Presentation on the India Real Estate Outlook Report highlighting the residential and office real estate scenario in Pune.

1. Pune
July – Dec 2014

2. Residential
July – Dec 2014

3. 2014 witnessed a sharp drop in the demand for
residential properties - Absorption fell by 10%
RESIDENTIAL
5% rise in price
Y-O-Y in 2014 32% drop in H2 2014 vs. H2 2013
H2 2013 – 24,650 units
H2 2014 – 16,700 units
13% rise in H2 2014 vs. H2 2013
H2 2013 – 17,860 units
H2 2014 – 20,150 units

4. RESIDENTIAL
Residential Market in Pune in Year 2014
Sales
volume
fell
by
10%
34,870 units sold vs.
38,800 units in 2013
New
launches
dropped
by
26%
33,580 units launched vs.
45,370 units in 2013

5. East accounted for maximum launches while North
gained traction due to its proximity to Chakan
RESIDENTIAL
579units
216units
281units
7,003units
3,845units
5,214units
5,733units
3,433units
2,931units
5,820units
3,307units
4,485units
5,518units
6,083units
3,788units

6. RESIDENTIAL
Actual sales volume in 2014 has surpassed our
previous estimates
463units
396units
416units
4,603units
3,798units
4,965units
4,610units
3,822units
5,480units
4,263units
3,534units
4,644units
3,919units
3,168units
4,646units

7. Will take nearly 2 years to offload the current unsold
inventory
RESIDENTIAL

8. West Pune currently best performing with the
lowest QTS and minimum age of unsold inventory
RESIDENTIAL
Central
North
West
South
East
Total Unsold Units
67,557
as on December 2014

9. Momentum in price rise has tapered down in the last 6
months; Chances of a moderate 4% hike going forward
RESIDENTIAL

10. Concluding Remarks
 Residential demand heads downhill in 2014; second half of the year
posts better results
 Newer launches plummet by whopping 26%; developers cry caution
 Increase in FSI could drive housing growth; realtors hope for a
government nod
RESIDENTIAL

11. Going forward
 Launches likely to fall by 21% in the Jan – Jun 2015 period
 Sales to improve marginally by 13% at 16,630 units during Jan –
June 2015
 Price to increase moderately during Jan – Jun 2015 with a 4%
increase Y-O-Y
RESIDENTIAL

12. July – Dec 2014
Office

13. Vacancy levels drop to 16.5% during Jul – Dec 2014
OFFICE
24.8%
23.4%
21.5% 21%
20.1%
16.5% 16.4%

14. 2014 sees a never-before supply drop to the tune of
29%
OFFICE

15. Manufacturing and other sectors lose ground as
IT / ITeS makes a comeback
y
OFFICE

16. PBD East has seen a gradual rise accounting for nearly
one-third share during Jul – Dec 2014
y
OFFICE
39,875sq.ft.
65,720sq.ft.
276,699sq.ft.
336,500sq.ft.
143,000sq.ft.
171,849sq.ft.
129,526sq.ft.
652,000sq.ft.
577,800sq.ft.
948,000sq.ft.

17. Rentals projected to rise by 19% Y-O-Y during the next
6 months
y
OFFICE

18. Concluding Remarks
• Restricted supply and robust absorption pushed the rents up by
15% Y-O-Y in Jul - Dec 2014
• Consolidation and Expansion – the new mantra for Pune’s office
market
• Realtors breathe easy as vacancy levels plunge; ready to move in
spaces take the larger share

19. Going Forward
 Policy announcements on REITs and FDI to push leasing activity
across Pune
 Pune is likely to witness a robust supply of new office space
during Jan – Jun 2015; a 28% jump on a Y-O-Y basis
 Absorption likely to be 2.2 mn.sq.ft. during Jan – Jun 2015;
marginally higher than that of H1 2014
 Weighted average rental to rise by a whopping 19% Y-O-Y basis
during Jan – Jun 2015

20. KnightFrank.India@in.knightfrank.com
Research@in.knightfrank.com
Contact