Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad December 2013 Prepared for Commercial and Industrial Finance Pvt. Ltd.
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
TABLE OF CONTENTS
OBJECTIVE
03
SITE CHARACTERISTICS
SCOPE OF WORK
07
FEE STRUCTURE
12
ABOUT KNIGHT FRANK
19
ANNEXURE
33
TEAM STRUCTURE
13
CAPITAL TRANSACTIONS GROUP
29
DISCLAIMER
37
04
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
Assignment Commercial and Industrial Finance Pvt. Ltd. herein after referred to as “Client” currently holds ~45 acre land parcel in Serilingampally, Hyderabad. The details of the land parcel are mentioned below: Particulars
Details
Site Area
~45 acres
Zoning
Commercial & Residential as per HMDA Masterplan 2021
Address
Serilingampally, RR District
Structures
Vacant Plot
Site Location
Abutting old Mumbai Highway
Neighborhood
Alind Factory, Residential Project by Legend Harmony
Distance from Main Locations
Hyderabad Central University Nalagandla Lingampally Railway Station BHEL Gachibowli Financial District International Airport Hitech City Kondapur Tellapur Gopanapally
The client intends to appoint an advisor for assisting them to mediate to achieve consensus for the sale of the ASSET as well as to identify potential BUYERS and facilitate the sale of the ASSET.
1.5 km. 2 km. 2 km. 3 km. 5 km. 7 km. 30 km. 9 km. 4 km. 5 km. 9 Km.
OBJECTIVES
Arrive at consensus for sale of the land parcel in the most amicable way Achieve highest sale price for the subject land Ensure wide market coverage in terms of potential acquirers
03
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
SITE CHARACTERISTICS LOCATION MAP
04
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
SITE photographs
Towards BHEL, Nallagandla, Lingampally
Old Mumbai Highway (Proposed 100 Ft Road)
Towards Gachibowli, Financial District & Hitech City
Towards BHEL, Nallagandla, Lingampally SITE Old Mumbai Highway (Proposed 100 Ft Road)
Towards Gachibowli, Financial District & Hitech City
Old Mumbai Highway (Proposed 100 Ft Road) Aluminum industries area Aluminum industries area
Towards Gachibowli, Financial District & Hitech City
SITE
Towards BHEL, Nallagandla, Lingampally
Towards Gachibowli, Financial District & Hitech City
SITE
Towards BHEL, Nallagandla, Lingampally
05
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
SCOPE OF WORK The Scope of Services for the land sale advisory would include:
Periodically report to owners regarding the progress and
Discreetly approaching the other stakeholders in the land
parcel individually with an endeavor to achieve a consensus on an outright sale of the land; which in our opinion is the best way to maximize the value of the land Approaching the developer involved in the land parcel and negotiating the settlement with him, thereby removing the bottlenecks in the sale process Represent owners exclusively for divestment of the said property Position the proposed divestment and facilitate key decision making Identify potential acquirers and user groups In consultation with owners, undertake a suitable marketing program for the divestment of subject property; In consultation with owners, work with creative content generators/ media agents and other third parties to provide marketing services and production of all marketing collaterals
development of the marketing activities; Formulate and implement a closed tender process to obtain a binding offer Jointly work with owners to identify, negotiate with and finalize acquirer Facilitate due diligence process conducted by the potential buyers Assist owners’ appointed legal counsel in all sale documentations and agreements Assist owners’ appointed Chartered Accountant and Tax Consultant for any tax computation and valuation certificate in compliance with FEMA and RBI regulations Coordinate with remittance bank to ensure FC-TRS forms and other related statutory documentations are done in accordance with FEMA and RBI regulations to facilitate remittance of sale proceeds outside India
ACTION PLAN
PRE-OFFER PROCESS Arriving consensus on sale decision and overcoming roadblocks Identify Positioning & Divestment Strategy Marketing Collateral Generation
MARKETING PROCESS Reach out to Prospects Co-ordinate Marketing Process Buyer Selection Deal Closure
07
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
PRE-OFFER PROCESS
Arriving consensus on sale decision and overcoming roadblocks
STAGE 1 - Approach all the stakeholders and get go ahead on the sale process as selling vis-Ă -vis holding maximizes the stakeholder value - Approach the associated developer and arrive at settlement
Stage 1: Arrive consensus on sale and eliminate roadblocks A. Approach all Stakeholders Knight Frank to approach all the stakeholders of the land parcel to discuss about best way to maximize shareholder value. In our opinion, the sale of the land parcel is a preferred approach to achieve this. Attempt to convince all the stakeholders to consider sale of the land parcel as we are of the opinion that this is in their best interest. In continuation with the possibility of sale discuss about any probable interest in the acquisition of our land parcel. Record the feedback of all the stakeholders and if all the stakeholders are in consent with the sale, Knight Frank to take the sale process ahead, alternatively incorporate the viewpoints of the stakeholders in the process.
08
B. Approach associated developer We understand that there may be developer associated with this land parcel who may claim to have an interest in the ownership or have claim to have development rights for certain portion of the land parcel. Knight Frank to approach the associated developer and discuss various possibilities of aligning the interest of all the affected parties. Arrive at a suitable means of settlement which is in best interest of the stakeholders as well as provides hassle free settlement from the developer. C. Mediate settlement Knight Frank, to undertake several rounds of discussion amongst the stakeholders and any associated parties to arrive at consensus on hassle free sale of the land parcel. Endeavor to eliminate any bottlenecks associated with the sale process. In association with a suitable legal counsel, which will be separately appointed by the client, complete the required filings and formalities at an appropriate stage.
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
PRE-OFFER PROCESS
Identification of divestment strategy & marketing programme
Site details including
STAGE 2 - Compile complete set of documents related to land
Property & location description Area statement,
parcel including marketing collaterals, teasers, IM’s
Zoning and regulatory classification etc.
- Initiate marketing exercise
Best-use feasibility Transaction details including Proposed transaction structure including commercial
Stage 2: Creation of Creative Collateral for Site Marketing
terms & conditions Transaction Process Flow
Preparation of Buyer RFP Document In consultation with the Client, Knight Frank shall prepare the Information Memorandum document to be issued to the potential buyers. The Information Memorandum would serve as a base document for discussion with the potential buyer and would provide the following information:
Minimum reserve price/ bid price based on inputs from
the valuation study Key Bid Criteria Bid Submission Form In addition, Knight Frank would also assist in creation of teasers and newspaper advertisements soliciting interested buyers for the subject site.
Creation of all creative collateral for site marketing as per identified strategy THE MARKETING PROCESS STAGE 3 - Identify prospects through Knight Frank’s network of relationships among Developers and Local Broker Network - Advertise property in local newspapers - Issue Information Memorandum & other Marketing Collateral - Conduct site inspections & assist in preliminary due diligence for the Prospects
Stage 3: Identification of Interested Bidders A. Identification of Potential Investors through existing investor relationships: Knight Frank shall, in close co-ordination with the Client, identify potential developers and HNI’s who could be approached with the proposal for acquiring the Site. Knight Frank has excellent existing relationships with most developers and wealth partners active in the micro-market. In addition, Knight Frank would assist the Client to place advertisements in leading newspapers in the region to solicit interest from potential individual buyers locally. The figure below highlights the alternate marketing channels proposed to be utilised by Knight Frank. B. Post receiving approval from the Client on the final Information Memorandum draft, Knight Frank shall share the document with the identified potential investors.
09
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
Direct Marketing
Direct Marketing
Presentations for B2B Clients
Online Marketing
E-Marketing
Advertise on KF website
Listings on Property Portals
Direct emails to KF proprietary database of HNI’s and Developers E-Auctions, if required
Identification of interested bidders
Stage 4: Assistance in Deal Closure A. Engaging interested buyers: Knight Frank shall coordinate and conduct on-site pre-bid meetings with all interested buyers (“Bidder(s)”). Knight Frank shall act as a single point of contact for all Bidder queries/ responses, furnish required information to assist the Bidders analyse the opportunity as part of the bid preparation process. All such pre-bid meetings shall be documented and action points from such meetings shall be followed up by Knight Frank. B. RFP Response Evaluation: Knight Frank shall work towards soliciting formal interest from the Bidders in the form of sealed bids. Knight Frank shall assist the Client to review all proposals and shortlisting Bidders for a second round of closed room negotiations, if required.
D. Assistance in Due Diligence: A transaction of this nature shall require a due diligence to be carried out by the Buyer. Knight Frank shall co-ordinate with the Buyer for carrying out this detailed due diligence exercise. E. Assistance in Documentation: A critical component of the transaction is finalization of the applicable documentation including the Purchase Contract with the Buyer. Knight Frank shall oversee the document preparation by a Law firm and assist other regulatory/ tax consultants engaged by the Client to ensure that the process is carried out appropriately, in accordance with FEMA and RBI regulations and completed at the earliest.
C. Assistance in Commercial Negotiations: Knight Frank shall initiate and support the process of carrying out commercial negotiations with the shortlisted Bidders. Knight Frank shall, in consultation with the Client, finalise the commercial terms and conditions in the form of a term sheet/MOU with the selected Bidder (“Buyer”).
Deal Closure
10
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
RISKS AND MITIGATION
Market Risk
Title risk- mortgages/ charges, statutory clearances for sale
Buyer Risk
KF’s extensive relationship &
Set up Data Room and conduct
Due diligence of
experience Run a structured process and reach out to prospective purchasers through aggressive marketing through multiple channels Creation of research backed marketing collaterals
prior due diligence and highlight issues before initiating marketing process Clear all mortgages/ charges on title, if required, prior to deal finalization Identify appropriate deal structures in line with existing FDI regulations
prospective buyer at shortlist stage Ability to arrange funding from PE & RE Funds, if required Forfeiture provision to deter default on deal completion
RISKS
MITIGANTS
11
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
THE TEAM CORE ENGAGEMENT TEAM
Rajeev Bairathi (Transaction Co-ordinator & CRM Head)
ADVISORY SUPPORT
TRANSACTION TEAM
Saurabh Mehrotra
Vikas Karamchandani
(National Director, Advisory)
(Transaction Manager)
S. Ramanujam
Dileep Kumar
(Lead Consultant Hyderabad Micro-market)
(Transaction Support)
13
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
TRANSACTION TEAM
Rajeev Bairathi Executive Director - North & National Head Capital Transactions Group rajeev.bairathi@in.knightfrank.com
CRM Head Rajeev will lead the overall execution from India
Rajeev Bairathi has an extensive experience of over 16 years across Corporate Finance & real estate transactions. Rajeev has led a large number of successful private equity, debt, M&A and land transactions during his career and has been involved in foreign investments worth over US$1bn. on a cumulative basis in India. At Knight Frank India, he is responsible for building the Capital Transactions Group nationally, and driving the strategic expansion of Knight Frank businesses in North India. Prior to Knight Frank, Rajeev served as a key member of DTZ Executive Leadership team in
India. Rajeev successfully built DTZ’s Investment Advisory, Valuation, and Consulting capabilities in North India, and had been instrumental in setting up its land transaction vertical on a Pan India basis. Prior to DTZ, Rajeev has worked with reputed organizations such as Reliance Industries, E&Y and Bharti Retail. Immediately prior to joining DTZ, Rajeev successfully led the corporate Finance team at Bharti Retail for a mega joint venture with Wal-Mart. He was also a member of the Real Estate Investment committee at Bharti Retail. Rajeev is an alumnus of IIT Kharagpur and SP Jain Institute of Management, Mumbai.
KEY TRANSACTIONS CONCLUDED Part divestment of a 600,000 sq.ft. retail mall development in Delhi Sale/ Leaseback of 356,000 sq.ft. regional HQ of a large corporate group in NCR Forward sale of a 550,000 sq.ft. IT Park in NCR Identification of development partner for a residential development over a 25 acre
land parcel in Gurgaon Identification of development partner for a residential development over a 27 acre
land parcel in Gurgaon `100 crores private equity fund infusion into a residential project in Gurgaon for a
large developer based out of NCR
14
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
ADVISORY SUPPORT
Saurabh Mehrotra National Director, Advisory saurabh.mehrotra@in.knightfrank.com
Team Lead for Advisory Saurabh would be responsible for quality and timely delivery of the research and advisory component of the assignment
Over 14 Years of work experience across construction projects, financial and risk assessment, valuation and market feasibility. In Knight Frank since 2008, Saurabh currently heads the Advisory team, prior to Knight Frank, he was with ICICI Bank Ltd., as Zonal Technical Manager – North responsible for valuations, financial & risk assessment, due diligence, feasibility, marketability assessment for projects. He has also worked extensively in Gujarat for 2 years for consulting and finance projects.
locations of Gujarat for water pipeline projects. He was also engaged in construction of water treatment plants, elevated storage reservoirs, pumping stations, transmission pipelines and staff quarters. Saurabh holds a Bachelor of Engineering (Civil) degree, after which he has completed an Advance Construction Management course from NICMAR, Pune and an Accelerated General Management programme from IIM, Ahmedabad.
Befoe ICICI Bank, Saurabh was Deputy Manager – Projects in Essar Projects Ltd., where he worked extensively in various
15
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
TRANSACTION TEAM
Vikas Karamchandani Transaction Manager vikas.karamchandani@in.knightfrank.com
Transaction Manager Vikas would be responsible for the onground execution and management of the Bid Process
Vikas Karamchandani is a real estate strategy consulting and capital transactions advisory professional. Currently associated with Knight Frank, Vikas is handling capital transactions across West and South India. He has over seven years of experience in real estate capital markets, land sales, strategy consulting, valuations and research. He has worked across real estate asset classes including Residential, Commercial, Retail, Hospitality, Industrial and Land. He has worked in major sub-markets within India including Mumbai, Pune, Bengaluru, Hyderabad and Chennai.
Prior to Knight Frank, Vikas was part of the founding team for Systematix Capital's Real Estate Advisory business in India for the last three years. Vikas has successfully concluded multiple transactions, including private equity, structured finance, debt syndication & acquisition transactions across South East Asia. Prior to Systematix Capital, Vikas has also worked with IL&FS and Crisil. Vikas is an engineer and a management graduate specializing in finance from Symbiosis Institute of Business Management.
KEY TRANSACTIONS CONCLUDED `300 crores private equity and structured finance for residential project in Chennai `60 crores structured finance for residential project in Bengaluru `50 crores private equity financing for a company in West India `350 crores of M&A transaction for a company in Hyderabad Divestment of 100% equity stake in 6 acre land parcel in Pune – Ongoing
16
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
ADVISORY SUPPORT
S. Ramanujam Lead Consultant – Hyderabad Micro-market s.ramanujam@in.knightfrank.com
Lead Advisor Ramanujam would handle the complete market research and Information Memorandum Preparation
Ramanujam with over 9 years of experience across real estate sector with over 6 years pf consulting experience across real estate multiple asset classes. Currently associated with Knight Frank, Ramanujam is handling the integral part of Research & Advisory business in Knight Frank. He has been involved in different facets of RE Consulting business Optimal Development Plans, Development Feasibility Studies, Project Valuation, Investment Viability Analysis, etc.
Key Clients Handled GMR, Ashok Leyland, Vascon, J P Morgan, HDFC Realty Fund, Cloud Nine Care. He also has hands on experience and possess in-depth market knowledge and has excellent rapport with all the developers and landlords based in Chennai. Ramanujam is a Graduate from University of Madras.
IMPORTANT ASSIGNMENTS Ramky Estates and Farms
Feasibility Study of Entertainment and Residential asset classes for a 600 acre integrated development in South Hyderabad
Everstone
Feasibility study for a residential project spread across 15 acres in Kavadiguda
GMR Hyderabad International Airport Ltd. (GHIAL)
Optimal development Plan for an aerotropolis on 500 acres at Samshabad
Jubilee Hills Landmark Projects
Feasibility Study of Retail and Residential asset classes for a large scale integrated luxury development in Hyderabad
KPMG
Valuation of 280 acre land parcel in Vishakapatnam
Andhra Pradesh State Road Redevelopment plan for eleven bus stations across Hyderabad city Transport Corporation (APSRTC) Grant Thornton, India
Valuation of National Portfolio of real estate assets for a Chennai based Heavy Commercial Vehicle manufacturer
17
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
TRANSACTION TEAM
Dileep Kumar Transaction Support dileep.kumar@in.knightfrank.com
Transaction Support Dileep would be responsible for the onground execution of the Marketing Process�
18
Dileep Kumar possess credible experience of 16 Years in varied sectors of viz; FMCG, Life Insurance & Real Estate (Land transactions). Dileep has been instrumental in successfully gaining sizeable number of land transactions both through Sale & JD during his association with ICICI Property Services and Ideal Mandate in Andhra Pradesh. As part of the assigned portfolio in Knight Frank India, he is responsible for generating Supply, Demand in Land, arrange land for
long lease, Sale and Joint Development in Hyderabad City and Tire- II & Tier III city across the state. His current pipeline transactions amounts to 2 JDA (30 acres), 1 Sale (81 acres) in Hyderabad. Prior to being associated Knight Frank India , Dileep served as a Senior Manager (Land) with Ideal Mandate Real Estate services & ICICI Property Services, Hyderabad. Dileep is a MBA Graduate from Sri Krishna Devaraya University, Anantapur, A.P.
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
backed by local competence Knight Frank India Capital Transactions Group
Occupier Solutions Group
Project Management Services
Research & Advisory
Facilities Management
Residential Agency
Office
Industrial
Retail
Residential
Hospitality
Education
Over 20 million sq.ft. area transacted in last 3 years
Execution of 3000+ valuation reports and 1500+ consultancy assignments
Over 30 million sq.ft. area under management
Capital Transactions over US$300mn. in last 12 months by team
800+ Experts
20
7 Offices in Established Markets
Capabilities to Serve Tier I & II cities
Seamless end-to-end Service delivery
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
INDICATIVE TRACK RECORD RELATIONSHIPS - DEVELOPERS
21
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
INDICATIVE TRACK RECORD RELATIONSHIPS - FUNDS
22
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
INDICATIVE TRACK RECORD RELATIONSHIPS - WEALTH PARTNERS
23
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
INDICATIVE TRACK RECORD RELATIONSHIPS - CLIENTS
Corporate/ ITES
BFSI Industries
24
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
INDICATIVE TRACK RECORD RELATIONSHIPS - CLIENTS
25
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
TEAM'S HYDERABAD LAND TRANSACTIONS Land advisory for outright sale and joint development of land in the Visakhapatnam area. The land parcel admeasured ~4 acres and the transaction size was ~`400mn. Land was acquired by a large Indian developer for developing a commercial project.
Land advisory for outright sale and joint development of land in the Ramachandrapuram area. The land parcel admeasured ~20 acres and the transaction size was ~`250mn. Land was acquired by a large Indian developer for developing budget housing.
Land advisory for joint development of land in the Kakinada area. The land parcel admeasured ~2 acres and the transaction size was ~`250mn. Land was acquired by a large Indian developer for developing a commercial project.
Land advisory for joint development of land in the Raidurg area. The land parcel admeasures ~10 acres and the transaction size is ~`1,500mn. This is an ongoing transaction.
Land advisory for joint development of land in the Rajhamundry area. The land parcel admeasured ~7 acres and the transaction size was ~`200mn. Land was acquired by a large Indian group for their captive use.
Land advisory for outright sale and joint development of land in the Patancheru area. The land parcel admeasures ~80 acres and the transaction size is ~`1,200mn. This is an ongoing transaction.
Land advisory for outright sale of land in the Madinaguda area. The land parcel admeasured ~2 acres and the transaction size was ~`200mn. Land was acquired by a large Indian group for their captive use
Land advisory for outright sale of land in the Tolichowki area. The land parcel admeasured ~25 acres and the transaction size was ~`200mn. This is an ongoing transaction.
28
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
Knight Frank Capital Transactions Group OUR Differentiators Our People
People: Qualified and experiences professionals in Real Estate and Capital Markets
Relationship with Developers and strategic investors
• Team comprising of Corporate Finance & Real Estate experts Experience in closing large sized portfolio level transactions
Key Differentiators Experience in dealing with public limited companies
Quality of people – Capital Markets and Investment Professionals Experience in closing land disposal transactions
• More than 80 man years of PE fund raising, structured finance, land transactions and M&A experience in the team across industries
Our Track Record • Over US$235mn. of Private Equity transactions advised in last 12 months • Team with experience in managing large ticket transactions both in terms of value (>US$500mn.) and in terms of size (>100 acres) • First IPC with established Asset Management track record in India
Our Approach • Investment Banking model rather than the broker model • Research Oriented and Objective • End to End transaction process management
32
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
annexure
33
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
HYDERABAD City Overview
Hyderabad was the only city in India to be included in the list of top 10 Global Sustainable Cities of the world by 2020, in a study conducted by Ethisphere Council, USA, in 2008
The central part of the city constitutes old city areas of the Charminar, Koti, Basheerbagh, Nampally, Himayatnagar etc., while North Hyderabad constitutes areas of Medchal Road (NH-7) connecting to Nagpur, Shameerpet area. In the south areas on Srisailam highway and Bengaluru highway are Shamshabad, Maheshwaram, LB Nagar etc. The western part of Hyderabad comprises Vikarabad Road, Shankarpalli Road, NH-9 towards Mumbai. Gachibowli, Madhapur, Kondapur, Nallgandla constitute the western part of the city. The eastern part of the city comprises State Highways like Vijayawada Highway and Warangal Highway. Uppal and Pocharam are the prominent localities in the eastern part of the city. The city is well connected to other parts of the nation through well laid railway line which cuts through the city. The VaranasiKanyakumari Highway (NH-7) passes through the city to Balanagar, Medchal and another National Highway NH-9 crosses the city to reach Mumbai from Machaipatnam. The international airport is located at Shamshabad in the southern part of Hyderabad. 34
CITY SNAP SHOT Area (sq.km.)
778
Metropolitan Population (mn.)
7.75
City Population (mn.)
6.81
Annual Exponential Population Growth rate (2001-2012)
3%
Density
3%
Average per Capita Income (‘)
253,400
Sex Ratio
954
Major Growth Industries
IT/ ITES, Pharma, Bio Tech
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
Hyderabad Real Estate Overview Hyderabad, also known as the second silicon valley of India, has emerged as an IT/ITeS and biotech destination. It is the administrative, financial and economic capital of the state and is the largest contributor to the state’s GDP. The Hyderabad residential market is primarily driven by the IT/ITeS industry, coupled with the growth of the pharmaceutical industry. Largely an end-user market, Hyderabad has witnessed and extended slump due to prevailing political uncertainties. However, more recently, clarity on the Telangana issue has resulted in the market entering a gradual phase of recovery. Weakened consumer sentiments that affected the market, are now showing signs of recovery over the past 6 months. A number of infrastructure initiatives have also provided the much needed thrust to the residential sector in Hyderabad. Outer Ring Road (ORR) an eight lane expressway being built in the city is currently on the last stretch of development between Shamirpet and Pedda Amberpet.
A large part of the ORR is already operational providing excellent connectivity with the Shamshabad Airport. ORR provides circular connectivity with the city and helps in decongesting the Inner Ring Road and major arterial roads. Hyderabad Metro is also under construction and is expected to improve connectivity further. Phase I of the project will connect Miyapur and LB Nagar, Nagole and Shilparamanam, JBS and Falaknuma. Owing to the new infrastructure developments, the Hyderabad market has evolved in the last decade. Traditionally, residential development was concentrated in Himayatnagar, Kukatpally, Secunderabad and Dilsukhnagar, while premium developments came up in Begumpet, banjara Hills, Jubilee Hills and Merredpally. Limited availability of land has shifted focus to locations such as Kukatpally, Nizampet, Miyapur, Kondapur and Kompally. Locations such as Kukatpally, Nizampet, Miyapur, Kondapur, Kompally and Tolichowki located in close vicinity to the established hubs.
The Western Zone The Western Zone has seen immense development across all segments of real estate. Comprising locations like Kukatpally, Madhapur, Kondapur, Gachibowli, Miyapur, Hitech City and Towlichowki regions, it is the largest contributor to residential absorption in Hyderabad. Demand in this region is end user driven, with majority of the supply catering to the employees of IT firms in
and around Hitech City and Gachibowli. The Western Zone residential micromarket got a boost primarily due to its proximity to workplaces, availability of organised retail developments and supporting infrastructure in the form of connecting railway stations, the Old Mumbai National Highway and ORR providing connectivity to the rest of the city and the airport.
35
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
Recent market activity Despite an extended slowdown, Hyderabad’s residential market is showing signs of recovery. Nearly 8,500 units were launched in H2 FY13, showing an increase of almost 33% compared to H2 FY12. The focus continues to be on the western zone, catering to the demand from the IT/ ITeS sector - which has a
MICRO-MARKET SPLIT OF ABSORBED UNITS H2 FY13 HYDERABAD METROPOLITAN REGION (HMR)
good mix of affordable, mid-segment and high end housing demand from home buyers. The residential sales volume has also gone up by 11% in H2 FY13 compared to H2 FY12. Approximately 8,100 units were absorbed during this period.
QUARTER-WISE WEIGHTED AVERAGE RESIDENTIAL PRICE MOVEMENT - HYDERABAD METROPOLITAN REGION (HMR) 6,000
9%
7%
5,000 4,000 3,000
60%
2,000
9%
0
15% HMR West
HMR Central
HMR East
HMR South
1,000 Q1 FY13
HMR North
Q2 FY13
Q3 FY13
HMR Central
HMR West
HMR North
HMR East
Q4 FY13
HMR South
Source: Knight Frank Research
Source: Knight Frank Research
Residential Price Trends With an increased demand for residential units and absorption levels increasing over 2012 and H1 2013, prices have also started to show an upward trend. While the Central, East, North and South micro-markets have shown an annualized appreciation in the range of 4% - 9%, the West micro-market has achieved CAGR appreciation of about 10% - 12%.
RESIDENTIAL PRICE MOVEMENT IN THE CITY 6,000 5,000 4,000 3,000 2,000 1,000 0 2007 2008 2009
2010
2011
2012 2013*
Central Hyderabad
West Hyderabad
East Hyderabad North Hyderabad
South Hyderabad
Source: Knight Frank Research
36
Proposal FOR Transaction Advisory Services Land Parcel at Hyderabad
Disclaimer “The statements, information and opinions expressed or provided in this publication are intended only as a guide to some of the important considerations that relate to the property sale. Although we believe they are correct and not misleading, with every effort having been made to ensure that they are free from error, they should not be taken to represent, nor are they intended to represent, sales advice or specific proposals, which must always be reviewed in isolation due to the degree of uniqueness that will attach thereto. Neither Knight Frank nor any persons involved in the preparations of this publication give any warranties as to the contents nor accept any contractual, tortuous or other form of liability for any consequences, loss or damage which may arise as a result of any person acting upon or using the statements, information or opinions in the publication. This publication is confidential to the addressee and is not to be the subject of communication or reproduction wholly or in part.�
Contact Details Vikas Karamchandani Transactions Manager +91 88 7934 6998 vikas.karamchandani@in.knightfrank.com Dileep Kumar Transaction Support +91 9701600805 dileep.kumar@in.knightfrank.com Knight Frank (India) Pvt. Ltd., Paville House, Near Twin Towers Off Veer Savarkar Marg, Prabhadevi, Mumbai 400 030, India 37