Pune records lowest Q residential sales since 2010; office market at historical low with vacancy levels at 8.2%: Knight Frank India

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1 Pune records lowest Q residential sales since 2010; office market at historical low with vacancy levels at 8.2%: Knight Frank India Pune, January 11 th, 2017: Knight Frank India today launched the sixth edition of its flagship half yearly report - India Real Estate. It presents a comprehensive analysis of the real estate market of Pune for the period July - December (H2 2016). Residential Takeaways: New launches and sales fall by 64% and 32% respectively Unsold inventory at 49,700 units in H is at the lowest in comparison to the last six years; attributed to developers truncating their new launches with each passing year Sales volume and new launches drop by 35% and 64% Y-o-Y in Q At 6,300 units, the Q sales volume at their lowest quarterly level since 2010; new launches much worse at just 3,400 units in Q4 2016, not even one-fourth of its peak level of 16,000 units in Q New launches in the premium markets close to the city centre drop to zero since January 2016; sales volume drop by nearly 60% Y-o-Y in H Among the various micro markets of the city, Central Pune is the worst performing market registering the highest quarter to sell unsold inventory; reasons attributed to rising unaffordability and worsening of sentiment among homebuyers Market turns standstill due to government s move of demonetisation which resulted in developers refraining from announcing any new launches and buyers turning extremely cautious before committing purchases

2 Pune Residential Market trend: Impact of Demonetisation:

3 Office Takeaways: The trend of double-digit growth in transactions since 2013 ends with 2016 reporting a 31% Y-o-Y fall in the volume of transactions at 3.8 mn sq ft Vacancy levels stand at 8.2%, a historic low for the Pune office market; locations such as Kharadi, Viman Nagar, Yerwada and Nagar Road, which are highly preferred by occupiers, is even lower with absolutely no availability of good quality office space Against the transacted volume of 3.8 mn sq ft in 2016, the new supply that entered the market was just 2.5 mn sq ft IT/ITeS sector in the total transaction has fallen significantly during H2 2016; however, the BFSI sector reported a strong comeback from 14% in H to more than 33% in H The BFSI back support services led in terms of big-ticket deals, with certain banks leasing more than 80,000 sq ft of space in East Pune during this period SBD East, which includes locations such as Kalyani Nagar, Yerwada, Nagar Road and Hadapsar witnessed a jump in the share of total transaction volume in H Pune New Completion and Transaction:

4 Shantanu Mazumder, Director Pune, Knight Frank India said, Pune continues its downslide over the last five years after peaking in 2012 with more than 55,000 units in new launches and 48,000 units in sales. The fourth quarter numbers are a testament to the effect that the demonetisation move has had on the real estate market of the city with sales volume dropping by 35% Y-o-Y in Q The developer community seems to have responded to the changing market trend since there have been no new launches above the ticket size of Rs. 20 mn in H Slowing sales volume and poor response to premium projects in the past few years are some of the major reasons for developers staying away from high ticket-sized projects. Pune continues to face a lack of availability of good quality office space. The scenario of excess demand over supply has accentuated the problem of availability of leasable office space in the city. This has also rendered the market in favour of the landlords, who are asking for higher rents from tenants with each passing quarter. Going forward, we expect 2017 to be in a similar situation as no major new supply has been lined up at present. Such a scenario could further push occupiers towards other office markets where the shortage of office space is not so severe.

5 About Knight Frank Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 13,000 people operating from over 400 offices across 59 countries. These figures include Newmark Grubb Knight Frank in the Americas, and Douglas Elliman Fine Homes in the USA. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit In India, Knight Frank is headquartered in Mumbai and has more than 1,000 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (residential, commercial, retail, hospitality, land & capitals), facilities management and project management. For more information, visit For further information please contact: Aanchal Shetty (Knight Frank) AVP - Corporate Marketing & Communication Aanchal.Shetty@in.knightfrank.com