Indian Real Estate Charting a Global Course

The Essential Ecosystem for a Sustainable Future

 Advance - Indian Real Estate - Charting a Global Course

INFRASTRUCTURE

REGULATION

TRANSPARENCY

The past decade has witnessed a period of economic transformation of the Indian Real Estate Industry. After the Global Financial Crisis, the pace with which India bounced back as compared to the most other economies across the globe is nothing short of magnificent. The moot point to be debated now is what next? Given the state of the Real Estate Industry in India, are we well poised to leverage this quick recovery and ensure that in coming 5-7 years, this industry is at par with some of the best in matured markets like Asia Pacific and US? A comfortable ground that we are on today, does it allow us to strengthen our foundation and leapfrog ahead to be recognized as one of the best? India has started to receive similar accolades from around the world for various other industries. Are similar accolades for the India Real Estate industry just around the corner?

INVESTMENT

LAND
TECHNOLOGY AND INNOVATION

In this paper, we discuss the answer all the above questions by analysing the market forces that impact the dynamics of the Indian Real Estate Ecosystem. A typical real estate ecosystem comprises of different stakeholders that include architects, developers, government/regulatory authorities, banks, private equity players, other funding agencies, buyers, brokers, and property consultants. For any such ecosystem to remain successful over a long term, it is imperative that all its key industry participants are on a level playing ground despite the changing real estate dynamics. The dynamics in Indias real estate ecosystem is driven by Extrinsic and Intrinsic factors (Figure 1). While the extrinsic factors are those which impact the dynamics from outside the real estate ecosystem, the intrinsic factors are those which impact the dynamics of the ecosystem from within. With a vision to drive the transformation of the countrys real estate best practices to the next level, Confederation of Indian Industry (CII) and Jones Lang LaSalle (JLL), through this paper, aims at gaining perspective on factors that could turn India into a global Real Estate Powerhouse in the next decade.

AFFORDABILITY
SUSTAINABILITY

IMAGEABILITY

PROFESSIONALISM

Advance - Indian Real Estate - Charting a Global Course 

Figure 1: Indian Real Estate Ecosystem

Sustainability Transparency Imageability

Affordability

NT

R I N SI

Professionalism

INDIAN REAL ESTATE

Investment

XT

C RIN SI
Technology and Innovation

Land

Regulation Infrastructure

AFFORDABILITY

Build per the needs of the affordability pyramid Consider H + T affordability through Transit Oriented Development (TOD) Maintain office rents at less than a-dollar-psf to reap IT/ITeS dividends Improve transparency to ensure better quality products and services Synergise efforts towards a transparent system and harvest collective benefits Be responsible to the environment through resource optimisation to achieve sustainable goals Introduce sustainable concepts in each sector from green leases to green homes Establish unique imageability to compete as global destinations Revitalise city centres to improve efficiency and imageability of prime locations Manage real estate assets professionally to gain from global best practices Impart training to industry personnel for achieving higher quality of products and services Drive investment a key externality that cuts across all the other extrinsic factors Enact practical REIT and REMF regulations to make real estate an investable asset class Enhance sources of funding to real estate developers Regulate to introduce accountability within a national framework but having a local thrust Create a business friendly ecosystem to facilitate fair play and encourage industry stakeholders Streamline the procurement of land assets to reduce barriers of entry for new players Formulate policies and framework with emphasis on transparent transaction processes Develop infrastructure to ensure an inclusive growth Adopt global best practices customized to the local needs Innovate to benchmark real estate developments to global standards Use information technology extensively for planning in real estate

TRANSPARENCY SUSTAINABILITY IMAGEABILITY PROFESSIONALISM

INVESTMENT

REGULATION LAND INFRASTRUCTURE TECHNOLOGY AND INNOVATION

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

 Advance - Indian Real Estate - Charting a Global Course

Intrinsic Factors
Affordability Build per the needs of the affordability pyramid The income pyramid in India is heavy at the bottom, with over 60% of the households earning averagely less than INR 80,000 per year. Nearly 19% of the households (at the Bottom of the Pyramid) cant afford any type of housing through their income. Another 44.6% of the households in the Lower Middle Income Group cant afford a house in Tier I or II cities (Figure 2). Builders, architects and government have to plan real estate development, which conforms to the needs of the income pyramid of India.

Consider H + T affordability through Transit Oriented Development (TOD) Access to transit and proximity to daily destinations prevent the creation of low-density spread-out urban sprawls dependent on cars. Transit poor neighbourhoods lead to cities with traffic congestion, long commutes, air pollution, green house emissions and reduction in open spaces. Dense, transit-rich communities are location efficient because they connect residents to shopping, work, and recreation while limiting the strain on public infrastructure and natural resources.

Figure 2: Income Groups and Housing Affordability (Based on 2008-09 Income Levels) Income Groups Rich Higher-Middle Income Middle Income Lower-Middle Income - I Lower-Middle Income - II Bottom of Pyramid - I Bottom of Pyramid - II Households (Thousand) 2,424 35,382 48,434 48,853 55,942 27,462 16,665 (% Share) 1.0% 15.0% 20.6% 20.8% 23.8% 11.7% 7.1% Per Household Income in 2008-09 (INR) 1,021,825 309,950 134,729 79,335 50,085 32,692 18,851 Affordable Ticket Size for Housing (INR) 4,500,000 1,350,000 550,000 250,000 125,000 50,000 25,000
(Number of Households) 2.42 million

Rich

(Per household income in INR) 1,021,825

Higher-Middle Income

309,950

35.38 million

Middle Income

134,729

48.43 million

Lower-Middle Income - I

79,335

48.85 million

Lower-Middle Income - II

50,085

55.94 million

Bottom of Pyramid - I

32,692

27.46 million

Bottom of Pyramid - II

18,851

16.67 million

Source: Consumer Pyramids, Centre for Monitoring of Indian Economy (CMIE); Real Estate Intelligence Service (Jones Lang LaSalle)

Advance - Indian Real Estate - Charting a Global Course 

Figure 3: Residential Affordability Radar for Indian Cities Mumbai 80 70 60 50 40 30 20 10

Kolkata

Bangalore

Pune
INR 2,000-4,000 psf INR 4,000-6,000 psf

Distance from City Centre

Hyderabad

NCR

Chennai
INR 6,000-8,000 psf > INR 8,000 psf

Source: Real Estate Intelligence Service (Jones Lang LaSalle), 1Q11 Note: 1. The radar shows the average distance from the city centre at which a residential property would be priced at the given capital value ranges (See legend). 2. The city centres considered for the respective cities are as follows: Mumbai - Nariman Point; NCR - Connaught Place; Bangalore - MG Road; Chennai - Nungambakkam; Pune - Deccan Gymkhana; Hyderabad - Begumpet and Kolkata - Park Road.

Due to lack of available land parcels within the cities, suburbanization has accelerated in several metropolitan areas during the past decade. Several office, retail and residential developments have dotted the suburban landscape. Unaffordable land prices have resulted in leapfrogging of residential development to even suburbs of suburbs or exurbs. By 2012, 60% of the operational office space in the metropolitan cities will be at suburban locations. The retail market has been suburbanized earlier than office, with more than 50% of the operational retail space at suburban locations since 2004. The residential construction activity is even more skewed in the metropolitan cities, with over 95% of the housing projects being constructed at suburban locations. With rapidly expanding city limits due to increased suburbanisation of Indian cities, the focus of affordability should not only consider the market value of the products, but also the travel costs to the workplaces, retail and recreational centres.

Housing and transportation affordability (H+T Affordability) involves a more holistic approach of assessing the utility of a product to the buyer through not only the intrinsic value in terms of size of apartment, property rate and amenities provided but also the linkage value such as accessibility to workplaces. Transit oriented developments involve a mix of land uses, including commercial offices, residential and community amenities such as schools, hospitals and parks. They are integrated with a well developed rail transit network to discourage proliferation of cars. Maintain office rents at less than a-dollar-psf to reap IT/ITeS dividends The emergence of information technology industry in India during the past two decades has contributed significantly to the growth of real estate in several top metropolitan cities in India. Several concessions from the government under the ambit of Software Technology Parks of India (STPI)

 Advance - Indian Real Estate - Charting a Global Course

and Special Economic Zone (SEZ) facilitated this growth in the past. Nearly 50% of the transactions of investment grade office space are done by IT/ITeS companies. While IT/ITeS industry has necessitated higher grades of construction, it has benefited due to the affordable rents offered at several Tier I cities of India. Over 60% of the operational investment grade offices in top seven cities currently provide space at a lease rental of less than a-dollar-per sq ft per month (or less than INR 45 psf pm), primarily in secondary and suburban locations. These locations offer large land parcels that are ideal for the development of IT/ITeS campuses (Figure 4). With tax benefits to IT/ITeS industry ending in the coming years, the firms shall deviate to cost effective locations. If Indian real estate has to reap the dividend of the IT/ITeS industry in the future, it should maintain the dollar-psf rents for arbitrage against other competing locations in Indonesia, China and Philippines. Figure 4: Micro-Markets in India Offering Office Space at INR 25-55 psf pm (As of 1Q11)
35 SBD Bangalore

Transparency Improve transparency to ensure better quality products and services Is Real Estate in India a market of lemons1? In information-inefficient markets, sellers tend to sell lemons to buyers, who have lesser knowledge of the goods than the sellers. This has an adverse impact on the industry, as the incentive to produce a higher quality of product is reduced. On the other hand, high levels of transparency make it conducive for buyers to understand the pros and cons of a specific project and accordingly make investment decisions. This in turn facilitates an increase in foreign direct investment a powerful incentive for encouraging the free flow of information along with the fair and consistent application of local property laws. Transparency of Indias real estate markets has been gradually improving and is largely

30

25 Stock As of 1Q11 (mn sf)

Suburbs Chennai Whitefield Hitec City NH-8 Gurgaon SBD Chennai SBD Pune Thane & Navi Mumbai

20

15

10

Noida

Suburbs Pune 5 -

50

100

150 Gross Rental Values (INR psf pm)

200

250

300

Source: Real Estate Intelligence Service (Jones Lang LaSalle), 1Q11 Note: Each dot represents a micro-market among the top seven cities of India.
1

The Market for Lemons: Quality Uncertainty and the Market Mechanism is a 1970 paper by the economist George Akerlof. It discusses information asymmetry, which occurs when the seller knows more about a product than the buyer. Lemons in popular parlance are those sub-standard products which are passed by sellers as good ones.

Advance - Indian Real Estate - Charting a Global Course 

driven by improvements in data availability on market fundamentals, the regulatory and legal environment, as well as governance of listed entities (Figure 5). The increasing presence of international real estate developers, investors and occupiers especially in the Tier II and Tier III cities has acted as a catalyst for the increase in transparency outside the Tier I cities. Data on office market fundamentals is now more comprehensive in the Tier II cities such as Hyderabad, Pune and Kolkata, as they develop into IT/ITES and manufacturing hubs. Data availability for the retail and residential sectors has improved across all tiers due to the rapid development of the residential sector and modern retail formats. However, when compared to the other countries in the Asia-Pacific, Indian cities fall in the category of being semi-transparent. They rank differentially on various parameters of real estate transparency. Figure 5: Transparency of Indian Cities by Tier

Synergise efforts towards a transparent system and harvest collective benefits Transparency is the key to improve efficiencies in the system, which benefits all stakeholders, particularly buyers. While developers should avoid misrepresentation and unfair practices, government needs to be unbiased and participative (Figure 6). Appropriate indices to measure market fundamentals and performance is a key indicator of market transparency. There is an absence of national indices on real estate sectors, due to lack of market data. Some international property consultants, online real estate portals and government authorities such as National Housing Bank have begun providing real estate market data, which is improving this facet of real estate transparency. However, available data has a grade bias which results in the performance

Composite I 1 II III I

Performance Management II III

Market Fundamentals I II III

Listed Vehicles I II III I

Legal & Regulatory II III I

Transaction Process II III

INCREASING TRANSPARENCY

5
Source: Global Real Estate Transparency Index 2010, Jones Lang LaSalle Note: Tier I cities Mumbai, Delhi, Bangalore and Chennai. Tier II cities Hyderabad, Kolkata and Pune. Tier III cities 30 other prominent Indian cities

 Advance - Indian Real Estate - Charting a Global Course

and fundamentals of investment grade assets being reported. Also, there is a tier bias since there is relatively more transparency in the tier I and II markets and lesser in tier III cities. The transparency also differs by sectors as residential market has relatively more transparency, when compared to office and retail transactions. Real estate sector in India is subject to multiple taxes such as corporate tax, service tax, minimum alternate tax, value added tax, stamp duty, property tax etc. Although there is transparency in terms of the enactment of legislations, certain key areas such as evaluation of property tax is a significant concern as reliable and easy methods of its calculation is not available. Also, there have

been certain disputes in the taxes being levied onto real estate developers and buyers. Moreover, such regulations also differ between states. With the possible introduction of a single uniform GST (Goods and Services Tax) in FY 2011-2012, several of these issues pertaining to multiplicity of taxes and even double taxation will be resolved. The payment of unaccounted and protection money is also a key lacunae in the transaction process. There are legislations to regulate foreign investment in the sector, which are progressively being relaxed to cater to the increased demands for funding in the sector.

Figure 6: Role of Stakeholders in a Transparent Ecosystem

Products Proper representation of product quality, area, amenities, location, efficiency and other project characteristics that influence buying decision. Services Provide information regarding project progress, approvals, registration and transfer processes and maintenance. Performance Reporting Report correct performance of the project in terms of sales and construction. Approvals and Taxation Streamlined and transparent approval process to reduce project costs. Formulate effective simple taxation rules to avoid double taxation. Redressal Mechanisms Setup an effective grievance redressal mechanism for all interested stakeholders. Transaction Records Make transaction records available for a transparent information flow to buyers and investors. Development Plans Ensure civil participation in development plans to address concerns and requirements of citizens.

GO

PE

RS

VE

LO

RN

VE

ME

DE

NT

REAL ESTATE TRANSPARENCY

Services Provide an objective and unbiased service to buyers and developers. Accounted Purchases Should purchase real estate through accounted means

Cost of Funding Maintain the right cost of funding to buyers and developers to ensure smooth completion of real estate projects.

Credibility Reporting Report credibility ratings of developers and buyers to reduce transaction risks

Reporting Report income and taxes on properties accurately, following laws and regulations

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

BU ES

YE R EN CI

Information Seeking and Distribution Seek information through multiple sources and relay right information to other interested parties

S AG

FI NA NC IN G

Advance - Indian Real Estate - Charting a Global Course 

Sustainability Be responsible to the environment through resource optimisation to achieve sustainable goals According to an analysis done by Ernest Orlando Lawrence Berkeley National Laboratory, electricity consumption in India is expected to increase fast, driven by the demand of the residential and commercial sectors that add to the already increasing demand from the industrial sectors. The residential sector will contribute nearly 48% of the projected electricity consumption in India in 2020, increasing from 33% recorded during 2005 (Figure 7). Per household electricity consumption is likely to quadruple in the 20 years between 2000 and 2020. Services, which includes office, retail and hospitality industry is projected to contribute nearly 13% of the total electricity consumption in 2020. Rising energy needs in India have made sustainability in real estate an imperative necessity rather than an option. Indias green real estate footprint has been growing exponentially from 0.02 million sq ft in 2004 to over 23 million sq ft of green space operational in various cities of India in 2009. However, this growth is not homogeneous across the country. The top seven cities Chennai, Mumbai, Hyderabad, NCR, Bangalore, Pune and Kolkata are ahead in the race towards a greener footprint (Figure 8). India currently has two major rating systems for energy efficiency in building design LEED India, managed by the Indian Green Building Council (IGBC); and Green Rating for Integrated Habitat Assessment (GRIHA), a system developed by The Energy and Research Institute (TERI) and the Ministry of New and Renewable Energy (MNRE). The GRIHA rating system is gradually strengthening its presence along with the more popular LEED India. By April 2011, five projects have been rated by GRIHA and 108 projects across industrial, commercial and residential sectors are registered and being evaluated. Apart from the rating systems being put in place,

Government of India has initiated certain steps towards a sustainability led industry. The Bureau of Indian Standards (BIS) has developed the Energy Conservation Building Code (ECBC), which specifies the energy performance requirements for all commercial buildings that are to be constructed in India. Government of India has proposed to lead by example and develop all public buildings Figure 7: Projected Electricity Consumption in India in 2020: Real Estate Industry will be a Major Contributor
Services, 13% Agricultural Pumping, 1% Residential Fans, 7% Other Industries, 15% Residential Television, 3% Residential Refrigeration, 5%

Ammonia, 1% Aluminium, 3% Cement, 1% Steel, 7% Public Transport, 1% Freight Transport, 1%

Residential Other Appliances, 17%

Residential Lighting, 16%

Source: India Energy Outlook: End Use Demand in India to 2020, Ernest Orlando Lawrence Berkeley National Laboratory, January 2009

Figure 8: Number of LEED Certified and Pre-Certified Projects (As of 2010)

Others, 18 Bhubaneshwar, 2 Kochi, 2 Sriperumbudur, 3 Kolkata, 7 Mumbai Metropolitan Region, 19 Chennai, 26

Pune, 10

Bangalore, 11 National Capital Region (Delhi), 13

Hyderabad, 15

Source: Indian Green Building Council (IGBC), December 2010 Note: The number of projects includes New Construction, Core and Shell, Existing Buildings & Green Homes but excludes Commercial Interior Projects

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Inclusion of mandatory sustainable norms and directives in the development control regulations will ensure the development of low energy city envelopes. Since the largest contributor to the demand for electricity in India is the residential sector, it is imperative that both government and builders focus on building a sustainable housing sector, banking on low energy needs.

constructed in future as energy efficient spaces. Government of Maharashtra is considering the proposal to provide both financial and nonfinancial incentives including higher Floor Space Index, reduction in consent fee, rationalization of property tax and reduction in state taxes including VAT and Octroi and other incentives, for the development of green projects in the state. Apart from Maharashtra, several state governments are planning to develop their own green building byelaws. Builders commitment to respond to the initiatives taken by the government would lead to inclusion of more green buildings to their portfolio. Also, they are becoming active participants in guiding the government towards the enactment of these byelaws, since they have a better understanding of the ground realities. Introduce sustainable concepts in each sector from green leases to green homes A sustainable lease, often referred to as a green lease is any lease that has a sustainability outcome built into it. This can include criteria around energy, waste and water. The introduction of these sustainability criteria does not replace the need to consider the implications of the base lease clauses. Essentially, the green lease schedule reflects the parties desire to improve and be accountable for sustainability in the building. A sustainable lease meets the unique objectives and challenges faced for every individual situation reflecting the profile of the building, current building performance, willingness of parties to share savings in outgoings and the intended use of the space. Inclusion of mandatory sustainable norms and directives in the development control regulations will ensure the development of low energy city envelopes. Since the largest contributor to the demand for electricity in India is the residential sector, it is imperative that both government and builders focus on building a sustainable housing sector, banking on low energy needs. Indian Green Building Council (IGBC) recently rolled out

Green Homes, which is its first rating programme, exclusively for the residential sector. Also, the IGBC Green Townships Rating System, a pilot version of which has been launched, should be beneficial at a larger scale for certifying residential townships. Imageability Establish unique imageability to compete as global destinations In his most important work, The Image of the City published in 1960, Kevin Lynch has studied how users perceive and organize spatial information as they navigate through cities. According to Lynch, city dwellers and visitors form mental maps with five elements: Paths, the streets, sidewalks, trails, and other channels in which people travel; Edges, perceived boundaries such as walls, buildings, and shorelines; Districts, relatively large sections of the city distinguished by some identity or character; Nodes, focal points, intersections or loci; Landmarks, readily identifiable objects which serve as external reference points. From Vastu to Vistas, Indian architecture has come a long way in amalgamating styles and grammar into its urban fabric. However, there is a serious imageability crisis in the Indian cities, due to near absence of implementation of guidelines, if any. While Indian cities are progressing in terms of nodes and landmarks due to iconic construction happening at places, paths, edges and districts require the attention of planners and designers. Instead of following global architectural styles, some of which are probably not appropriate for Indian cities due to different climatic conditions, materials of construction and cultural or aesthetic considerations of the local city, designers should architect an Indian image, which will create a unique branding of the urban fabric. Early examples of urban branding in India are the cities of Jaipur, Jodhpur and Udaipur (all in Rajasthan) in India, which follow distinct urban

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design considerations, in their old cities. While Jaipur is known as the Pink city due to the color of its avenues, Jodhpur is known as the Blue city due to the walls of the houses around the fort. Udaipur, which is among the favourite tourist destinations of India, is known as the city of lakes and palaces. While traditional in nature, the architecture of these cities conjures the image of erstwhile kingdoms as well as the arid conditions of west India. Chandigarh, arguably the most planned city in India, reflects the grandeur of governance in its public architecture, while infusing a humane branding to its roads, residences and campuses. Urban branding strategies are vital for Attracting inward investments and international venture capital Attracting and retaining companies Attracting and retaining skilled knowledge workers Attracting new citizens Promoting tourism Sales and marketing of local goods and services Inward branding is concerned with identity building and strengthening the pride of the residents living in a place, thus creating an attractive environment with the ability to maintain its residents and business and in the long run also attract new

citizens, tourists and business. Outward branding on the other hand is concerned with external communication and is directly related to attracting investments, knowledge workers, visitors and tourists to a place. Outward branding aims to help support the sales and marketing potential of goods and services produced in the local area. Adapted from Image of the City (2006) by Johan Johnson and Dominic Power Despite the lack of urban imageability, Indian cities have attained a brand status due to the nature of their functions and policies (Figure 9). Further focus is required to strengthen and diversify branding. Revitalise city centres to improve efficiency and imageability of prime locations Most of the Indian metropolitans are facing an urban design crisis with buildings and architecture at prime locations in these cities (closer to the city centre) in a decrepit state. Since these buildings and associated infrastructure were planned and built decades ago and had minimal upgradation over the years, they fail to meet the global Grade A standards of real estate. Lacking features of sustainability, there are higher costs of operations and maintenance of these premises as well. Despite this, they are much sought after by tenants due to their prime location and excellent

Figure 9: Major Indian Cities and their Urban Branding Due to Functions Cities Mumbai New Delhi Bangalore Chennai Hyderabad Gurgaon Noida Kolkata Pune Ahmedabad Chandigarh Coimbatore Urban Branding Financial and Entertainment Capital Political Capital Silicon Valley of India Established IT Hub & Detroit of India Established IT Hub Established IT & Industrial Hub Established IT Hub Gateway to the East Established IT & Automotive Hub Commercial Hub in the West Emerging IT Hub Emerging Industrial & IT Hub Cities Bhubaneswar Guwahati Jamshedpur Ludhiana Nashik Patna Kochi Nagpur Indore Jaipur Surat Vishakhapatnam Urban Branding Emerging IT Hub Education Hub Industrial Hub Industrial Hub Emerging Industrial Hub Emerging Education & Agricultural Hub Emerging IT Hub Education Hub Commercial and Industrial Hub Tourism Hotspot Diamond Capital of India Emerging IT & Logistics Hub

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

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The tide is turning as buildings in newer locations are providing better grade premises, amenities and infrastructure to the tenants.There is a need for an urban renaissance in the coming decade in which massive investment is required to upgrade the internal infrastructure of the cities, as well as revitalize the existing buildings.

tenancy. Common problems in old office building stock at the city centres include Deteriorated facades Poorly maintained common areas such as lobbies and corridors Lack of 24/7 power back up and centralised air conditioning Outdated staircases and lifts/elevators, and a lack of efficient mechanisms for modification of the same Lack of new technology for building safety and security Poor mechanisms for energy efficiency However, the tide is turning as buildings in newer locations are providing better grade premises, amenities and infrastructure to the tenants2. There is a need for an urban renaissance in the coming decade in which massive investment is required to upgrade the internal infrastructure of the cities, as well as revitalize the existing buildings. The role of architects and designers assumes significance due to the heritage importance of these districts. Several buildings were built during the colonial period, which add to the imageability of the city. Since most of these redevelopment or retrofitting projects will be infill developments3, a localisation of concepts including form, function and sustainability is required to preserve the character of the area, and harmonise with and complement the existing streetscape rather than compete with it. This sympathetic infill is vital in providing an imageability to Indian cities, which is lacking and prevents them from attaining a global standard. Professionalism Manage real estate assets professionally - to gain from global best practices Professional management of real estate encompasses a gamut of services including positioning, zoning, promotions and marketing, facility management and finance management. While this will result in better services being provided to occupiers, a direct benefit would
2 3

be in reducing operational costs. Several shopping centres and offices have begun availing professional management services for their operations; in view of maintaining the long term viability and success of the asset. International property consultants bring global best practices for the optimization of maintenance costs, which can typically be achieved by Adoption of efficient planning strategies for achieving the optimal level of future costs and expenses Optimizing the actual costs incurred for the maintenance of the property Ensuring the long-term viability of the asset and income stream associated with it. Impart training to industry personnel for achieving higher quality of products and services With a large unorganised network of real estate brokers, construction workers and other intermediaries in the industry, there is a need for focused training and certification programs for their skill upgradation. Government of India recognises this need and has formed the National Skill Development Corporation (NSDC), whose objective is to contribute significantly to the overall target of skilling / upskilling 500 million people in India by 2022, mainly by fostering private sector initiatives in skill development programmes and providing viability gap funding. Real estate is one of the 22 focus sectors identified under NSDC. According to the NSDC report prepared by ICRA Management Consulting Services, nearly 25 million people shall be employed in the real estate sector in 2022, with the incremental human resource requirement between 2008 and 2022 to be 14 million. The report further observed that substantial skill building is required at the skilled workforce level to build capacity. This would stem from modular courses of anywhere between 3 months to 8 months duration in areas such as carpentry, plumbing, operations, and other occupations. It

Retrofitting Indias Central Business Districts, Jones Lang LaSalle, March 2011. Infill development is the development of a building among other old buildings with heritage value and character in an established streetscape.

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is also required to examine models in which such skills can be delivered to the skilled and minimally educated workforce near the construction sites. Estate agents and real estate brokers are a vital component of the real estate industry. However, Figure 10: Typical Real Estate Project Lifespan and Corresponding Property and Asset Management Value Adds

India lacks a national association which can provide certified licenses for real estate broking and regulate their conduct through education and ethics. This has resulted in an unregulated and unorganised sector, which leads to high search time and costs for the buyer. Project Life Cycle
PLANNING Project feasibility, land procurement, finalizing project brief, consultants, budgeting, financial modeling DESIGN Layout can be improved to prevent additional expenditure at later stages

Property & Asset Management Value Add

Operations stage expenditure can be predicted to accurately define feasibility

PLANNING DESIGN

Finalizing spatial layout, construction materials, development phases PRE CONSTRUCTION PRE CONSTRUCTION Tendering, site preparation, sales, promotion, advertising, brand building CONSTRUCTION CONSTRUCTION Onsite erection of the building structure, from excavation to internal finishes, tendering of maintenance contracts, selection of equipment PHASED OCCUPANCY MAINTENANCE Provisioning for ancillary services, security, etc MAINTENANCE Asset optimization through maintenance of equipment, facility & infrastructure and rent collection

Efficient property management can be a significant marketing USP

Benchmarking of equipment and operations costs along with generating tendering documentation for vendors

PHASED OCCUPANCY

Property will be maintained efficiently to the satisfaction of the client/tenants Reports are generated periodically and analysed to attain operational cost optimisation, inventory control and efficient vendor management Re-assessment of existing infrastructure Renovation & capital expenditure planning

RENOVATIONS RENOVATION Additions & alteration in the building & infrastructure along with improvement in management techniques

Source: Property and Asset Management, Jones Lang LaSalle, 2009

RENOVATION MANAGEMENT

POST - OCCUPANCY MANAGEMENT

Supporting transitioning of the project including commissioning of equipment

PRE - OCCUPANCY MANAGEMENT

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Extrinsic Factors
Investment Drive investment a key externality that cuts across all the other extrinsic factors The market value4 of investment grade real estate assets under construction across the three sectors of office, retail and residential in India is more than USD 100 billion. This fact reiterates the importance of investment in to real estate sector in order to ensure timely completions of the projects which are currently under construction. A sustained capital flow through multiple channels including foreign players, local funding agencies/ banks, and internal accruals of the developers is of prime importance to ensure growth of real estate sector in India. Investment, both at a project level as well as at a market level is imperative for a sustained growth of real estate sector. Investment leading to capital infusion can be done either directly or indirectly into the real estate ecosystem (Figure 11). While direct investments include those initiatives leading to money flow directly towards development of a particular real estate asset, the indirect investments are those that involve capital infusion towards developments that are external to the real estate asset but yet have a significant impact on marketability of the same. Investment in Indias real estate market is further driven by multiple factors which are listed below: Growing disposable incomes of along with favourable demographics leading to diverse real estate demand calls for niche / unique investment strategy from a developers point of view. Increased focus on both traditional manufacturing sectors as well sunshine services sectors positions India as one of the fast emerging economies with multiple economic drivers resulting in need of improved thrust on investment in to real estate. Rapid urbanization rate in India, lack of availability of land within the city limits and rise in number of nuclear families leading to fall in density per household would result in investment in the form of geographical expansion of cities and product innovation
4 Retrofitting Indias Central Business Districts, Jones Lang LaSalle, March 2011.

especially in terms of residential offerings in the market. Need for global infrastructure standards which would act as a key enabler for development of new satellite towns and transformation of the same in to business epicentres. Enact practical REIT and REMF regulations to make real estate an investable asset class Real Estate Mutual Funds In 2008, SEBI (the apex regulatory body in India for the securities markets) approved the guidelines for real estate mutual funds (REMFs). As per the guidelines, all the schemes having an objective to invest directly or indirectly in real estate assets or other permissible assets are governed by the provisions and guidelines under Securities and Exchange Board of India (Mutual Funds) Regulations 1996. Figure 11: Direct and Indirect Investment into Real Estate Direct Investment (Project/Company Level) Foreign Direct Investments Private Equity Investments Bank Credits REITs / REMFs Indirect Investment (Market Level) Urban Infrastructure (JNNURM Scheme) Public Private Partnership Models Investment in Technology and Innovation Investment in Training and Skill Development

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

The key features of the guidelines are as follows: REMFs shall be closed end funds and its units shall be listed on a recognised stock exchange. The net asset value (NAV) shall be declared at the close of each business day. Title deeds pertaining to the real estate assets shall be kept in safe custody with the custodian of the REMF. No lending or housing finance activities should be taken up by REMFs. The investments by an REMF are to be made in the prescribed ratios among real estate assets, mortgage backed securities (but not in mortgages), equity shares or debentures of companies (whether listed or not) engaged in dealing in real estate assets or in undertaking real estate development projects and other securities. They must invest at least 35 percent of net assets in completed properties and at least 75 percent of net assets directly in real estate assets, equity shares, or debentures of real estate companies engaged in real estate development, whether listed or unlisted. Real estate assets may be let out or leased out if the term of such lease or letting does not extend beyond the period of maturity of the REMF. Real Estate Investment Trusts Under the draft Real Estate Investment Trust (REIT) regulations, a REIT is defined as a trust registered under the

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Indian Trusts Act, 1882, and registered with SEBI, whose objective is to organize, operate, and manage real estate collective investments. It is similar to REMFs in structure, except for a few significant differences: REITs can invest in income generating real estate but can acquire real estate under construction as long as the value does not exceed 20 percent of the total NAV. REITs must distribute at least 90 percent of their annual net income after tax to unitholders and leverage cannot exceed 20 percent of gross assets. REITs and REMFs would demand a greater transparency from the real estate developers, for appropriate and periodic valuation of assets and investment decisions, in turn assuring a higher transparency to the investor. The major challenges to enactment of REIT and REMF legislations in India is the issue over clarity of taxation and high real estate transaction costs in India. Government should expedite these legislations to bring more investment into real estate, as well as increase transparency in the sector. Enhance sources of funding to real estate developers Several developers are currently grappling with funding issues for their ongoing projects, resulting in execution delays. A concerted effort is required to enhance sources of funding to real estate developers. Reduce bank provisioning for lending to real estate Reserve Bank of India (RBI) has increased provisioning for lending to real estate, which has adversely affected the availability of bank funds for massive amounts of real estate construction happening in the country. Authorities should look into reducing the provisioning for a smoother and timely execution of realty projects. Provide infrastructure status to housing The Insurance Regulatory and Development Authority (IRDA) regulations mandate insurance companies to invest up to 15% in the social and infrastructure
5

sector. If the housing sector is granted infrastructure status, it could benefit from greater access to long-term finance5. Relax Foreign Direct Investment (FDI) norms By lowering the minimum area requirements, especially for Tier I cities, where land is not available in plenty, more real estate projects can garner funding through Foreign Direct Investment (FDI). Also, early exits should be allowed in cases where either the project has been completed or is uninitiated due to lack of statutory clearances. Regulation Regulate to introduce accountability within a national framework but having a local thrust The Indian real estate market has taken a paradigm shift towards a much organized future as compared to a couple of decades ago. India has witnessed multi-fold growth of real estate sectors across varied asset classes such as office, retail and residential in the past decade underpinned by a healthy economic growth in the country. Further, the rising inflow of global capital in to the Indian real estate ecosystem calls for a much transparent and liquid ways to invest. As a result, the property firms in India are strategizing towards strengthening their operational infrastructure, personnel, and financial practices to be at part with global standards. While the industry participants are the key to ensure fair business practices of their respective firms, it is important for the government to roll out the regulatory policies through a national structured framework which enforced at a state or city level. Governments move to introduce market regulator for the real estate market could lead to the following advantages to the countrys real estate ecosystem: Effective single window clearances of approvals leading to cost and time advantages to all the key stakeholders of the industry. Technologically advanced, e-Governance mechanisms to reduce barriers of entry for new developers Rationalised stamp duty rates across states through uniform stamp duty policy. Clear classification of real estate property as either a product or a service to avoid double taxation regime which in turn would result in realistic price points to the buyers. Structured bank provisioning for lending to

While the industry participants are the key to ensure fair business practices of their respective firms, it is important for the government to roll out the regulatory policies through a national structured framework which enforced at a state or city level.

Realty Decoded Investing Across Borders, Ernst & Young & FICCI, 2010

16 Advance - Indian Real Estate - Charting a Global Course

developers to ensure timely execution of real estate projects. Deeming the real estate sector with infrastructure status to ensure greater access to long term finance. Relaxation of the foreign direct investment (FDI) norms to ensure qualification of more projects for foreign investments primarily in the larger cities of India where the availability of land is scarce. Streamlined procedures to relax the provisions of real estate investment trusts (REITs) and Real Estate Mutual Funds (REMFs) would result in adequate funding opportunities for real estate developments in India.

estate, infrastructure and public services is rapidly increasing. India, a country where the availability of land is scarce, is no exception to the above trend. Lack of availability of land parcels in major Indias cities has led to the prices within the city limits to touch record levels in the past five years. This in turn has driven geographical expansion of cities in to the suburbs and suburbs of suburbs or exurbs. Land acquisition being the first step towards any real estate development, it is of prime importance to have a streamlined and transparent land procurement process. While still there are risks involved in buying land in India, the investment landscape in the country has significantly improved in the recent past. The additional issues that owners and investors in land have to concern themselves with are those pertaining to ownership titles, clarity of permitted use and fairness of governmental bodies when land is repossessed for the greater public good. These risk elements, while particular to the stakeholders of land, are by no means particular to India. Although developing nations are often considered to offer an environment of greater risk in regard to these elements relative to more developed nations, it is interesting to note the improvement that India has made in this area.

Land

Streamline the procurement of land assets to reduce barriers of entry for new players Land is one of the vital and indispensable components of any real estate development. Throughout the world, as economies and populations grow, the consumption of land for real Figure 12: Model Real Estate (Regulation of Development) Bill Need for Enforcement: The regulation of activities of property developers and builders in India is a state subject and comes under the purview of the respective state governments, urban local bodies (ULBs) and development authorities, under the provisions of State Town and Country Planning or City Development Authority Acts. This has led to inconsistency, vis-a-vis rules and regulations being followed in governing, constructing, purchasing, transferring and leasing of properties across the country. Proposal: The Model Real Estate Regulation Bill proposes to establish a regulatory authority and appellate tribunal to regulate, control and promote real estate construction, keeping in view the interest of the buyer and enable smooth and speedy construction. All properties being developed on land greater than 1,000 sq m or have proposed number of residential units greater than four shall come under the purview of the act and shall be registered with the regulatory authority. All details regarding the property shall be maintained on a website and the promoter of the project shall be responsible for recording and entering the project details within a stipulated timeframe.
Source: Draft of Model Real Estate (Regulation of Development) Bill; Real Estate Intelligence Service (Jones Lang LaSalle)

Infrastructure

Develop infrastructure to ensure an inclusive growth Infrastructure development, a key enabler of real estate growth, is one of the most critical drivers of demand for real estate as it allows for geographic expansion of cities. Major infrastructure initiatives that are particularly effective in this regard include improved connectivity through road, rail and air networks, as well as the sustained availability of power and water. According to Goldman Sachs, India will need to spend more than $1 trillion on infrastructure from 2010 to 2019, with roads requiring $427 billion, power $288 billion and railways $281 billion. Indias investment in infrastructure is expected to be around 10% of GDP at the end of 20082012 Five Year Plan, as compared to the 7.5% of GDP invested in the previous plan. While there are numerous infrastructure initiatives proposed by the Indian government, we have highlighted few of the major ones both at a country and city level (Figure 14).

Figure 13: Risk Elements for Land Owners & Investors Comprehending the land title documents Complications and lack if clarity in title deeds when it comes to strata title properties Lack of information on loans, liens and easements Encroachment hassles and lack of title insurance

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

Advance - Indian Real Estate - Charting a Global Course 17

Figure 14: Notable Central and State Infrastructure Initiatives in India

City Initiative Jawaharlal Nehru National Urban Renewal Mission (JNNURM) National Highways Development Project (NHDP) Delhi Metro NCR T3 International Airport Terminal Mumbai Urban Transport Project (MUTP) Mumbai Metro Rail Project Bangalore Metro Rail Peripheral Ring Road (PRR) Second Master Plan (SMP) Chennai Metro Comments This initiative is primarily to encourage reforms and fast track planned developments in select cities. The mission is to speed the infrastructure initiatives and to ensure that the gaps in funding for the same are filled. Other initiatives that this mission is expected to drive would include, provision of basic services to the urban poor including security of tenure at affordable prices, improved housing, water supply and sanitation, and ensuring delivery of other existing universal services of the government for education, health and social security. National Highways Authority of India commissioned the Golden Quadrilateral project to connect the four metros (Delhi, Mumbai, Kolkata and Chennai). The project is under progress and is aimed at minimizing the travel time and casualties on the road. With over 98% of the 5,846 km expressway project completed, the entire project is expected to be fully operational in the near term. The recent announcement of road transport and housing ministry to increase the per day construction of roads from 9 km to 20 km is expected to speed up the Indian road infrastructure in the long run. Initiated with the objective of improving connectivity and combat increasing traffic situation in Delhi city, the Delhi Metro has spread its wings to the suburbs of Gurgaon and Noida as well. It has now interconnected various parts of Delhi as well as its suburbs and has eased traffic situation and contributed to local public transport to a great extent. The newly made terminal of the International Airport claims to be one of the largest airports in Asia with highly increased passenger capacity and state of the art facilities. Equipped with a dedicated express metro line with check in facility at metro stations and soon to be integrated domestic and international flight operations, the new terminal will give an edge to Delhis air travel. This is a multi modal project initiated by Mumbai Metropolitan Region Development Authority (MMRDA) to bring about improvement in traffic and transportation situation in the MMR. MUTP envisages investment in suburban railway projects, local bus transport, new roads, bridges, pedestrian subways and traffic management activities. Aimed at improving the traffic and transportation scenario in Mumbai, Government of Maharashtra (GoM) has commenced the Metro Rail Project in Mumbai. This is the first MRTS project in India being implemented on Public Private Partnership (PPP) format and is envisaged in three phases expected to be completed by 2021. Currently fist phase of the project connecting Versova to Ghatkopar is under construction and expected to become operational by end 2011. Owing to a rise in traffic congestion in Bangalore roads, the Government of Karnataka has initiated the metro rail project which will connect the North-South and East-West parts of the city. Development of the Metro Rail Corridor is expected to drive the real estate market along the Metro Rail alignment on the EastWest and NorthSouth corridor of the city. The Peripheral Ring Road is a 116-km stretch connecting the city with the periphery. About 11.5 km away from the outer ring road, the PRR will connect Tumkur Road, Magadi Road, Mysore Road, Bellary Road, Old Madras Road, Hosur Road and Kanakapura Road. With a vision to decongest the Chennai city and decentralize central business district, the Chennai Metropolitan Development Authority (CMDA) has unveiled the Vision 2026 in the second master plan. It is aimed at strengthening the potential for growth in the three satellite towns of Gummidipoondi, Thiruvallur and Maraimalai Nagar and creation of new ones near Thiruporur and near Sriperumbudur. Aimed at easing the connectivity and traffic flow between the city centre and the fast emerging suburbs of the city, Chennai Metro Rail work is under progress and is expected to become operational in phases in the next five to ten years.

Chennai Hyderabad

Bangalore

Mumbai

India

This is a special purpose vehicle formed by the GoAP for the development of Outer Ring Road at an estimated cost of INR 3,000 Hyderabad Crores. While the phase I of the project connecting the 22 km stretch connecting Gachibowli to Shamshabad is operational, Growth Corridor the 140 KM stretch in the phase II to connect Narsingi, Kollur, Patancheru, Medchal, Shamirpet, Peddamberpet, Turkayamanjil, Limited Tukkuguda and Shamshabad is under construction. Hyderabad Metro Rail Kolkata EastWest Metro Phase I of the metro rail project includes 3 lines covering a distance of around 71 km. The ground work on the project is expected to commence by early January 2011 and the entire project is expected to be completed in five years EastWest corridor of Kolkata metro rail system is aimed at connecting howrah to salt lake sector V. The improvement in connectivity in this corridor is expected to drive the real estate developments along this corridor. The metro rail alignment is expected to go under ground (8 km) as well on an elevated corridor (13.7 km).

Kolkata Pune

Joka-BBD Bagh The foundation for the project was laid during September 2010. The 17-km stretch will be built at an estimated cost of more than Metro Rail Rs 2,600 crore will connect Joka in South-24 Parganas district to BBD Bagh, the central business district of the metropolis, and Expansion help decongesting the arterial Diamond Harbour Road. Proposed Metro line for Pune is implemented in 2 phases. While the phase I is expected to connect PCMC to Swargate (Metro Pune Metro Rail Line 1-16.5 Kms), PMC Depot (Kothrud) to Ramvadi (Metro Line 2-14 Kms), the phase II is designed to link ASI to Hinjewadi (18 Connectivity Kms.). Outer Ring Road To avoid traffic congestion in the city the local muncipal corporation has planned a ring road for Pune city that will divert the traffic of heavy duty vehicles. The length of the ring road is 169 Kms and is divided in to 4 parts, Part 1 is from Theurphata to Chimbli (38 Kms), Part 2 is from Chimboli to Pirangut (46 Kms), Part 3 is from Pirangut to Shriramnagar; Part 4 is from Gogalwadi to Theurphata. While the part 1, part 2 and part 4 is complete, the part 3 is under implementation.

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

18 Advance - Indian Real Estate - Charting a Global Course

Technology and Innovation Innovate to benchmark real estate developments to global standards Developing suitably priced real estate assets depends a lot on effective planning and scheduling of various project timelines along with a prompt delivery. As the rates of raw materials such as steel, cement and other building materials like tiles and fit-outs continue to fluctuate depending on the demandsupply situation in the commodities market and the overall macroeconomic weather; these can impact the delivery schedule of projects. Therefore, it is highly imperative for developers to ensure adherence of schedule to control costs. This can be better achieved by utilising technology to innovate effective methods to construct and deliver on time. Despite having large needs for rapid and efficient construction techniques, the Indian construction industry is yet to embrace pre-fabrication to the extent practiced in the developed countries. It has the benefit of planned mass production under factory conditions, safe from the weather fluctuations. Also, the economies of scale distribute several costs to a larger number of units. However, some of the issues that have been cited with pre-fabrication in the past include unavailability of skilled labour, expensive transfer of technology, perceived downsizing of human labour (from governments point of view) and simply lack of aesthetics and uniqueness due to mass production. However, pre-fabrication is the need of the hour for India, especially in the low-cost housing sector, where the targets and benefits are huge. One of the major inputs to pre-fabrication is freight cost, since modules have to be transported from the factory to the site. Since there is a large need for housing in almost every Indian city, a decentralised network of pre-fabrication factories can effectively reduce freight costs. Also, local materials such as fly-ash, lime and earth can be used extensively in pre-fabrication. While accelerating schedule of projects, pre-fabrication can help reduce construction costs as well and increase affordability to the home buyer.

Value Engineering Developers Tool to Ensure Optimal Cost with Enhanced Quality 1. Effective usage of locally available materials including marginal and industrial waste for the reduction of cost, yet maintaining the functional requirements of buyers; Rainwater harvesting, low-cost sanitation, waste-water management, and landscaping with recycled water Solar-operated street lights; Main electrical equipment to be located together, which helps in further cost reduction; Trenches for electrical, data etc and cabling to take the shortest route possible; Passive cooling, providing adequate natural ventilation systems to avoid forced ventilation/pressurisation systems.

2. 3. 4. 5. 6.

Use information technology extensively for planning in real estate Geographical Information Systems Geographical Information Systems (GIS) based planning and analysis of urban areas will lead to a better understanding of urban morphology, merging the exogenous factors such as demographics, income, traffic and climate to endogenous factors such as built and open spaces, green cover and public amenities. Indian real estate needs to leverage its expertise in information technology to ensure a holistic urban development process, which results in equitable growth of cities. Property Title Certification System (PTCS) and Transaction Records One of the optional reforms required to be undertaken by cities that are receiving funds under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is the creation of Property Title Certification System (PTCS). PTCS will be a comprehensive database of land transaction records, utilizing Information Technology. It shall have three registers register of titles, register of disputes and register of charges and covenants, which shall together constitute the total record of title of all lands. It will have far reaching implications in making the land market transparent and enabling better policymaking and urban planning. While none of the states have achieved this, most of the cities have committed to a 5-7 year timeline

Advance - Indian Real Estate - Charting a Global Course 19

to accomplish the reform, considering the vast amount of effort required in compiling this. Another optional reform under JNNURM is the introduction of computerized process of registration of land and property. Over half of the cities had already achieved this by June 2010. Government should make available the deeds and titles under the ambit of Right to Information (RTI) in order to foster transparency in the real

estate market. The registration departments should integrate these records with Geographical Information Systems (GIS) and make it available for analysis, which will enable faster and effective urban planning. The computerised records should also be integrated with the Unique Identification (UID) project that is currently underway, which is providing a unique identification to all Indian citizens. This will enable reliable identification of ownership and transfer of assets.

Authors
Himadri Mayank, Manager, Research & REIS Himadri.Mayank@ap.jll.com +91 22 3307 1500 Himadri Mayank joined Jones Lang LaSalle India in July 2008 and is responsible for managing the quarterly research offering Real Estate Intelligence Service (REIS), which tracks, analyses and forecasts trends in office, retail and residential property sectors for Indian cities. Based out of Mumbai, he also contributes towards regional and local research publications covering economy, sector analyses, market forecasts and investment strategies. He holds a bachelors degree in Architecture from Indian Institute of Technology Kharagpur and has four years of experience in the field of real estate. He is pursuing the Chartered Financial Analyst (CFA) program offered by CFA Institute, Charlottesville and is a 2011 Level III CFA candidate.

Hariharan Ganesan, Manager, Research & REIS Hariharan.Ganesan@ap.jll.com +91 22 3307 1500 Hariharan Ganesan joined the Jones Lang LaSalle India in April 2008 and is responsible for managing the quarterly research offering Real Estate Intelligence Service (REIS) publications. Based in Mumbai, he contributes to research publications on office, retail and residential real estate markets in the city. Prior to joining the Mumbai team, he managed research operations for Jones Lang LaSalle based out of Chennai region and has worked on multiple topical white papers, property market digests and bespoke research projects spanning diverse geographies within India. With over five years of research and marketing experience, Hariharan holds a dual degree from Bits Pilani and an MBA from IIPM, Delhi.

Abhishek Kiran Gupta, Head of Research & REIS Abhishekkiran.Gupta@ap.jll.com +91 22 6141 6500 Abhishek Kiran Gupta leads the Jones Lang LaSalle India Research team and is based in Mumbai. He manages research operations on a Pan-India level and is responsible for the teams outputs, including research reports such as topical white papers, property market digests and bespoke research projects based on specific client requirements. Prior to joining Jones Lang LaSalle, he had seven years of experience in market research, business analysis and market strategy consulting, servicing diversified industries including pharmaceutical, software publishing and insurance.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than USD 2.9 billion, Jones Lang LaSalle serves clients in 60 countries from more than 1,000 locations worldwide, including 185 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the companys investment management business, is one of the worlds largest and most diverse in real estate with more than USD 43 billion of assets under management. Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 19,700 employees operating in 78 offices in 13 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at The Asia Pacific Property Awards 2011 in association with Bloomberg Television. For further information, please visit our website, www.ap.joneslanglasalle.com

About Jones Lang LaSalle India

Jones Lang LaSalle is Indias premiere and largest professional services firm specializing in real estate. With an extensive geographic footprint across eleven cities (Ahmedabad, Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and a staff strength of over 4000, the firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, consultancy, transactions, project and development services, integrated facility management, property and asset management, sustainability, warehousing and logistics, capital markets, residential, hotels, health care, senior living, education and retail advisory. For further information, please visit www.joneslanglasalle.co.in

Real Estate Intelligence Service (REIS) India is a subscription based research service designed to provide you with cutting edge
insights into Indias diverse and challenging real estate markets through collation, analysis and forecasts of property market indicators and trends across all major Indian markets across various real estate asset classes - office, retail, residential. REIS empowers you with consistent and complete market data and analyses for all real estate indicators by specific micro markets. It is supplemented by value added services including client briefings, presentations and rapid market updates. For more details, contact, Abhishek Kiran Gupta +91 9820312065 Abhishekkiran.Gupta@ap.jll.com or Himadri Mayank +91 9975612304 himadri.mayank@ap.jll.com

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