dhulagar-NH6 Jangalpur-NH6 Jangalpur-NH6

1,50,000 1,10,000 25,000 23,050 20,000

Lease rates started out lower at the end of last year and now it seems to have stabilized. However, the Taratala zone has witnessed a marginal rise in recent times.

WAREHOUSE LEASE RATES Area

Rates (Rs./Sq.ft.)

NH-6 NH-2 Taratala, Hide Road Budge Budge Trunk Road B.T. Road

9 -13 9 -13 12 -15 12 -18

Investors have high demand of good commercial properties in the CBD and Sector-V area. Return on investment (ROI) in commercial properties hovering between 10% and 12% over the last two quarters.

Residential and industrial properties have provided 5% to 8% return in the same quarters.

During the entire recession period, investors have shown very low interest in retail properties. Low footfall and less conversion have impacted the retail sales in the malls and large high street stores in the prime retail areas over the last few quarters, resulting in lower asking rental rates and lower income from the properties.

Buy-to-sale investment transactions in the residential properties seems to have stopped at the end of last year and continued to the end of 1st quarter. However, since the residential market is improving, investors have started showing interest in buying.

Investors are now concentrating in buying commercial properties at soft launch, seeking appreciation or leasing out fetching more than 12% returns.

8 -10

There is now over 2.75 million square feet of warehousing space supply in the greater Kolkata warehousing area.

The average vacancy rate in the NH-6 area is about 30% , 6% up from the last quarter of 2008 and is expected to rise to 60% by the end of this year.

Two new developments are coming up in this area. Ma Ambe will add approximately 5 lakh sq.ft. with the existing facility. RPG Group is also coming up with 1.5 lakh sq.ft space at Alampur in the NH-6 area .

The average vacancy rate in the Taratala- Hide Road area is about 5% and in the NH-2 area vacancy is about 10%.

Among all the warehousing locations in Kolkata, NH-6 has the highest locational advantage due to its connectivity with South and West India. The area is surrounded by various industries and Industrial Parks.

Preference Scale 12 10 8 6 4 0 NH-6 NH-2

FORECAST The demand of investment transactions will be more in the coming months, however leased out property sale will decrease.

Taratala

Topsia

Barasat

Bantala

According to a recently conducted survey among the few corporate houses on their warehousing needs, NH-6 area has got the highest rating as a most preferred warehousing location.

Low interest rates will increase the number of investors as well as the amount a buyer can pay for a property.

Price of investment properties will likely to go up and ROI to go down, so investing during pre-launch will be maximum.

Source: NAI NK Realtors Research

WAREHOUSE AND INVESTMENT

KOLKATA WAREHOUSE MARKET

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dispositions, sublease, tenant representation, lease administration and audit, site searches, finance and investment services, demographic analysis, feasibility analysis, due diligence and related consulting and advisory services. For more information, visit NAI NK Realtors Web site at: www.nkrealtors.com This report contains information available to the public and NAI NK Realtors accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein. The same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawals without notice.