KOLKATA MARKET REPORT
MID YEAR
2011
Values trends & opportunities in the Kolkata real estate market
OFFICE
RETAIL
RESIDENTIAL
R
LAND
WAREHOUSE
2011 Mid Year Market Review
DEAR FRIENDS, With the betterment of overall economic scenario, real estate activity in Kolkata has gained strong momentum over the past six months. Kolkata had no dearth of owner-occupiers or investors for properties either in the on going or in the newly launched projects across different price bands despite the continuous surge in prices as well as home loan rates over the past six months. However, sales have slowed down in many cities like Delhi, Mumbai, Pune etc. during this period. Throughout the first six months of 2011, we witnessed real estate growth and expansion across different sectors. We expect this to continue into the future. We are proud to produce this mid-year Market Review for our clients and for those interested in receiving the report. Please take out the time to read and enjoy this report knowing that Kolkata s leading real estate professionals, have put the time and effort in trying to create the most accurate and detailed review of the real estate industry in Kolkata.
Best wishes, TEAM NK .
2
2011 Mid Year Market Review
CONTENTS Office
............................... 4
Retail
............................... 6
Residential ............................... 8 Land & Warehouse..................... 10
3
CORPORATE SERVICES
2011 Mid Year Market Review
Kolkata office market
K
olkata office market continued to thrive in the 1st half of 2011 fuelled by fairly strong leasing and buying
activity.
Office space absorption for the first sixmonth of 2011 amounted to around 1.1 million square foot as compared to 0.5 million square foot for the same period last year, a growth of 100 percent. However, the take-up in the 2nd quarter was almost 2.5 times higher than the 1st quarter level. Improving investor confidence and availability of large Grade-A spaces at reasonable rates have made the Kolkata SBD area office market buoyant over the first two quarters of 2011. The SBD office market such as Sector-V in Salt Lake and New Town in Rajarhat continues to offer the best investment opportunities. With rents stabilizing and absorption becoming positive many investors are looking to purchase office space in these locations. The CBD area did not register any new supply that became operational in the 1st half of 2011. Construction of a 90,000 sq. ft. commercial project by Belani Group is currently under way at Woodburn Park. Heritage Group is coming up with a 1,00,000 sq. ft.(approx) commercial project on the Theater Road. Diamond Heritage a B+G+14 commercial project is coming up on a heritage property at Strand Road. Construction of the projects expected to be over by 2013. The SBD areas continues to be the front runner in new office space supply as most of the new supply has been concentrated in the areas such as E.M. Bypass, Sector-V, New Town etc. Ideal Group is planning to set up a new commercial building “Ideal Unique Centre” (7,00,000 sq.ft. approx) on E.M. Bypass. “Rudra Mani” a 1,00,000 sq. ft. office building by Mani group is currently under construction on E.M. Bypass near Ruby Connector and the Group has recently launched “Mani Casadona” a (B+G+16) Business Park on a 13 acres of land at New Town, opposite Ambuja Ecospace.
4
Mani Casadona coming up at Rajarhat, near Tata Cancer Hospital
Key Office Transactions (Lease & Outright) in 1st half of 2011
Lessee / Buyer
Property
Location Sizes (approx) 69,000 sq.ft.
Siemens
Infinium Digispace
Sector-V
Himadri Chemicals
PS Srijan Tech Park-I
Sector-V
L&T
DLF IT/ITeS Sez
New Town
15,000
Lahmeyer
Infinity Bench Mark
Sector-V
12,500
Mahindra & Mahindra
Infinity Bench Mark
Sector-V
8,800
Teoco
Infinity Benchmark
Sector-V
13,000
Ixia
Infinity Thin Tank
Sector-V
12,000
PCBL
Infinity Benchmark
Sector-V
19,000
Ericsson
DLF IT/ITeS Sez
New Town
1,00,000
Amrit Cemen t
Mani Casadona
New Town
22,000
Prism Infracon
Synthesis Business Park
Sector-V
L&T Surgent & Lundy
Godrej Waterside
New Town
22,000
L&T EDRC
DLF IT Park
New Town
15,000
Cognizant
Unitech Infospace
New Town
2,70,000
TCS
Unitech Infospace
New Town
2,30,000
Investor Take up
Infinity Benchmark
Sector-V
Investor Take up
Ambuja Ecospace
New Town
Investor Take up
Ambuja Ecosuite
Sector-V
Ericsson
Ambuja Ecospace
New Town
60,000
Prism Infracon
Mani Casadona
New Town
20,000
TechPro
Godrej Waterside
Sector-V
60,000
International Combustion
Infinity Benchmark
Sector-V
12,000
7,000
6,000
7,000 10,000 8,000
Source: NAI NK Realtors Research
CORPORATE SERVICES
2011 Mid Year Market Review
GRADE - A, Office Rental Values Park Street
A.J.C. Bose Road
Kasba
Topsia
Camac Street New Town
Sector-V
160
“Ideal Unique Centre” coming up on E.M. Bypass
Rate-Rs. per sq.ft. per month
140 120 100 80 60 40 20 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
VACANCY RATES
Overall vacancy rates in the SBD areas such as Kasba, Topsia, Sector-V and New Town have declined marginally from end 2010 and stayed at around 35% in the middle of 2011. However, the over all vacancy level in the 1st quarter was high compared to the vacancy level of 2nd quarter of 2011. This is mainly due to the completion of few large projects in New Town area. With the increased level of absorption in New Town and Sector-V, the overall vacancy level decreased in the 2nd quarter.
2007
FORECAST Rentals across Kolkata market likely to remain stable during 2011. Relocation of old business houses from CBD to SBD areas will continue to increase in the coming quarters.
2010
2009
2011
Park Street
A.J.C. Bose Road
Camac Street
Dalhousie
Topsia
Sector-V
120 100 80 60 40 20 0
Q1 Q2 Q3
LEASE RATES
Q4
Q1 Q2 Q3 Q4
2007
Q1 Q2
2008
Q3
Q4
Q1
Q2 Q3 2010
2009
Q4 Q1
Q2
2011
Office Capital Value Ranges (as on June, 2011) 18,000 16,000 Rate-Rs. per sq.ft.
Over all lease rates in almost all the office locations remained stable during the 1st two quarters of 2011. Park Street is the only location in the CBD area where average price of Grade-A property increased by around 4% from Rs. 120/sq.ft/month from end-2010 to Rs. 125/sq.ft/month at mid 2011. There were no changes recorded in average price of the SBD area office buildings such as Topsia, Sector-V and New Town towards the end of 2nd quarter of 2011.
2008
GRADE - B, Office Rental Rates
Rate-Rs. per sq.ft. per month
Overall vacancy rates in Grade-A and Grade-B office buildings in the CBD area estimated at approximately 4% at the end of 2nd quarter.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Park Street
Dalhousie
Camac Street
A.J.C Bose Road
Kasba
Topsia
Sector-V New Town
Source: NAI NK Realtors Research
5
RETAIL SERVICES
2011 Mid Year Market Review
Kolkata retail market With the betterment of overall economic scenario retail market activity in Kolkata has gained strong momentum over the past six months. All the big players like Aditya Birla Retail, SPAR Hypermarket, Wal-Mart, Metro Cash & Carry etc. are seriously looking at Kolkata market with larger formats. Existing large format players like Future Group, Spencer s and Reliance Retail are in the process of making their presence even more strong. Over the past one year, Reliance has opened a number of new stores across Kolkata market and their focus had been mainly on the non-food retail segment. Apart from opening new stores, they also have concluded a significant number of new transactions during this period.
Spencer s Galleria Mall at Park Circus Future Mall Supply Mall
Over the past couple of quar ters automobile retailers have become a fastgrowing segment in the Kolkata market. Kolkata is a key market for all type of premium luxury vehicles in the East. Most of the major premium luxury brands such as Audi, Mercedes Benz, Jaguar, Land Rover, Volkswagen, Skoda, Nissan, Toyota, Honda have stores here. A significant number of new car showrooms have come up in the locations such as Alipore, A.J.C Bose Road, Lee Road, Topsia, E.M. Bypass etc. Continued growth is the story for F&B sectors in Kolkata. Passion for good food and eating out habits have helped the restaurant sectors expanded enormously over the years in Kolkata. The city has a wide choice of restaurants, cafes, wine bars, pubs, and up-market fine dining. Restaurant and bar sector have become more vibrant with a few more openings during the past six months. Apeejay Group is bringing the world renowned chain “Hard Rock Café” in Kolkata by setting up a store in Park Street. “Spaghetti Kitchen” a speciality restaurant which serves Italian cuisine opened in Forum Mall in February, 2011. Two KFC store is coming up at Lake Town and Kasba. FTV bar is coming up at Chrome Hotel on AJC Bose Road.
6
Location
Developer
Sq.ft.
Operational By
Lake Mall
Rashbehari Connector
Venkatesh Foundation
2,50,000
2011
North City
Lake Town
Diamond Group
3 ,00,000
2011
Avani Riverside
Howrah
Avani Group
4,20,000
2011
Junction Mall
Barasat
Badrinath Infrastructure
1 ,50,000
2011
Panthpadap
Madhyamgram
Bengal Shelter
3,00,000
2012
Acropolis
Kasba
Merlin Group
3,50,000
2012
Spencer’s Galleria
Park Circus
RPG Group
4,00,000
2012
Varna Parichaya
College Street
Bengal Shelter
12,00,000
2013
Aria Shree
Baruipur
Dipchand Development
1,00,000
2013
Source: NAI NK Realtors Research
Kolkata didnot witness any mall completion in the first six months of 2011. “Avani Riverside” on Foreshore Road in Howrah, “Acropolis” on Rajdanga main Road near Kasba Gol Park, “Spencer’s Galleria” on Sayed Amir Ali Avenue in Park Circus, are Kolkata s much hyped three under construction malls which are likely to be operational between 2011 and 2012. “Avani Riverside” is likely open its door in the end of 2011 where Reliance has taken 1,00,000 sq.ft space for its non-food retail brands and Future Group has taken around 1,00,000 sq.ft. Area.
Buoyancy in the Kolkata retail market can also be manifested by a number of upcoming key high street stores in the mature urban areas as well as in the sub urban areas. Mature urban areas such as Free School Street, Camac Street, Shakespeare Sarani, A.J.C Bose Road, Loudon Street, Elgin Road, Lee Road, Sambhunath Pandit Street, Woodburn Park, Lansdown Road etc. are likely to witness approximately 0.2 million square foot of high street retail space to be added to the Kolkata retail market between 2011 and 2012 which are currently under various stages of construction.
Spencer Galleria Mall has finalised “Lifestyle” and “INOX” as anchor tenant and multiplex operator. Discussions are on with different luxury brands to make the mall one-stop luxury destination in the east.
Outskirt of Kolkata like Sonarpur, Baruipur, Joka, Maheshtala, Barasat, Barrackpur etc. are also witnessing a spurt in commercial neighbourhood centres mainly within upcoming large residential projects.
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RETAIL SERVICES
2011 Mid Year Market Review
Location
Max Prapti Honda Reliance Digital Reliance Jewllery Senco Gold KFC Fab India Reliance Digital
Elgin Road Elgin Road Lee Road Park Street Park Street Dalhousie VIP Road Allenby Road NSC Bose Road
Sq.ft.
25%
8,000 (approx.) 5,000 ” 3,500 ” 3,500 ” 2,000 3,000 7,000 5,000 5,000
” ” ” ” ”
MALL VACANCY RATES Operational mall vacancies in Kolkata have increased considerably in the end of 2nd quarter of 2011 and currently stays at the highest level. The overall year on year vacancy rate in the operational malls have increased to 40.65% from 13.50% a year earlier. This was mainly due to the high vacancy level at Axis mall in New Town and Home land Mall at Bhowanipore. The Home Land Mall at Bhowanipore had the highest vacancy level at around 20% followed by the Axis Mall at around15% at mid year 2011. Vacancy rates in the South City Mall and Forum mall were at around 0.10% and 0.50% respectively in the end of June 2011. While Metropolis and Mani Square Malls on E.M. Bypass had vacancy at around 2% and 0.55% respectively.
MALL LEASE RATES Asking lease rates in the operational malls have increased considerably over the past twelve months. Tight supply situation and retailers aggressive drive have provided strong momentum to the rental growth in the malls in Kolkata. The year on year mall lease growth rates in the CBD, South Kolkata, E.M. Bypass, and New Town area malls were around 32%, 11%, 19% and 21% respectively at mid2011. In the past one year asking rentals in the Salt Lake area malls have soared to a new high and currently have rentals in the range between Rs 80 and Rs 400 per sq.ft per month. The lowest year on year mall rental growth was recorded in the North Kokata area malls at around 11% at mid-2011 and currently have rentals in the range between Rs. 80 and Rs.120 per sq.ft. per month.
JUNE 2010
EM Bypass
City Centre-I
20%
Salt Lake
Metropolis
15%
South-West
Mani Square
10%
5%
JUNE 2011
New Town
City Centre-II
South City
South
Forum
North
Home Land
South-Central
Axis (New Town)
Central (CBD)
0%
0
50
100
200
150
250
Rate-Rs. per sq.ft. month
Mall Lease Rates (average price) 350
Rate-Rs. per sq.ft. per month
Tenant
High Street Lease Rates (average price)
Operational Mall Vacancy Rate
Key High Street Retail Transactions
300 250 200 150 100 50 0
Q1 Q2 Q3 Q4 Q1 2007
Q2 Q3 Q4 2008
Q1 Q2 Q3 Q4 2009
Q1 Q2 Q3 Q4 2010
Q1 Q2 2011
CBD North Kolkata South Kolkata E.M. Bypass
200 220 280 300 310 325 325 200 200 200 190 190 190 190 190 240 240 250
Salt Lake New Town
140 150 150 150 150 150 150 130 110 110 150 110 120 120 120 145 150 240
70
90
80 100 120 130 145 145 110
90
95 100
125 140 175 190 195 200 200 150 110 100 170 100 130 130 130 160 175 190 110 120 145 160 180 200 195 145 120 120 115 112 118 118 118 140 140 140
70
70
90 110 120 120 120 100 90
90
90
90
95
95
95 100 100 115
Source: NAI NK Realtors Research
HIGH STREET LEASE RATES Overall y-o-y key high street lease rates across locations in Kolkata have increased by around 16% from the mid of 2010. The highest increase was in the CBD area at about 29% and lowest increase was at Salt Lake area at about 3%. Lease rates in the CBD area such as Park Street, Camac Street, A.J.C. Bose Road were in the range between Rs. 150 and Rs. 300 per square foot per month. Rentals in New Towns were hovering between Rs. 60 and Rs. 90 per square foot per month at the end of June, 2011.
FORECAST Increasing demand will bring more supply in the coming months. Fewer supply and strong retailers demand will likely push the overall mall and high street vacancy rates down and lease rates marginally up in the short term across the market. The growth momentum in the Kolkata retail market will continue through 2011 but high inflation and the rise in interest rates are likely to take the toll on overall retailers demand.
7
RESIDENTIAL SERVICES
2011 Mid Year Market Review
Kolkata Residential market
Kolkata residential market has witnessed a steady growth across all price ranges over the first half of 2011. Although demand for new homes grew by 10% to 15% in the first six months of current year, compared to 2010, there were a few new launches to the Kolkata market.
Supply in the First Six Months of 2011
Project
Location
Salarpuria Pearl Aryan Towers Dream Pallazo Emami City
Rajarhat Madhyamgram Rajarhat Jessore Road
Units 48 (approx.) 144 ” 192 ” 1200 ”
7000 6000
Average Rate-Rs. per sq.ft.
A significant proportion of young salaried working class and business class who have an appetite for new investments were mainly driving the demand.
Overall Average House Price Growth
5000 4000 3000 2000 1000
0 Q1
Developer
Location
Units
Forum Projects Srijan, PS & Heritage Orbit Group Arihant Group
On E.M. Bypass Near Alipore Alipore Road Jodhpur Park
80 (approx.) 70 ” 20 ” 16 ”
“Ideal Exotica”, a much hyped residential project by Ideal Group at New Alipore is going to hit the kolkata s prime residential market very soon.
8
Q1
Q4
Q2
Q3 Q4
Q1
Q2
2008
Q3
Q4
Q1
Q2
Q3
Q4
2010
2009
Q1 Q2
2011
12,000 10,000 8,000 6,000 4,000 2,000 0 Q1
Q3
Q2
Q4
Q1
2007 Central
Q2
Q3
Q4
Q2
Q1
2008
South Central
South West
Q3
Q1
Q4
2009 South
Q2
Q3
2010 East
North
Q4
Q1
Q2
2011 South East
Prime Area House Price Trend High Price Point, Q2-2010
High Price Point, Q2-2011
Low Price Point, Q2-2010
Low Price Point, Q2-2011
18,000 16,000 14,000
Rate-Rs. per sq.ft.
Prime Supply in Pipeline
Q3
14,000
PRIME RESIDENTIAL MARKET After experiencing a steady growth in 2010, Kolkata’s prime residential market continued to witness moderate demand and high capital value growth through the first half of 2011. The first half of 2011 saw capital values for ultra prime properties in the established areas such as Ballygunge and Alipore, increasing by 15% mainly due to the combined results of rising household incomes, formation of new families and a tight supply situation.
Q2
2007
Average Rate-Rs. per sq.ft.
K
olkata had no dearth of ownero c c u p i e r s o r i nve s t o r s fo r apartments either in the on going or in the newly launched housing projects across different price bands despite the continuous surge in prices as well as home loan rates over the past six months. However, residential sales have slowed down in many cities like Delhi, Mumbai, Pune etc. during this period.
12,000 10,000 8,000 6,000 4,000 2,000 0 Loudon Street
Queens Park
Ballygunge Gurusaday Circular Rd. Road
Alipore
EM Bypass Kankurgachi New Town (Central) Source: NAI NK Realtors Research
7
2011 Mid Year Market Review
RESIDENTIAL SERVICES
SUB URBAN RESIDENTIAL MARKET
Performance of suburban residential market for mid-2011
Currently, Kolkata suburbs have no dearth of on going residential projects.
In the sub urban areas of Kolkata, supply of apartments are more in the range between Rs 15 lacs and Rs 30 lacs. This price bracket ideally suits the middle income groups budget.
Average Price in December 2010
Suburb
Major improvement in the infrastructure such as upcoming flyovers, expansions of Bypass and Metro connectivity together with scarce availability of modern apartments within the reach of growing middle income groups in the main city limits are mainly boosting the suburban residential growth in the areas such as Narendrapur, Sonarpur, Joka, Mahestala, Batanagar, Rajarhat, Sinthi More, Sodepur, Madhyamgram, Barasat etc.
The Table on the right lists Kolkata s five important sub urban locations and shows how they have performed in the past six months ending in June 2011. The suburbs had varying degrees of growth ranging from 5.38% for Narendrapur-Sonarpur area housing projects to 14.80% for BT Road
Rs. 2119
Rs. 2233
5.38
Joka , Mahestala & Batanagar
Rs. 2110
Rs. 2350
11.50
BT Road (Dunlop to Sodepur)
Rs. 2160
Rs. 2480
14.80
Madhyamgram
Rs. 1850
Rs. 2100
13.50
Rajarhat (Excluding HIDCO Area)
Rs. 2115
Rs. 2360
11.60
Average % growth
Location
Rs./Sq.ft. 1,900 - 4,500 3,000 - 5,000 1,800 - 2,800 2,500 - 5,500 1,800 - 4,500 7,000 - 9 ,000 8,000-10,000
Park Street Loudon Street Theatre Road
10,000-12,000 10,000 -15,000 10,000-12,000
Salt Lake Beleghata E.M. Bypass (central) New Town/Rajarhat
3,500 - 4,500 25,00 - 3,200 4,400 - 8,700 1,900 - 4,500
Garia Narendrapur
2,200 - 3,285 1,600 - 2,600
KOLKATA
North
Central
East
South-East
11.35%
Percentage Share of Suburban House Price Points (Kolkata)
Rs 2801- 3000 Rs 2601- 2800
Rs 1400-1600 Rs 1601-1800
4% 6%
4%
Rs 1801-2000
23% 23% Rs 2401- 2600
10% 13%
5%
17%
Rs 2001- 2200
Rs 2201- 2400
FORECAST Price Point - in Rupees per square foot
Residential Sale Rates (as on June, 2011) Jessore Road VIP Road Madhyamgram Shyambazar B. T. Road Kankurgachi Ultadanga
% Growth
Narendrapur, Sonarpur
Price - in Rupees per square foot
Desire to reside in a gated community where all the modern amenities such as swimming pool, gymnasium, community hall, children’s play area, 24 hours security etc. are being provided within the mentioned budget, social infrastructures such as school, hospital, shopping & entertainment centres are located in a very close proximity and traveling time from home to work place are not more than one hour are mainly driving the end users demand.
Average Price in June 2011
Location Queens Park Sunny Park Ballygunge Cir. Road Ballyguge Park Road Mayfair Road Bullygunge Place Gariahat Road Goal Park Rashbehari
Rs./Sq.ft. KOLKATA 12,000 -17,000 12,000 -17,000 12,000 -17,000 10,000 -15,000 South-Central 10,000-15,000 7,000 -10,000 8,000 -10,000 7,000 - 8,000 6,000 - 7,000
With anticipated increase in the home loan rates and continued increases in house prices through the first half of 2011, the residential market may not see sharp price rise in the second half of 2011. However, demand of apartments in all price ranges in Kolkata should remain strong. Although interest rates are expected to rise, they will still be low enough to keep affordability within reach for many home buyers requiring home loans.
12,000 -17,000 South-West Alipore 1,800 - 3 ,000 Behala Batanagar & Maheshtala 1,650 - 3,120
With anticipated few new launches within next two to three months, sales of prime properties are expected to increase in the 2nd half of 2011.
Lansdowne Road Bhawanipore P.A. Shah Road Jadavpur Tollygunge
Investor s interest in the moderately priced prime properties located in the upmarket pockets would be more during the project launch.
7,000 - 9,000 6,500 - 8,000 6,500 -10,500 3,000 - 4,500 4,000 - 5,500
South
Source: NAI NK Realtors Research
9 11
2011 Mid Year Market Review
LAND & WAREHOUSE SERVICES
Land and Warehouse market
T
he first half of 2011 saw the defeat of left front government in West Bengal assembly election and the rise of Mamata Banerjee as chief minister and her party TMC in the power where land played a crucial role in changing a long-standing government that were in power for a record 34 years at a stretch. The newly formed state government is against all kind of state assisted land acquisition and is extremely careful about it. They would not acquire land for any private projects. Business firms would have to purchase land directly from the land owner at the market price. At present, progress of most of the large industrial projects in the state which require large tract of land have either stalled or is slow due to the lack of clear policies on land. The land market has become highly competitive over the past few years due to continuing growth in the residential market. The value of residential development land in Kolkata has experienced a strong increase in the past few years. The average price growth of land for residential use across Kolkata market was around 27% between June, 2010 and June, 2011. Residential growth is pushing land prices higher, especially in the suburbs. Land values in the sub urban areas such as Garia, Narendrapur, Behala, Joka, Madhyamgram etc. have witnessed the maximum increase since June, 2010. Availability of affordable homes and significant improvements in various infrastructures are mainly driving the suburb demand.
Residential Land Rates (million Rs. per cottah) Park Street, Theatre Road
10.25-10.75
Ballygunge (prime areas)
10.00-11.50
Alipore (prime areas)
9.00-10.50
Ballygunge (other areas)
7.00 - 9.00
Gariahat, Rashbehari
7.50 -10.00
Shyambazaar
3.50 - 5.00
V.I.P Road
2.50 - 4.50
Salt Lake
1.00 - 3.50 3.00 - 5.00 2.00 - 3.00
Jodhpur Park Tollygunge Garia
0.70 - 1.50
Narendrapur
0.70 - 1.00
Behala
1.00 - 2.00
Joka, Pailan
0.35 - 0.50
Jessore Road, B.T. Road
0.40 - 2.50
Madhyam Gram
0.40 - 0.80
10
Industrial Land Rates Location
Rs./Cottah
Kona Express way to Dhulagar Toll Plaza
0.40-0.70 Million
Dhulagar Toll Plaza to Uluberia
0.20-0.40
”
Uluberia to Kolaghat
0.08-0.15
”
Dankuni to Srirampur (on Delhi Road)
0.30-0.45
”
Dankuni to Singur (on Durgapur Exp. Way) 0.08-0.40
”
Srirampur to Chandannagar
0.15-0.25
”
Kalyani
0.15-0.25
”
In recent times, development of privately owned and managed industrial parks have gained momentum. These industrial parks are coming up in the areas such as Dankuni, Jangalpur, Uluberia etc.
With the increase in various trading and industr ial activity and the active development of retail trade, the demand of warehouse market continues to show significant growth in the Kolkata market over the past couple of years. Construction of various warehouse premises have been on the rise in the major warehousing zone such as NH6 and NH2 area in the past few years. Approximately 0.35 million sq.ft. new supply were added to the Kolkata warehouse market in the 1st half of 2011. Maa Ambe, one of the reputed warehouse developers of Kolkata has acquired land at Dankuni on NH2 to develop a 0.55 million sq.ft warehouse. Key Transactions
In most cases, where past government failed to acquire land for various industrial investments due to the strong resistance from the land owners, private promoters didn t face any major problem to set up these private industrial parks.
Tenant Project/Location Sq. Ft. 80,000 Unrevealed Sankrail Indl. Park (Nh6) Merryl Infra, Dhulagarh (NH6) 65,000 Dominos
Warehouse Lease Rates Sub Market
Private promoters buy small fragmented raw lands parcels directly from the owners at market price and after establishing various infrastructures such as approach road, internal roads, boundary wall, drainage and sewerage systems, power and water connections etc, sell the plots to the occupiers. Small and medium scale industries and warehouses are the major occupier of these parks. Some of the noted privately owned and managed industrial parks are Shilpangan by Unnayan Group and Agarwal Industrial Park which are coming up at Dankuni. Jain Group is coming up with such an industrial park on 50 acres of land behind the Coal India facility in Dankuni. They are in the process of acquiring another 50 acres for phase-II development.
FORECAST
Rs./sq.ft./month
NH-6 NH-2 Taratala, Hide Road Budge Budge Trunk Road B.T. Road Barasat-Madhyamgram
14-18 11 -16 16-22 14-18 10 -14 12 -15
Source: NAI NK Realtors Research
Lease rate in most of the locations such as NH6, NH2, Taratala, Hide Road, Budge Budge Trunk Road and BT Road have been stable in the past six months ranging between Rs. 10 to Rs. 22 per sq.ft. per month. While warehouses in the BarasatMadhyamgram area witnessed around 4% increase in rental rates since end - 2010. Today, warehouse properties yield is around 12%.
FORECAST
Prices of raw land will be more in the fringe areas in the coming quarters.
Strong demand will likely drive rental rates higher by 5% to 10% over the next six months.
Continued growth in the housing market will have a significant impact on the growing land value and would remain competitive in the long term.
With little new supply of warehouses in the pipeline, the overall vacancy rates are expected to decrease in the medium to longer term.
2011 Mid Year Market Review
NAI NK Realtors established in 1987, is one of the fastest growing, most active commercial real estate services firms in Kolkata. The firm provides clients with the best local market knowledge in the industry, complemented by NAI Global s professionally-managed international network, the largest of it s kind. NAI NK Realtors team known for its market leadership, collaborative corporate culture, knowledgeable and experienced professionals and commitment to client service. NAI NK Realtors services include multi-site acquisitions and dispositions, sublease, tenant representation, lease administration and audit, site searches, finance and investment services, demographic analysis, feasibility analysis, due diligence and related consulting and advisory services. For more information, visit NAI NK Realtors Web site at: www.nkrealtors.com
This report contains information available to the public and NAI NK Realtors accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein. The same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawals without notice.
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Build on the power of our network.™
325 offices covering the world. Asia Pacific Australia, China, Guam, Hong Kong, India, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam
Latin America and the Caribbean Argentina, Bahamas, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Paraguay, Peru, The Caribbean, Uruguay, Venezuela
Canada Alberta, British Columbia, Nova Scotia, Ontario, Quebec
United States Alabama, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, IIIinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin
Europe, Middle East and Africa Austria, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Kazakhstan, Kuwait, Latvia, Norway, Qatar, Romania, Russia, Serbia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, United Arab Emirates, United Kingdom
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9 Elgin Road 4th Floor Kolkata 700020 India tel +91 33 4040 1010 fax +91 33 4040 1040 sales@nkrealtors.com www.nkrealtors.com