CITY REPORT

BANGALORE MARKET OVERVIEW

2009

CONTENTS
Summary Bangalore Map Bangalore Commercial Market i) Overview ii) Micro Market Description iii) Outlook iv) Major Projects Completed v) Major Projects Under Construction vi) Major Transactions Bangalore Retail Market i) Overview ii) Micro Market Description iii) Key Projects Completed iv) Key Projects Under Construction v) Key Transactions Bangalore Residential Market i) Overview ii) Micro Market Description iii) Major Projects Under Construction In 2009 Glossary p. 3 p. 4 p. 5 p. 5 p. 5 p. 8 p. 9 p. 10 p. 11 p. 12 p. 12 p. 12 p. 14 p. 14 p. 15 p. 16 p. 16 p. 16 p. 17 p. 18

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

SUMMARY
Bangalore Real Estate Market
The commercial market witnessed highest number of completions along the Outer Ring Road in the secondary business district. The overall Grade A commercial developments in 2009 crossed the total completed figures of 2008 signifying the initial signs of revival. The infrastructural development like the Traffic and Transit Management centres, flyovers and ongoing metro construction in the CBD and the SBD are expected to boost leasing activities in these micro markets in 2010. In the Bangalore Retail Market, expansions in secondary high streets were more active as compared to under construction malls and primary high streets. This was largely on account of limited availability of ready to occupy stores in newly launched malls and vacant properties at reasonable rates on primary high streets. Limited budget for expansion and delay in mall completions, encouraged the retailers to opt for reasonable yet lucrative secondary micro-markets. The Bangalore Residential market witnessed limited number of newly launched projects across the micro markets during 2009 because the developers postponed the launch of their projects on account of ample availability in under construction projects. The concept of budget apartments where in the total Built Up Area (BUA) for apartments varied from 950 sq ft to 1,050 sq ft gained popularity in the Peripheral Business Districts. For the year 2010, it is expected that the completion of flyovers, elevated highways and complementary commercial and retail projects will boost the demand for Residential Real Estate in Secondary and Peripheral micro-markets.

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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BANGALORE MAP

NH -7

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Yelahanka New Town

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Chikka

Kodigehalli Kodigehalli Kere BEL

Rd

Bagalakunte

Bellary Rd

d Do

Chikka Bommasandra

R ur lap Bal

Yelahanka Kere

Bangalore International Airport

Major Roads Roads Railway Station Airport Outer / Inner Ring Road

River / Water Bodies Park / Green Area CBD SBD PBD

Agrahara

NH-4

Defence Colony

Kodig ehalli Rd

Byatarayanapura Rachana Halli Kere

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Peenya
Kariro banhal li Rd

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Mattikere Yashvantpur
NH -4

Rd

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Hebbal

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Bupasandra Rd

ain R d

Lottegollahalli

Rd

Rd

Ramanamaharishi Rd

Kam anhalli

anav
ar R
Yeshvantpur Suburb

Esteem Mall Jalahalli Lottegollahalli Hebbal Kere Nagavara Kere

-4 NH

ilw Ra ay

Nagavara

403, The Estate, 121, Dickenson Road

Anandapuram
d sR ra ad dM Ol Yellarnallappachetty Kere Chikkabanhalli
Bhattara halli

Hennuru Bhattarahalli
Ring Roa d

Bel Road

Oute r

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iR

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Munireddypalya

Rd Chord

Hegganahalli

Malleshvaram

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Bangalore Palace

Jayamahal Palace

Krishnaraja Puram Bangalore East Rd Cox Town Baiyyappana Halli -4 NH

Old

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Ramamurthy Nagar Krishnarajapura Channasandra

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Univer sity R d

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Brigade Rd

Magadi Rd

Ka st ur ba

Ulsoor
Kodihalli C V Raman Nagar LB Shastri Nagar HAL Vimanpura Vartur Rd Marattahalli Innovative Multiplex Dodda Nekkundi

2 Main Rd

Brigade Tech Park

WHITEFIELD
Borewell Rd

Rd

Cho rd

ed Rd Elevat Victoria
re so My

RM

Road

Albert Victor Rd Urvashi Lal B agh Fo rt Lal Bagh Basavangudi

Kanakpura Rd

Richmond LanTown g fo rd Rd

Channapanhalli

Airport Road

Chamarajpet

K R Road

Golf Course

Bangalore HAL Airport

Vartur Rd

Bangalore University

Ro ad

Bannerghatta Rd

e or ys M

Hosakerehalli Kere

Banashankari

Bellandur

Sarjapur Rd
Mandivala Outer Rin g Ro BTM Layout
-7 NH

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South End Rd

ad
HSR Layout

U
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Outer Ring Road

Uttarahalli
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Mandivala Tank Bommanahalli

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Chandrapura Kudlu Rd Kudlu

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Chikka Nayakamahalli

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Begur Rd

Bannerghatta

Dodda Kalsandra

JP Nagar

Begur

Ka na kp ura

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

Anekal

Va rtu rR d

h ut So ad Ro

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Vartur Kere

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Jayanagar

in

Mar

Kormangala
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da Rd

Vartur Adarsh Palm Retreat

Bellandur Tank Salarpuria Softzone

Soul Space

Whitef ield

Bangalore City Railway Station

ce Course Road Raj Ulsoor Bhavan Chinnaswamy Ra Race Cricket Lake Seshad Course Stadium Vidhan ri Rd Cubbon Soudha KSRTC High Rd Bus Terminal Court MG R oad Cubbon Park d Shanthala ChMajestic Nagar ikp n ete mo Rich hanro Rd d Chikpete Vict ori a R d

1 Ma in Rd

Indira Nagar

Rd

Old
Rd

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Domsandra

Belatur

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Whitefield

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Rd

Hudi
d oa gR

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Railw Southern

Un ty rsi ive Rd

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BANGALORE COMMERCIAL MARKET

i) Overview
The Bangalore office market witnessed continuous increase in supply of Grade A buildings along all the micro-markets across the four quarters of 2009. The total supply in 2009 was approximately 9.20 mn sq ft as compared to 5.19 mn sq ft in 2008. The largest amount of completion was recorded along Outer Ring Road stretch while the CBD also significantly contributed to Grade A stock as compared to 2008. In the year 2009, the rental and the capital values increased in the range of 1.4%-15% and 2.9%-10.2% respectively across the micro markets except in Electronic City, while the vacancy rates were also significantly high across micro markets as compared to 2008. The average vacancy rate in CBD stood at 1.8% while in SBD and PBD it was marked approximately at 8.5% and 17% respectively in 2009.

ii) Micro Market Description a) Central Business District (CBD)

Supply & Vacancy Trend
The CBD witnessed completion of 0.53 mn sq ft with six new developments over the four quarters of 2009 as compared to almost non-existent supply of Grade A buildings in year 2008. On account of significant addition to Grade A stock, the vacancy rate closed at 1.8% in 2009 while it remained as low as 0.1% in 2008. With the high demand in CBD we expect the vacancy rates to reach near zero levels. In 2009 the total volume of transactions was approximately 0.41 mn sq ft in the CBD of which about 0.13 mn sq ft (31.71%) was taken up in the fresh supply (new development), while the remaining was taken up in second generation buildings. This constituted of three large sized transactions and couple of small and medium-sized transactions in the range of (~8,000 to 15,000 sq ft).

Supply & Vacancy Trend

6,000 5,900 5,800 2.00% 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% Q1 2009 Q2 2009 Q3 2009 Q2 2007 Q3 2007 Q1 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009 0.00%

Rental & Capital Values

Despite the increase in vacancy rate in this micro-market, the average rentals of Grade A buildings marginally increased by 4.29% from INR 70/sq ft/month in 1H 2009 to INR 73/sq ft/month in 2H 2009, signifying improvement in the market scenario on account of increased number of inquiry for spaces in CBD. The y-o-y change in the rental values was insignificant as it increased by ~1.39% in 2009 from 2008. The y-o-y decrease is on the account of decrease in rentals during 1Q 09. The capital values also increased marginally by 4.28% from INR 7,200/sq ft in 1H 2009 to INR 7,508/sq ft in 2H 2009, while the y-o-y increase was approximately 2.85%.

Stock (000 sq.ft)

5,700 5,600 5,500 5,400 5,300 5,200 5,100 5,000

Vacancy Rate

Infrastructure Development
In addition to the ongoing metro project, Traffic and Transit Management Centre is proposed at the India Express circle in CBD, in order to promote public transport which in turn is expected to reduce the traffic congestion in CBD. . These public infrastructure developments along with the development of two 5 Star Hotel projects is expected to push up the rental values in future, on account of greater demand which is expected in the quarters to come.

Rental Value (INR/sq.ft/month)

Rental & Capital Values

85 80 75 70 65 60 Q1 2009 Q2 2009 Q3 2009 Q2 2007 Q3 2007 Q1 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009 55 8500

Capital Value (INR/sq.ft)

8000 7500 7000 6500 6000 5500

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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b) Secondary Business District (SBD)

Supply & Vacancy Trend Supply & Vacancy Trend 26,000 24,000 Stock (000 sq.ft) 22,000 20,000 18,000 16,000 14,000 12,000
Q1 2009 Q2 2009 Q3 2009 Q2 2007 Q3 2007 Q1 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009 The SBD continued to be the most preferred location for occupiers due to sufficient supply of Grade A buildings at competitive prices, capacity to serve affordable residential requirement and supporting public infrastructure to enhance its connectivity to the entire city. The total new completion of Grade A buildings in SBD was approximately 5.67 mn sq ft in 2009 of which 4.18 mn sq ft was delivered in 1H 2009. Compared to 2009 the total Grade A office supply in 2008 was approximately 3.86 mn sq ft. Most of the completions in 2009 were along the eastern stretch of outer ring road (Marathahalli Sarjapur). On the other hand Koramangala, Old Airport Road and 100 Ft Indiranagar had very limited supply of Grade A buildings in 2009, but had significant supply of Grade B mixed use projects (viz. office and retail), which help in maximizing the project's overall rental returns. The vacancy rate significantly increased and stood at 7.5% by the end of 2009 as compared to 0.1% in 2008. This marginal increase in the vacancy rate was on account of increased supply in 2009 and fall of few major deals that were concluded in 2008. The total volume of transaction in SBD was the highest as compared to other micro-markets and stood at 3.15 mn sq ft in 2009. SBD recorded the highest number of transactions on account of availability of operational Business Parks and SEZ.

8% 7% 6% 5% 4% 3% 2% 1% 0% Vacancy Rate

10,000

Rental & Capital Values Rental & Capital Values Rental Value (INR/sq.ft/month) 46 45 44 43 42 41 40 39 38
Q1 2009 Q2 2009 Q3 2009 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009 The average rental value in the SBD significantly increased by 12.5% from INR 40/sq ft/month in 1H 2009 to INR 45/sq ft/month in 2H 2009, which was on account of increased demand for office space in this micro-market. The y-o-y rental value also witnessed a positive change of approximately 12.5% from 2009 to 2008 on account of increased number of activities in this location, similarly the capital value also increased marginally by 10.2% from INR 4,000/sq ft during 1H 2009 to INR 4,409/sq ft by 2H 2009.

4500 4400 4300 4200 4100 4000 3900 3800 3700 Capital Value (INR/sq.ft)

Infrastructure Development
In order to decrease traffic congestion and travel time to these micro-markets, Traffic and Transit Management centers are being developed in Kormangala, Old Airport road, Bannerghatta road and Jayanagar. Adequate public infrastructure accompanied by adequate supply at reasonable commercials is expected to continue attracting occupiers to these locations.

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CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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c) Periphery Business District (PBD)

Supply & Vacancy Trend Supply & Vacancy Trend 18,000 17,000 16,000 Stock (000 sq.ft) 15,000 14,000 13,000 12,000 11,000 10,000 9,000
Q1 2009 Q2 2009 Q3 2009 Q2 2007 Q3 2007 Q1 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009 The market in the Whitefield area of PBD picked up during 2009, as significant number of medium to large sized spaces were taken up. The availability of new commercial developments with larger floor plates at rentals much lower than other micro-markets attracted occupiers with larger space requirement. The total supply of Grade A buildings in Whitefield was approximately 2.73 mn sq ft in 2009 as compared to just 0.74 mn sq ft in 2008. With the increase in the supply in Whitefield, the vacancy rate also stood as high as 15.1%. while the rental values On the other hand the supply in Electronic City halved in 2009 as the addition in 2009 was close to 0.28 mn sq ft as compared to addition of 0.59 mn sq ft in 2008. The vacancy rate increased from 21.1% to 24.1% on account of slower leasing activities due to lack of proper access roads and limited supply of new Grade A developments.

26% 24% 22% Vacancy Rate 20% 18% 16% 14% 12% 10%

8,000

Rental & Capital Values

The rental values in Whitefield rose by approximately 15% from INR 26/sq ft/month in 1H 2009 to INR 30/sq ft/month in 2H 2009. The increase in rental values was on account of addition of new projects in PBD which are in proximity to the SBD, thus offering competitive space. The capital value also showed an upward movement as it increased from INR 2,400/sq ft in 2008 to INR 2,555/sq ft in 2009 (+6.45%).

Rental & Capital Values Rental Value (INR/sq.ft/month) 29 28 27 26 25 24 23

Q1 2009 Q2 2009 Q3 2009 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009

2900 2700 2500 2300 2100 1900 1700 1500 Capital Value (INR/sq.ft)

The rental and the capital value in Electronic City remained stagnant at INR 23/sq ft/month and INR 2,300/sq ft respectively throughout 2008 and 2009.

Infrastructure Development
The ongoing construction of elevated highway from Silk Board junction to Electronic City was finally completed in January 2010 which dramatically reduced the travel time to Electronic City by reducing the traffic congestion on this stretch. Apart from this, no major infrastructure developments were witnessed in the PBD.

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CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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iii) Outlook a) Central Business District (CBD)

A total of 0.3 mn sq ft of fresh Grade A supply is lined for completion in 2010 in CBD. The early signs of revival in the market coupled with addition in fresh stock are expected to bring in further momentum in the leasing activities.

b) Secondary Business District (SBD)

The year 2010 is expected to have fresh Grade A supply of ~4.54 mn sq ft with approximately 2.55 mn sq ft being on the eastern stretch of Outer Ring Road. The eastern stretch of outer ring road is expected to become the preferred location for commercial occupiers on account of the availability of large land parcels suitable for commercial development, its capacity to manage corresponding residential requirement at affordable rates and the construction of fly over which would significantly reduce traffic congestion.

c) Periphery Business District (PBD)

In 2010, Whitefield area is likely to witness supply of approximately 6.62 mn sq ft while Electronic City is expected to add approximately 1.15 mn sq ft to Grade A buildings. Activities in Electronic City are accepted to gain momentum from 1Q 2010, with the completion of elevated highway and adequate supply of Grade A developments in the micro-market.

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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iv) Major Projects Completed Major Projects Completed Property

Prestige Nebula (Block 1) Salarpuria Cambridge Mall (Commercial Space) The Residency Prestige Dynasty Baghmane World Technology Centre Block I Pri Tech (Block 6 & 7) Vaishnavi Solitare Embassy Manyata (C1,F2) Embassy Manyata (L5) Global Technology Place Kalyani Magnum (Phase II) Adarsh SEZ (Honneywell Block) Gopalan Global Axis Gopalan Global Axis Embassy Paragon Sri Ranga IT Park

Location
Cubbon Road Cambridge Road Residency Road Ulsoor Road Outer Ring Road Sarjapur- Outer Ring Road Sarjapur-Kormanagala Road Hebbal Outer Ring Road Hebbal Outer Ring Road Outer Ring Road Outer Ring Road Sarjapur ORR Whitefield Whitefield Whitefield Electronic City

Micro market
CBD CBD CBD CBD SBD SBD SBD SBD SBD SBD SBD SBD PBD PBD PBD PBD

Total built up area (sq ft)

61,300 1,20,000 1,20,000 1,23,286 4,50,000 18,00,000 1,10,000 10,66,000 3,82,000 2,08,000 4,20,000 5,05,000 12,00,000 6,00,000 4,00,000 1,20,000

Completion date
Q1 2009 Q1 2009 Q4 2009 Q4 2009 Q2 2009 Q2 2009 Q3 2009 Q2 2009 Q3 2009 Q4 2009 Q4 2009 Q2 2009 Q2 2009 Q4 2009 Q2 2009 Q2 2009

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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v) Projects Under Construction Projects Under Construction Property

Cosmo Lavelle Vaswani Centropolis Salarpuria Triton North Star Prestige EXORA (SEZ) Phase-1 Sigma Grand Vrindavan Tech Park Phase II Embassy Manyata IBM Block-G1 Embassy Manyata NSN Block-L6 Adarsh SEZ (Multitenanted) Corporate Centre Prestige Shantiniketan Brigade Metropolis Summit 2 Bhoruka IT Park Phase II Bearys Global Research Triangle Harita IT Park Block I Fortune Tech Park
Source: BNP Paribas Real Estate, India

Location
Lavelle Road Langford Town Off KH Road Malleshwaram-Rajajinagar Outer Ring Road Outer Ring Road Outer Ring Road (Eastern Stretch) Hebbal Outer Ring Road Hebbal Outer Ring Road Sarjapur ORR Whitefield Whitefield Mahadevpura - Whitefield Whitefield Whitefield Ashram Road Electronic City - Phase 1 Electronic City - Phase 1

Micro market
CBD CBD CBD SBD SBD SBD SBD SBD SBD SBD PBD PBD PBD PBD PBD PBD PBD

Total built up Completion date area (sq ft) ( expected )

1,50,000 1,63,000 50,000 11,00,000 7,00,000 5,00,000 6,00,000 4,00,000 3,82,000 5,00,000 4,72,000 31,00,000 5,88,000 4,23,000 12,50,000 3,85,000 3,50,000 Q2 2010 Q4 2010 Q1 2010 Q1 2010 Q2 2010 Q4 2010 Q2 2010 Q1 2010 Q4 2010 Q2 2010 2010 Q1 2010 Q2 2010 Q3 2010 Q1 2010 Q1 2010 Q2 2010

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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vi) Major Transactions Major Transactions Tenant

Serco BPO Citrix Systems LSI Logic Northen Operating Services Nokia Siemens Networks IBM Cisco Colt Telecom DigiCaptions Educomp Solutions Indegene TESCO

Property
Prestige Libra Prestige Dynasty Global Technology Place Manyata Embassy Business Park Manyata Embassy Business Park Manyata Embassy Business Park Prestige Cessana Business Park Manyata Embassy Business Park Embassy Golf Links Business Park HM Vibha Towers Embassy Golf Links Business Park NR Enclave

Micro market
Lalbagh Road Ulsoor Road Sarjapur ORR Outer Ring Road Outer Ring Road Outer Ring Road Sarjapur ORR Outer Ring Road Inner Ring Road Koramangala Inner Ring Road Whitefield

District
CBD CBD SBD SBD SBD SBD SBD SBD SBD SBD SBD PBD

Size (sq ft)

55,000 1,27,000 2,50,000 1,24,166 6,45,000 4,00,000 2,60,000 36,000 29,000 34,700 26,000 1,30,000

Year
Q2-Q3 2009 Q4 2009 Q4 2009 Q1 2009 Q1 2009 Q1 2009 Q2 2009 Q2-Q3 2009 Q2-Q3 2009 Q1 2009 Q2 2009 Q3 2009

Source: BNP Paribas Real Estate, India

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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BANGALORE RETAIL MARKET

i) Overview
The year 2009 saw measured activities from the developers as the retailers preferred secondary high streets over the under construction malls. This resulted in developers delaying the completion of malls under construction which subsequently delayed the completion timelines of these projects. The slow moving strategy adopted by retailers during 2009 led many mall developers to postpone their project completion in 2010. Hence the total supply of malls remained close to 1.11 mn sq ft in 2009 which denotes only 50% of the total expected supply for 2009. The total mall supply in 2008 was only 0.52 mn sq ft across all micro markets which helped developers command the lease terms on the back of high demand from retailers. Although 2009 did not witnessed major activities in the mall market, the high street market saw initial signs of revival with emergence of new secondary high streets across the city. Less availability of the ready built space in malls and emergence of high streets has stabilized the rental values which have shown only a marginal increase.

ii) Micro Market Description a) Shopping Centre

Supply & Vacancy Trend
The Bangalore shopping centre witnessed fresh supply of approximately 0.41 mn sq ft and 0.35 mn sq ft in the secondary and the suburban micro-market respectively in 2009 as compared to supply of 0.15 mn sq ft and 0.37 mn sq ft in the primary and secondary micro-market respectively during 2008. The addition of fresh stock in 2009 was less as compared to the expected figure, since the developers delayed the launch of projects on account of implied effects of credit crunch and slowdown in the global market.

Retail Market Sentiment

The retailers showed less interest in signing up spaces in under construction malls as their funds were blocked in the mall projects that were already delayed. The limited availability of retail space in operational malls and higher mall rentals as compared to most of the high streets increased the retailer's interest towards emerging secondary high streets. Retailers were encouraged to expand in these micro-markets as they could immediately start operations there and gain on first mover advantages like location preference, reasonable rentals and potential but untapped market. One the other hand, vacancy rates in the operational malls remained low to the tune of 1.5% because of the limited supply across micromarkets. A drop of 5% and 1.69 % was observed in rental values in primary and secondary micro markets respectively over 2008-09. Willingness of developers of operational malls to lease the limited vacant spaces at a discounted price was the prime reason for this yo-y decline.

2800 2600 2400 2200 2000 1800 1600 1400 1200

Q1 2009 Q2 2009 Q3 2009 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q4 2009

0.03 0.025 0.02 0.015 0.01 0.005 0

1000

Outlook
The Bangalore Mall Market is expected to witness completion of 3.59 mn sq ft in the secondary and the suburban micro-market, of which nearly 3.1 mn sq ft is expected in the secondary micromarkets of Bannerghatta road, outer ring road (eastern stretch) and Malleshwaram. Even though a significant larger supply is piling up in comparison to the previous year, retailers are not expected to cannibalize on their sales-per-foot in the medium to long term as this supply would be catering to different residential catchment scattered across the city. The eastern stretch of outer ring road (Mahadevpura - Sarjapur ORR) also witnessed launch of two major hypermarkets totaling to approximately 0.09 mn sq ft in 4Q 2009. Availability of large land parcels suitable for mixed use development anddensely populated surrounding areas have made this micro-market a lucrative location for large retail formats. Competition from the emerging high streets is expected to keep the mall rentals range bound and an increase in Mall rental values is not expected over the next two years.

Stock (000 sq.ft) 250 230 210 190 170 150 130 110 90 70 50

Vacancy

Q1 2009

Q2 2009

Q3 2009

Q1 2007

Q2 2007

Q3 2007

Q4 2007

Q1 2008

Q2 2008

Q3 2008

Primary

Secondary

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

Q4 2008

Q4 2009

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b) High Street
High street
Commercial Street MG Road Brigade Road Indiranagar 100 Ft Road Koramangala 80 Ft Road Jainagar 4th Block Marathahalli (Home stop junction) Vitthal Malya Road Sampige Road

Micro market
CBD CBD CBD CBD CBD CBD SBD SBD SBD

Rental values (2009)

180 200 150 100 70 120 100 120 60

Supply & Vacancy Trend

Owing to the limited supply and high rental values in operational and under construction malls, high streets remained preferred business location for retailers.

High Street Market Sentiment

There were signs of increased sentiment of retailers in the secondary high streets of DVG Road (Banashankhari), Kamanahalli Main road, New BEL road and Jayanagar (9th Block) , but business on primary high streets of Indiranagar 100 Ft Road and CMH Road temporarily slowed down on account of ongoing Metro construction.

Outlook
New emerging high streets are expected to retain retailer's interest on the account of favorable lease terms, readily available space and favorable residential catchment. . Demand for the retail space to the tune of 750 1,000 sq ft is expected to remain buoyant in high streets over a medium to longer term. Affordable rentals and thick residential catchment which have attracted the retailers are further expected to increase the momentum of activities in these emerging secondary high streets during 2010. The rental levels on the high streets are expected to remain range bound for next six months. Increased retailer activity is expected to continue on the primary high streets of Indiranagar 100 ft road and CMH road after the completion of Metro link in these micro markets.

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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iii) Key Projects Completed Key Projects Completed Property

Gopalan Arch Mall Banngalore Central Forum Value Mall

Location
Raj Rajeshwarinagar JP Nagar Whitefield

Total built up area (sq ft)

1,63,000 2,50,000 7,63,000

Micro market
SBD SBD PBD

Completion date
Completed Completed Completed

iv) Key Projects Under Construction Key Projects Under Construction Property
Mantri Mall Royal Meenakshi Mall Soul Space Spirit Brigade Orion Gopalan Innovation Mall Signature Shopping Mall The Arcade (Brigade Metropolis) Forum Shantiniketan

Location
Malleshwaram Bannerghatta Road Marathahalli - Sarjapur ORR Rajkumar Road Bannerghatta Road Old Madras Road Whitefield Road Whitefield Road

Total built up area (sq ft)

9,00,000 3,70,000 2,00,000 11,00,000 1,80,000 3,05,000 80,000 4,50,000

Micro market
SBD SBD SBD SBD SBD SBD PBD PBD

Completion date
Q1 2010 Q2 2010 Q4 2010 Q4 2010 Q1 2010 Q4 2010 Q2 2010 Q4 2010

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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v) Key Transactions Key Transactions Tenant

More Hypermarket Marks & Spencers Star India Bazaar (Tata Trent) Taco Bell Reliance Trends Reliance Footprints Reliance Digi Reliance Timeout Reliance Home Showoff Odessy Books Kalanjali Prestige Manstore Health & Glow

Property
Stand Alone Mantri Mall Royal Meenakshi Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall Mantri Mall

Location
Mahadevpura Malleshwaram Bannerghatta Road Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram Malleshwaram

Total built up area (sq ft)

60,000 35,000 60,000 3,500 25,000 6,000 18,000 18,000 21,000 17,000 9,500 7,000 6,500 6,000

CITY REPORT BANGALORE MARKET OVERVIEW - 2009

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BANGALORE RESIDENTIAL MARKET

i) Overview
Low lending rates coupled with ample supply across the micro markets has increased the demand for the residential condominium segment across secondary and peripheral markets of Bangalore. On account of low supply and high demand, premium apartments commanded high absorption rates in primary micro market of Bangalore. Capital Values have not shown significant increase across all the micro markets, as was witnessed in early 2006-07.

Capital Values
Micro market of RMV in North Bangalore has seen an increase of 10% in capital values over 2008, while the capital values in other locations of the city were stagnant. Many developers are waiting to clear the vacant stock before they launch any new project and are aggressively marketing their projects and wooing customers with special offers and rates. The high vacancy in this market was due to fewer developments as the developers abstained from taking up any new commercial as well as retail projects. The construction of flyovers and metro in the secondary micro market thus causing chaotic traffic jams is another reason for high vacancy as the buyers are waiting for the work to get over or reach completion before they take possession of their dream homes.

ii) Micro Market Description a) Primary Residential Market

Supply & Vacancy Trend
Absorption in primary micro market is not a major function of lending rates and primarily the demand in this micro-market is derived from the High Income Group (HIG) or elite class. Also the sale of apartments in this micro market is through exclusive invitation of the focused clientele by the developers.

c) Peripheral Residential Market

Supply & Vacancy Trend
Huge stock under completion and slow absorption rate kept the capital values at bay. At present there are approximately 15,000 apartments under construction in peripheral micro markets of Bangalore.

Capital Values
Capital values in primary micro market are in the range of INR 9,000 per sq ft INR 11,000 per sq ft in the CBD. The price may vary depending on the location and neighborhood of the project. However due to the recent economic depression the rentals are also at an all time low in this market. Many developers have postponed the launch of their projects in these areas due to unavailability of funds and vacant stock of completed projects.

Capital Values
Developers are also considering launch of budget apartments in peripheral locations due to low land prices. The typical built up area of these apartments vary from 950 sq ft to 1,050 sq ft. We expect the Capital values to show a downward momentum in shorter term till the demand supply balance is attained. No new projects are expected to launch in a short to medium term. With the completion of the Elevated Expressway on Hosur Road, the travel time has reduced dramatically to Electronic city and this may help increase the demand for residential properties in this micro market. The demand is also expected to rise in and around Bannergatta Road and Whitefield area as the developers have resumed the construction of malls which were put on hold due to lack of investor interest and funds.

b) Secondary Residential Market

Supply & Vacancy Trend
Ample supply, increased absorption in old projects and competitive pricing kept the capital values range bound. There has been less number of new projects launched because of the huge vacant stock in under construction projects.

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iii) Major Projects Under Construction In 2009 Major Projects Under Construction In 2009 Project
Gold Opus Nitesh Camp David Vaishnavi Nakshatra Smondoville Hiranandani Upscale Gold Towers

Developer
Gold Developer Nitesh Developers Vaishnavi Group Patel Reality Hiranandani Upscale Gold Developers

Location
Millers Road Frazer Town Yeshwantpur Electronic City Bannerghatta Road Hennur Main Road

Number of apartments
14 125 64 400 300 194

Size (sq ft)

3,000 Each 1,250 Each 1,195 &1,699 Each 360 to 1,350 Each 1,265 to 2,061 Each 1,800 to 2,800 Each

Micro market
CBD CBD SBD PBD PBD PBD

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GLOSSARY
Absorption: Occupied Stock (n) Occupied Stock (n-1); Where n is the specified period (quarter, year etc.) Bare Shell: Premises consisting of basic structure with lifts, power supply to junction box, water supply line, toilets BPO: Business Process Outsourcing BUA: Built up area CBD: Central Business District SBD: Secondary Business District PBD: Periphery Business District Completed Stock: Either the building has received occupancy certificate or the client has moved in and occupied space and started working in a particular premises DU: Dwelling Unit EPIP: Export Promotion Industrial Park FAR: Floor Area Ratio (BUA/ Plot Area) Grade A: Space Office Space with efficiency in excess of 75%, floor plate in excess of 15,000 sq. ft., Car Parking ratio of atleast 1 per 1000 sq. ft., Floor-to-ceiling height in excess of 3.75 m, Power provision of 1.25KVA per 100 sq. ft. with 100% power-backup wherever applicable and professionally managed facilities Ground Coverage: It is the total covered area on ground by the built component and is expressed as a percentage of the plot area Hard Option: Real estate space reserved by the lessee for future occupation within a particular time frame and at a pre-decided rental INR: Indian National Rupees Pre-lease: Space committed for lease before completion of construction Speculative Stock: The stock which can be leased and excludes Built-to-Suit (BTS) and Campus facilities. Stock: Cumulative Supply Supply: New construction in a particular specified period Tier I Cities: NCR, Mumbai and Bangalore Tier II Cities: Chennai, Hyderabad, Pune, Kolkata Transaction Volumes: Total number of transaction in a particular specified period Vacancy: Total vacant space in the completed stock Warm Shell: Premises consisting of power backup, high side A.C., common area fit outs and fitted out toilets Q on Q: Quarter on Quarter y-o-y: year-on-year (All growth figures in this report are y-o-y unless otherwise mentioned IT: Information Technology ITES: Information Technology Enabled Services (includes various services ranging from call centres, claims processing, medical transcription, e-CRM, SCM to back-office operations such as accounting, data processing, and data mining) ORR: Outer Ring Road Repo Rate: Rate that an eligible depository institution (such as a bank) is charged to borrow short term funds directly from the central bank through the discount window Reverse Repo Rate: Interest rate that a bank earns for lending money to the Reserve Bank of India in exchange for government securities SEC A, B, C & D Socio: Economic Classification; SEC A represents the highest propensity to spend and SEC D represents the lowest propensity to spend. Sq.ft: Square Feet Stamp Duty: Form of tax charged on instruments (written documents) requiring a physical stamp (for government legality) to be attached to or impressed. Mn: Million New: Building built within the last 5 years. Major Refurbishment: Building which has undergone structural alteration less than 5 years ago, subject to planning permission. Recent: Building less than 10 years old. Renovated: Building which has undergone renovation work not requiring for planning permission less than 5 years ago. Modern: High-performance building over 10 years old. Old: Low-performance building over 10 years old. CCI (Cost of construction index): Index that makes quarterly measurements of construction prices for new house building. It is the price after VAT paid by the owner to construction companies. It excludes land-related prices and costs (site development, special foundations, etc.), fees and financial costs. Demand: A search for premises expressed to BNP Paribas Real Estate. The analysis pertains only to the flow of new demand expressed. For the occupier: Operation undertaken by an occupier for its own purposes. New Supply: Any new building and/or heavily refurbished building that adds to the existing stocks. These are analysed according to progress. Completed new supply: Buildings on which construction work is finished. Under construction: Buildings on which construction has effectively begun. Prior demolition work is not taken into account. Planning permission granted: Authorisation to build obtained, generally booked after settlement of third party claims. Planning permission submitted: Planning permission requested, being processed. Pre-letting: Transaction by an occupier more than 6 months before the delivery of the building. Headline rent: Annual rent per square meter, featured on the lease, and expressed excluding taxes and charges. Does not include attached premises such as parking areas, archives, staff canteens, etc. If the rental is progressive, the value applied is the average for the first 3 years or the fixed term of the lease. Average headline rent: Weighted average of rented area. The average featured is a moving average over 3 quarters, to smooth out the changes. Underlying rent: Annual rent per square meter expressed free of tax and charges and excluding advantages agreed by the owners (rent incentive building works, etc). Prime rents: Represents the top headline rent (excluding non significant transactions) for an office unit:- of standard size, of the highest quality and specification, in the best location in each market. Top rent: Represents the top headline rent for an office unit. It is not necessarily a prime rent. Second hand premises: Premises that have been previously occupied by an occupier for vacant for more than 5 years. Renovated: Premises that have been renovated for the new occupier. Very good condition: High-performance premises of high quality. Existing state of repair: Low-performance premises that can be rented as they are. To be renovated: Low performance premises that need renovation. Supply available within 1 year: All premises and buildings available within 1 year including the supply available immediately, new supply that has not been pre-let and second hand supply that will be vacated definitively (notable terminated leases). Take-up: Rental or sale of a property asset, finalised by the signature of a lease or a bill of sale including turnkey transactions and owner-occupier. The transaction is only taken into account once any existing conditional clauses have been lifted. Vacancy rate: Ration measuring the relationship between the supply immediately available and the existing stock. BNP Paribas Real Estate cannot be held responsible if, despites its best efforts, the information contained in the present report turns out to be inaccurate or incomplete. This report is released by BNP Paribas Real Estate and the information in it is dedicated to the exclusive use of its clients. The report and the information contained in it may not be copied or reproduced without prior permission from BNP Paribas Real Estate.

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LOCATIONS

ALLIANCES
ABUDHABI Al Bateen Area Plot No. 144, W-11 New Al Bateen Municipality Street 32 P.O. Box 2742 Abu Dhabi, UAE Tel: +971-505 573 055 Fax: +971-44 257 817 JERSEY 4th Floor, Conway House Conway Street St Helier Jersey Je2 3NT Tel: +44-15 34-62 90 01 Fax: +44-15 34-62 90 11 LUXEMBOURG EBBC, Route de Trves 6 Bloc D 2633 Senningerberg Tel: +352-34 94 84 Fax: +352-34 94 73 ROMANIA Union International Center 11 Ion Campineanu Street Sector 1 Bucharest 010031 Tel: +40-21-312 7000 Fax: +40-21-312 7001 SPAIN Mara de Molina, 54 28006 Madrid Tel: +34-91-454 96 00 Fax: +34-91-454 96 04 UNITED KINGDOM 90 Chancery Lane London WC2A 1EU Tel: +44-20-7338 4000 Fax: +44-20-7430 2628 USA 787 Seventh Avenue 31st Floor New York, NY 10019 Tel: +1-917-472 4970 Fax: +1-212-471 8100 ALBANIA Danos & Associates Boulevard Deshmoret e Kombit Twin Towers - Tower 2 11th Floor Tirana Tel: +355-4-2280488 Fax: +355-4-2280192 AUSTRIA Dr. Max Huber & Partner Dr. Karl-Lueger-Platz 5 1010 Vienna Tel: +43-1-513 29 39 0 Fax: +43-1-513 29 39 14 BULGARIA Danos & Associates 28, Hristo Botev Boulevard Sofia Tel: +359-2-9532314 Fax: +359-2-9532399 CANADA Cresa Partners Tel: +1-612-767 12 78 Fax: +1-612-337 8459 CYPRUS Danos & Associates 35, I. Hatziosif Ave 2027, Nicosia Tel: +357-22 31 70 31 Fax: +357-22 31 70 11 GREECE Danos & Associates 1, Eratosthenous Str. 11635 Athens Tel: +30-210 7 567 567 Fax: +30-210 7 567 267 JAPAN RISA Partners 5F Akasaka Intercity 1-11-44 Akasaka, Minato-ku 107-0052 Tokyo Tel: +81-3-5573 8011 Fax: +81-3-5573 8012 NETHERLANDS Holland Realty Partners J.J. Viottastraat 33, 1071 JP Amsterdam, Tel: +31-20-305 97 20 Fax: +31-20-305 97 21 NORTHERN IRELAND Whelan Property Consultants 44 Upper Arthur Street Belfast Bt1 4GJ Tel: +44-28-9044 1000 Fax: +44-28-9033 2266 SLOVAKIA Modesta (Dr. Max Huber & Partner Group) Heydukova 12-14 811 08 Bratislava Tel: +421-2-3240 8888 Fax: +421-2-3214 4777 PORTUGAL Fenalu Av. Duarte Pacheco Empreendimentos das Amoreiras Torre 2, 14 - Sala H 1070-102 Lisbon Tel: +351-21-3833106 Fax: +351-21-3833107 RUSSIA Astera 10, b.2 Nikolskaya Str. Moscow, 109012 Tel/Fax: +7-495-925 00 05 SERBIA Danos & Associates 6, Vladimira Popovica Street Belgrade 11000 Tel: +381-11-2600 603 Fax: +381-11-2601 571 UKRAINE Astera 2a Konstantinovskaya Street 04071, Kiev Tel: +38-044-501 50 10 Fax: +38-044-501 50 11 USA Cresa Partners 200 State Street 13th Floor Boston, Massachusetts 02109 Tel: +1-612-767 12 78 Fax: +1-612-337 8459

INDIA
Bangalore 403, The Estate, 121, Dickenson Road, Bangalore - 560 042 Tel: +91 80 4050 8888 Fax: +91 80 4050 8899 Contact: Amit Porwal amit.porwal@asia.bnpparibas.com Mumbai 704, Level 7, MMTC House, C-22, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051 Tel: +91 22 6138 8088 Fax: +91 22 6138 8089 Contact: Sangram Tanwar sangram.tanwar@asia.bnpparibas.com Delhi Level 4, Wing B, Statesman House, Barakhamba Road, New Delhi - 110 001 Tel: +91 11 3044 6406 Fax: +91 11 3044 6507 Contact: Ankit Tyagi ankit.tyagi@asia.bnpparibas.com
For all corporate/central enquiries contact Tasneem Gandhi at +91 9930141009 or email at tasneem.gandhi@asia.bnpparibas.com

BAHRAIN Bahrain Financial Harbour West Tower 16th Floor P.O. Box 5253 Manama Tel: +971-505 573 055 Fax: +971-44 257 817 BELGIUM Blue Tower Avenue Louise 326 B14 Louizalaan 1050 Brussels Tel: +32-2-646 49 49 Fax: +32-2-646 46 50 DUBAI Emmar Square Building No. 1, 7th Floor P.O. Box 7233 Dubai, EAU Tel: +971-505 573 055 Fax: +971-44 257 817 FRANCE 13 boulevard du Fort de Vaux 75017 Paris Tel: +33-1-55 65 20 04 Fax: +33-1-55 65 20 00 GERMANY Goetheplatz 4 60311 Frankfurt Tel: +49-69-2 98 99 0 Fax: +49-69-29 29 14 IRELAND 40 Fitzwilliam Place Dublin 2 Tel: +353-1-66 11 233 Fax: +353-1-67 89 981 ITALY Corso Italia, 15/A 20122 Milan Tel: +39-02-58 33 141 Fax: +39-02-58 33 14 39

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