knightfrank.co.in/researchH2 2023 Knight Frank’s ultimate guide to the India real estate market performance and
opportunities in the world’s most exciting subcontinent.
India
Real Estate
Residential and Office Market - July - December 2023
www.knightfrank.co.in/research
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Contents
All India
Ahmedabad
Bengaluru
Chennai
Hyderabad
Kolkata
Mumbai
NCR
Pune
04
14
22
30
38
46
54
62
70
Foreword
With the pandemic almost completely in the rear-view mirror, 2023 was expected to see the
beginning of a sustained global economic recovery. However, unrest in the geopolitical environment
caused by the conflicts in Eastern Europe and West Asia and the persistently high inflation
continued to weigh on the global economic environment. While the Indian economy has not been
completely insulated from the economic turbulence, timely interventions by the Reserve Bank of
India (RBI) and the Government have ensured that inflation has not spiraled out of control and the
economy has stayed on the growth path.
The 7.6% GDP growth in Q2 2023 (July – September 2023) has exceeded expectations, and the RBI’s
recently upgraded forecast of 7% for FY 2024 ensures that India continues to be a bright spot in a still
uncertain global economic environment. This undercurrent of economic stability and growth is also
reflected in the strong performance of the Indian real estate markets.
The office market, which could have been impacted by the geopolitical challenges, stayed resilient,
recording a stellar performance in 2023, just shy of the peak reached in 2019. Having said that, these
globally impactful events have changed in characteristics of the market. Based on the economic
growth and stability and changes in the attitude of corporations, Global Capability Centres (GCC)
and India facing businesses claimed centerstage to capitalize on the unique and substantial
growth opportunity that the country presents. The rising confidence in the improving economic
fundamentals of the country has spurred occupiers to make longer term commitments in the office
market.
The increasing participation of a more diverse occupier group across various markets marks a
significant milestone in the evolution of the Indian office market. We saw more office markets
reaching and indeed breaching the 10 mn sq ft mark this year. The growth was backed by a
significant improvement in office occupancies which is expected to continue both in India and
globally.
The residential market has continued from strength to strength with demand scaling 10-year highs
while the headline demand numbers convey a story of steady and resilient growth, their underlying
components are changing radically. The significant shift toward premiumization has taken root in
the residential market which can be seen as a concurrent trend across markets.
I invite you to read the 20th edition of Knight Frank India’s flagship half-yearly report – ‘India Real
Estate H2 2023,’ which tracks the ongoing developments that have impacted the residential and
office segments across the top 8 cities. I hope that you will find it insightful and interesting.
Shishir Baijal
Chairman and Managing Director
INDIA REAL ESTATE - INDIA
India
INDIA MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
20000
38000
56000
74000
92000
110000
128000
146000
164000
182000
200000
473,511 5.9
Unsold inventory (housing units) H2 2023
Quarters to sell (in quarters) H2 2023
5%
16.1
Change (YoY)
Age of unsold inventory (in quarters) H2 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
350,746 7% 177,382 6%
Sales
(housing units)
329,097 5% 172,457 15%
LAUNCHES AND SALES TREND NO. OF UNITS
117,200
126,616
126,865
141,341
107,120
135,016
68,702
109,159
62,738
40,832
91,739
89,509
111,175
129,285
112,150
116,576
60,489
59,538
86,139
94,997
103,238
99,416
129,144
133,487
160,806
158,705
167,323
153,952
173,364
156,640
177,382
172,457
120,755
107,316
124,288
118,040
INDIA REAL ESTATE - INDIA
• As we move away from the pandemic, all
categories of real estate assets have undergone a
recovery, with the residential sector experiencing
the swiftest and most significant resurgence.
The heightened need for security and open living
spaces during the pandemic fueled a demand
for homes, bolstered further by exceptionally low
interest rates and comparatively affordable property
prices. 2023 was widely anticipated as a year of
sustained global recovery, with the pandemic in the
rear-view mirror and improving economic growth.
However, unforeseen challenges such as the war in
Ukraine and Israel and their extensive geopolitical
repercussions, coupled with persistent inflation,
posed a threat to global economies, threatening to
derail the strong recovery in the Indian real estate
markets as well.
• As central banks respond to inflationary pressures
by elevating policy rates and causing mortgages
to become more costly, momentum in global
residential markets has moderated following the
initial rebound in 2023. Nevertheless, in contrast
to the Reserve Bank of India’s cumulative increase
of 250 basis points in policy rates between
May 2022 and February 2023, the demand for
residential properties in the country not only
displayed resilience but also surged to a ten-year
high in terms of annual sales in 2023. Incidentally,
H2 2023 also saw the highest sales volumes
generated in a half-yearly period in ten years.
• Increased savings during lockdowns, minimal
income disruptions in mid and high-income
brackets, and a robust economic growth forecast
have fueled demand in the residential real estate
market in India. Besides, a house price growth trend
since 2021 has also created a feel-good factor
for prospective buyers, further helping the cause
of sales. The 0.17 mn units sold during H2 2023
constitute a healthy 12% YoY growth in volume and
was instrumental in pushing the annual sales tally
to a 5% higher level in 2023.
• The resurgence in demand has also put residential
development into overdrive with the half-yearly as
well as annual volume of units launched reaching
ten-year highs. In fact, launch volumes in 2022
and 2023 have exceeded that of sales for the
respective periods and notably, these are just two
of the three years when this has occurred over the
past ten.
• Demand momentum was strong in H2 2023 with
sales growing on a YoY basis across all markets.
Among the larger markets, Pune saw the most
sales growth at 28% YoY while Mumbai, NCR and
Bengaluru constituted 60% of the total sales during
the period.
• The share of annual sales in the <INR 5 mn ticket
size price segment has reduced from 45% in
2020 to 30% in 2023. Conversely, during the same
reference period, the share of sales in the INR 5-10
mn and >10 mn ticket-size categories grew from
35% to 37% and 20% to 34% respectively. The
higher income segments were not as impacted
by income disruptions caused by pandemic
exigencies as was initially expected. Besides, the
high savings rate due to the initial weak sentiments
and lockdown periods played their part in fueling
the current wave of demand.
• The mid and premium categories similarly
outperformed the affordable segment in absolute
sales growth over the past few years. The premium
segment with home prices over INR 10 mn has
been the standout performer with an annual
sales growth of 33% YoY in 2023 and a more
pronounced 49% YoY growth in H2 2023. While
sales growth in the mid segment was close to
market averages in annual and half yearly terms,
that of the affordable segment proved to be the
only drag on the market, falling by 16% YoY in 2023
and by 10% in H2 2023.
• Developers have been ahead of the curve and
judged the shifting preferences of the market by
launching lifestyle-oriented premium products. The
share of the number of units launched in the INR
5-10 mn and >10 mn ticket-size categories grew
from 28% to 37% and 15% to a significant 40%
respectively.
• As discussed earlier, while sales growth has been
strong, the volume of launches has exceeded that
of sales significantly causing unsold inventory
levels to rise by 5% YoY. And as overall market
traction has shifted toward the mid and premium
segments, so has that of the unsold inventory.
Both these segments have seen unsold inventory
levels rise more than the market average, with
the mid segment inventory level rising by 6% YoY
and that of the premium segment increasing by a
substantial 33% YoY.
• While the rising inventory levels can seem like a
matter of concern when viewed in isolation, it must
be seen in conjunction with the sales velocity to
depict a more accurate picture of market health.
The Quarters to Sell (QTS) level is a metric that
enables this by calculating the number of quarters
required by the market to exhaust existing inventory
levels at the sales velocity of the trailing eight
quarters. Generally, a lower QTS level denotes
greater sales traction and better market health.
The QTS level for the eight markets has been
consistently falling despite growing inventory
levels from 8.7 in H2 2020 to the 5.9 quarters (less
than 18 months) in H2 2023 and depicts a market
with improving fundamentals despite increasing
inventory.
• While the overall market remains in good health,
we have gone a level deeper to assess the state
of the market in the ticket-size segments that we
track. While unsold inventory levels in the affordable
category have dropped 8% YoY in H2 2023, the
QTS level is higher than the market average at 7.4
quarters, just shy of two years and still not very high.
And the converse is true for the mid and premium
segments which stand at 5 and 5.3 quarters
respectively, despite the significant increases in
unsold inventory levels for both segments.
• While sales volumes have been robust in H2 2023,
prices have also grown in the range of 4% to 11%
across all markets with Mumbai and Bengaluru
growing by 7% each and the NCR and Pune at 6%
YoY and 5% YoY respectively. This is the fourth
consecutive half-yearly period of price growth
across all markets.
• The residential market continues to move from
strength to strength with market sales volumes
at a ten-year high without any significant impact
on underlying fundamentals. Sales levels were
not materially dented by concerns over growing
inflation, high interest costs or slowing economic
growth. The industry continues to consolidate with
residential developments steadily shifting into the
hands of stronger developers who have been able
to weather the economic storm created by the
pandemic. While ready inventory remains a strong
preference for homebuyers, established developers
with a robust execution record are increasingly
finding a market for their under-construction
inventory. Economic momentum continues to be
strong with the GDP growing at 7.6% YoY in Q2
2023 (Q1 FY 2024) and should sustain homebuyer
sentiment as the market steps into 2024.
INDIA REAL ESTATE - INDIA
H2 2022
H2 2023
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
<5 mn 5-10 mn
>10 mn
35%
37% 28%
37%
35%28%
SALES LAUNCHES
H2 2023 (YoY change) 2023 (YoY change) H2 2023 (YoY change) 2023 (YoY change)
Mumbai 46,073 (12%) 86,871 (2%) 42505 (-1%) 93051 (3%)
NCR 29,888 (2%) 60,002 (3%) 32911 (-5%) 62649 (-1%)
Bengaluru 27,799 (4%) 54,046 (1%) 27584 (24%) 51126 (18%)
Pune 27,596 (28%) 49,266 (13%) 21203 (0%) 42437 (10%)
Hyderabad 17,525 (7%) 32,880 (6%) 24134 (7%) 46985 (7%)
Ahmedabad 8,131 (39%) 16,113 (15%) 11941 (15%) 22497 (8%)
Chennai 7,770 (6%) 14,920 (5%) 8150 (4%) 16272 (6%)
Kolkata 7,675 (32%) 14,999 (16%) 8954 (59%) 15730 (28%)
All India 172,457 (12%) 329,097 (5%) 177382 (6%) 350746 (7%)
RESIDENTIAL LAUNCHES AND SALES
Source: Knight Frank Research
Mid-segment sales
Premium segment sales
H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
INDIA REAL ESTATE - INDIA
Ticket-size
segment
Unsold Inventory (housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 199,742 (5%) 7.4
5 – 10 mn 144,458 (6%) 5.0
>10 mn 129,313 (33%) 5.3
Source: Knight Frank Research
329,097
Ten-year high in annual sales in 2023
RESIDENTIAL MARKET HEALTH RESIDENTIAL PRICE MOVEMENT
City
Unsold inventory
(YoY change)
QTS
Mumbai 165,395 (4%) 7. 7
NCR 103,605 (3%) 7.0
Bengaluru 53,479 (-5%) 4.0
Hyderabad 45,505 (45%) 5.7
Pune 39,214 (-15%) 3.4
Ahmedabad 29,361 (28%) 7. 8
Kolkata 21,417 (4%) 6.1
Chennai 15,536 (10%) 4.3
All India 473,513 (5%) 5.9
Source: Knight Frank Research Source: Knight Frank Research
City
H2 2023 in
INR/sq m (INR/sq ft)
12 month change
6 month
change
Mumbai 84,849 (7,883) 7% 4%
NCR 51,226 (4,759) 6% 3%
Bengaluru 63,508 (5,900) 7% 5%
Pune 48,515 (4,507) 5% 3%
Chennai 48,137 (4,472) 4% 3%
Hyderabad 59,740 (5,550) 11% 3%
Kolkata 38,632 (3,589) 7% 5%
Ahmedabad 32,620 (3,031) 4% 1%
INDIA REAL ESTATE - INDIA
The Knight Frank Affordability Index that tracks the EMI (Equated Monthly Instalment) to income ratio for households, has begun to show
some improvement after the brief decline in affordability levels seen in 2022. The better-than-expected economic momentum has
spurred the GDP to rise by 7.6% in the June quarter; and which in concurrence with the inflation levels reined in within the tolerance band
of the central bank, has caused income levels to rise enough to offset the rise in prices and interest rates.
While affordability levels have improved marginally, Mumbai is the only city beyond our affordability threshold of 50%, a level exceeding
which banks rarely underwrite a mortgage. Ahmedabad remains the most affordable housing market in the country with an affordability
ratio of 21% which implies that on an average a household in Ahmedabad needs to spend 21% of its income to pay EMI for a housing
loan. Ahmedabad was followed by Pune and Kolkata at 24% each in 2023.
While marginally better than last year, affordability levels across cities also stand significantly improved than those existing in pre-
pandemic 2019. For instance, in NCR, the affordability index improved from 34% in 2019 to 27% in 2023, while for Bengaluru, it improved
from 32% in 2019 to 26% in 2023. With inflation levels expected to remain at 5.4% in FY 2024 and the GDP growth for the same period
forecasted at 7%, affordability levels are expected to further improve in the following year as the tailwinds of home loan interest rate cuts
help the cause.
Knight Frank
Affordability Index
INDIA REAL ESTATE - INDIA
Mumbai
NCR
Bengaluru
Pune
Chennai
Hyderabad
Kolkata
Ahmedabad
2022
2010
2023
2021
1. Calculated as EMI/INCOME ratio
2. City-wide average affordability statistics cannot highlight disparities in housing costs within sub-markets or across the income spectrum.
Source: MOSPI, Knight Frank Research
METHODOLOGY
The Knight Frank Affordability Index indicates the proportion of income that a household requires to fund the monthly instalment (EMI) of a housing unit in a particular city. So, a
Knight Frank Affordability Index level of 40% for a city implies that on an average, households in that city need to spend 40% of their income to fund the EMI of a housing loan
for a unit. An EMI/ Income ratio of over 50% is considered unaffordable as it is the limit beyond which banks rarely underwrite a mortgage.
ASSUMPTIONS
• EMI, housing unit size and price/sq ft represent city-level averages.
• Loan Tenure – 20 years
• Loan to Value – 80%
• Home Loan Interest Rate – Median MCLR of all scheduled commercial banks with 40 bps spread
• Area of Housing Unit: House sizes are fixed for each city across the years but vary within different cities taking into account the average size preference for each city.
• Housing Price: Median housing price for that city.
93%
52%
53%
51%
53%
28%
29%
27%
48%
26%
27%
26%
39%
24%
25%
24%
24%
51%
27%
25%
47%
28%
30%
30%
45%
25%
25%
24%
46%
20%
22%
21%
INDIA REAL ESTATE - INDIA
India Office Market
INDIA MARKET SUMMARY
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 3.98 (42.9) -13% 2.31 (24.8) -2%
Transactions
in mn sq m (mn sq ft) 5.53 (59.6) 15% 3.11 (33.4) 27%
85.69 (922.4) 16.1%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy
6%
94
2023 Change (YoY)
2023 Change (YoY)
Basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.
5
1.0
1.5
2.
0
2.5
3.
0
3.5
4.
0
INDIA OFFICE MARKET ACTIVITY MN SQ M
1.54
1.75
2.09
2.23
1.87
1.99
1.04
1.94
1.90
1.289
1.70
1.95
2.22
2.55
3.48
3.08
1.71
1.60
1.59
2.06
1.39
1.14
2.20
2.40
2.24
2.35
2.35
2.45
1.67
2.43
2.31
3.1 1
1.81
2.18
2.02
2.40
INDIA REAL ESTATE - INDIA
• With the pandemic almost completely in the
rear-view mirror, 2023 was expected to see
the beginning of a sustained global economic
recovery. However, unrest in the global geopolitical
environment caused by the Russia - Ukraine
and Israel - Palestine wars and persistently high
inflation continued to weigh on the global economic
environment. While the Indian economy has not
been completely insulated from the economic
turbulence, timely interventions by the Central Bank
and the Government have ensured that inflation
has not spiraled out of control and the economy
has stayed on the growth path. The 7.6% GDP
growth in Q2 2023 (Q1 FY 2024) has exceeded
most expectations, and the RBI’s recently upgraded
forecast of 7% for FY 2024 ensures that India
continues to be a bright spot in a still uncertain
global economic environment. This undercurrent
of economic stability and growth is also reflected
in the relatively strong occupier activity seen in the
Indian office market.
• India’s growing stature as the largest democracy
with long term growth prospects of a stable market
for products and services across categories, makes
it one of the most attractive destinations to set up
businesses. The government’s exemplary handling
of the pandemic, the central bank’s success
in controlling inflation while supporting growth
and even the precise execution of the incredibly
complex Chandrayaan mission have been a clarion
call to the world at large that India is one of the
leaders among growth centers across the globe.
• Occupier sentiments have improved steadily in
2023 with cumulative transaction volumes across
the eight markets under our coverage increasing
progressively over the four quarters of the year. The
year ended within striking distance of the historic
highs in terms of annual transacted volumes with
5.53 mn sq m (59.6 mn sq ft) taken up in 2023. The
year ended on a strong note with H2 2023 seeing
transaction volumes of 3.11 mn sq m (33.4 mn sq
ft) which constitutes a healthy 15% growth in YoY
terms and incidentally also marks H2 2023 as
the half-yearly period with the highest transacted
volume since 2012.
• Transaction volumes in all markets grew in YoY
terms except for Bengaluru whose 1.16 mn sq m
(12.5 mn sq ft) tally in 2023 constitutes a 14% YoY
drop. This can be largely attributed to some extent
to the slowdown in demand from the Technology
sector but it must be noted that transaction
volumes during the base year of 2022 were
extraordinarily high and the volumes seen in 2023
are still in line with Bengaluru’s longer term average.
The Chennai market was the biggest outperformer
with 10.8 mn sq ft of office space being transacted
there during the year, a 92% growth in YoY terms.
The surge in demand from Global Capability
Centers (GCC) which accounted for 56% of the
transacted area was the primary driver of this spike
in volumes.
• While the overall transacted volume has been on
a steady uptrend, its underlying constituents have
changed substantially over time. Third party IT
services have been a prominent demand driver of
office space demand previously but India facing
businesses have been anchoring demand in
recent years due to a strategic business need to be
aligned with the growing Indian market. India facing
businesses accounted for 37% of the total volume
transacted during 2023, just shy of the 39% in
2022. The share of third party IT Services has
dropped from 16% to 11% in the same reference
period.
• With business sentiments improving and
uncertainties reducing steadily, occupiers are
more inclined to make longer term commitments
to the workplace by signing long-term leases.
The need for flexibility of tenure is not as intensely
felt as compared to a year ago when flex spaces
accounted for 19% of the total transacted
volumes relative to the current 17% in 2023. This
phenomenon is more visible in H2 2023 where
flex space operators took up just 11% of the total
transacted area compared to twice or 22% in H2
2022. However, it must be noted that H2 2023
is the first half-yearly period in which we have
observed a significant drop in the share of flex
spaces. The premise of a workplace specialist who
enhances employee productivity remains strong
and it needs to be seen if this drop in share is just a
temporary pause as the market consolidates or part
of a longer-term trend reversal.
• While India has always been known for its high
quality and low-cost human resource pool, the
need for friend-shoring and the China+1 trend, has
intensified strategic corporate investments in India.
The nature of work executed out of Indian offices
has also undergone a vast change over the years.
While Third party outsourcing centres were set up
initially to primarily manage processing activities
to capitalise on the cost arbitrage offered by the
Indian markets, Indian operations have now moved
up the value chain and actively contribute to the
organisation’s core business and are an integral
part of its growth strategy. This also reflects in the
nature of office space being demanded, which is of
higher quality and comes with a greater occupier
commitment on lease tenure and investment in the
workspace.
• The increasing confidence in the country’s
economic stability has substantially increased
corporate investments in setting up GCCs in India
and this is reflected in the growing share of GCCs
in the total transacted area. Their share has grown
substantially from 25% in 2022 to 35% in 2023. In
fact, the GCC category is the only one which has
grown in terms of market share among the four
end-use categories tracked by us.
• Completions have been comparatively subdued
as development interest is largely focused on
residential projects due to the relatively steeper
increase in sales and prices in the residential
market. 3.98 mn sq m (42.9 mn sq ft) of office
space were completed in 2023, 2% lower than
a year ago. The second half of the year was
comparatively better with 24.8 mn sq ft getting
delivered, constituting a 7% YoY growth.
• Rent levels have firmed up well across all markets
over the course of the year. This is the third
half-yearly period when rents have either grown
or remained stable across all markets. Despite
not having its best year in terms of transaction
volumes, rent growth has been strong in Bengaluru
at 7%. Among the other large markets, rent levels in
Mumbai, NCR and Chennai have grown at 4%, 2%
and 6% respectively.
• The sustained surge in office demand throughout
2023 despite the volatile global economic
environment underscores the positive business
sentiment that exists in the country today. The
physical occupancy level has also been steadily
increasing across markets and is being reported at
57% - 65% levels in the REIT portfolios, compared
to 47% - 55% last year. Remote working had never
really taken root in the Indian office space market
with some exceptions in Technology dominated
markets and almost all other sectors have reverted
to a full-time office environment, quite unlike the
scenario in most leading markets in the west. Given
that the inflation level is currently well within the
upper tolerance band of the RBI, it is likely that the
central bank will take a more assertive stance to
support growth and consider lowering the repo rate.
Besides, the signals of upcoming interest rate cuts
by the US Fed will pave the way for greater capital
flows to markets like India. These factors should
further galvanise office market fundamentals as the
market steps into 2024.
INDIA REAL ESTATE - INDIA
INDIA OFFICE MARKET VACANCY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0
16.7%
15.6%
15.1%
13.4%
12.4%
11.6%
12.9%
13.0%
12.6%
13.1%
14.2%
15.4%
16.6%
17.2%
17.0%
17.1%
16.1%
16.4%
Source: Knight Frank Research
38%
14%
22%
26%
38%
9%
11%
42%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
H2 2022
H2 2023
Notes:
1. India Facing: These refer to such transactions whose lessees/ buyers are busi-
nesses which have an India focused business. I.e: no export or import.
2. Third party IT services: These refer to transactions whose lessees/ buyers are
focused on providing IT and IT enabled services to offshore clients. They service
multiple clients and are not necessarily owned by any of their clientele.
3. Global Capability Center (GCC): These refer to transactions whose lessees/
buyers are focused on providing various services to a single offshore company.
The offshore company has complete ownership of the entity that has transacted
the space.
4. Flex space: These refer to transactions by companies that specialise in providing
comprehensive office space solutions for other businesses along with the
benefits of flexibility of tenure, extent of services provided and the ability to scale
higher or lower as required.
On December 06, 2023, the Union Ministry of Commerce and Industry
amended the Special Economic Zones (SEZ) rules 2006. The new
amended rules now allow the Board of Approval, on request from a
developer of an IT or ITES SEZ, to permit the demarcation of a portion
of the built-up area within an SEZ unit on a floor-by-floor basis as a
non-processing or non-SEZ area. In simple terms, the Government
has allowed SEZs to lease space partially or in terms of floors, allowing
operators of office parks across the country to increase occupancy of
their properties.
If we look at the data, since the time direct tax breaks were removed for
new SEZ units in March 2020, it became less attractive for tenants and
vacancies increased. About 170 mn sq ft of ready IT SEZ office space is
available across the top six cities in India, and around 20% (over 30 mn sq
ft) is still vacant.
This new amendment could lead to an increase in demand for office
spaces in such properties and benefit the developers building IT/
ITES SEZs and it would also allow domestic tariff area suppliers to get
the benefit by being in the same buildings as their SEZ clients. The
Government’s decision to allow the demarcation of non-processing areas
in IT/ITES SEZs is a significant step that will benefit the developers and
create more jobs. The real estate industry has heartily welcomed this
move, and it is expected to have a positive impact on the commercial real
estate sector in India.
INDIA REAL ESTATE - INDIA
Source: Knight Frank Research
Source: Knight Frank Research
OFFICE TRANSACTIONS AND COMPLETIONS
OFFICE TRANSACTIONS
OFFICE COMPLETIONS
H2 2023 2023 H2 2023 2023
Mumbai 0.39 (4.2) (23%) 0.69 (7.4) (16%) 0.16 (1.7) (67%) 0.28 (3.1) (52%)
NCR 0.47 (5) (4%) 0.94 (10.1) (14%) 0.28 (3.1) (-43%) 0.65 (7) (-11%)
Bengaluru 0.51 (5.5) (-19%) 1.16 (12.5) (-14%) 0.65 (7) (-29%) 1.24 (13.4) (-14%)
Pune 0.41 (4.4) (54%) 0.62 (6.7) (9%) 0.1 (1.1) (-36%) 0.34 (3.6) (-46%)
Ahmedabad 0.12 (1.3) (44%) 0.17 (1.8) (-15%) 0.16 (1.7) (1293%) 0.18 (1.9) (34%)
Chennai 0.58 (6.3) (82%) 1 (10.8) (92%) 0.4 (4.3) (212%) 0.61 (6.6) (49%)
Hyderabad 0.55 (5.9) (68%) 0.82 (8.8) (32%) 0.49 (5.3) (-12%) 0.61 (6.5) (-42%)
Kolkata 0.08 (0.8) (45%) 0.13 (1.4) (20%) 0.08 (0.08) (-) 0.08 (0.8) (332%)
Total 3.11 (33.4) (27%) 5.53 (59.6) (15%) 2.31 (24.8) (-2%) 3.98 (42.9) (-13%)
MARKETWISE RENTAL MOVEMENT
Rental value range in H2 2023 in
INR/sq m/month (INR/sq ft/month)
12-month change 6-month change
Mumbai 1,227 (114) 4% 2%
NCR 917 (85) 2% 2%
Bengaluru 930 (86) 7% 4%
Pune 791 (74) 2% 2%
Ahmedabad 450 (42) 4% 1%
Chennai 700 (65) 6% 6%
Hyderabad 705 (66) 1% 0%
Kolkata 414 (39) 11% 1%
INDIA REAL ESTATE - AHMEDABAD
Ahmedabad
AHMEDABAD MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
2,000
4,000
6,000
8,000
1
0,000
12,
000
14,
000
29,361 7.8
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
28%
7. 3
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
22,497 8% 11,941 15%
Sales
(housing units)
16,113 15% 8,131 39%
Average price in
INR/sq m (INR/sq ft)
INR 32,620 (INR 3,031) 5% - -
LAUNCHES AND SALES TREND NO. OF UNITS
8,062
7,751
7,491
9,075
8,809
8,556
5,200
7,400
1,874
2,916
1,323
2,844
3,398
8,212
8,089
8,501
2,627
2,520
4,745
3,986
6,226
4,208
8,422
4,703
10,385
8,197
10,424
5,865
10,556
7,982
11,941
8,131
7,941
7,800
8,087
8,101
INDIA REAL ESTATE - AHMEDABAD
• Historically, Ahmedabad has stood out as the
most cost-effective market among the leading
eight cities under our coverage. This distinction
can be largely attributed to the government’s
urban planning efforts aimed at accommodating
the city’s expanding population. Since 2006, the
municipal area of the city has expanded from 186
sq km to its present 466 sq km. This expansion has
played a crucial role in maintaining an equilibrium
between population growth and the city’s built-up
area. Ahmedabad has substantially succeeded in
avoiding the high congestion often seen in the city
centers of other Indian cities, while also steering
clear of low-density sprawl in its outskirts.
• The residential market in Ahmedabad has
rebounded and grown consistently from the lows
experienced during the pandemic as improving
homebuyer sentiments drove sales volumes.
Supply levels have also surged significantly as
developers seized the opportunity to capitalize on
the renewed demand. They aggressively launched
projects featuring larger areas and enhanced
amenities while raising prices, as homebuyer
demand remained strong.
• With the robust recovery in demand and prices
seen over the past two years, it remained to be
seen if market momentum continued in 2023.
Sales levels continued their run with 16,113 units
sold during the year, a healthy 15% higher than
the levels seen a year ago. The Ahmedabad
homebuyer remained resolute despite interest
rates rising to pre-pandemic levels and residential
prices reaching new highs.
• While demand growth has been healthy, developers
have launched new lifestyle-oriented products with
better amenities and larger areas, to tap into this
rich stream of demand. 22,497 units were launched
during 2023 representing an 8% growth over
2022. Just as sales volumes ended the year on a
strong note growing by 39% YoY in H2 2023, the
residential units launched during the second half
of 2023 grew by 15% YoY to 11,941 units during the
period.
• The state government’s encouragement to the
development of skyscrapers by increasing FSI
limits in the city have resulted in an increasing
number of such projects being launched, especially
along the SG Highway. These products are priced
significantly higher than the average residential
project, due to the greater cost of construction and
in equal measure due to the highly elevated prices
at which the land parcels were acquired. This is a
significantly differentiated premium/luxury product
offering compared to what the market has been
used to. The response has been encouraging thus
far and will be tested further in times to come.
• The demand for plotted developments had spiked
in the aftermath of the pandemic as the need for
large open living spaces intensified. This trend has
subsided substantially as we move further away
from the pandemic and normalcy resumes, and
sales conversions occur at prices that offer better
value.
• By virtue of having the lowest per square foot
residential prices among the leading eight markets,
Ahmedabad has always had the bulk of sales occur
in the affordable category of INR 5 mn and below.
This appears to have changed decisively in H2
2023 with the macro trend, of increasing sales in
the mid and premium category catching up with
those in the affordable segment, gaining ground
in Ahmedabad as well. H2 2023 marks the first
half-yearly period in which sales in residential units
priced at INR 5 mn and below constituted less
than half of the total sales. 48% of the sales in H2
2023 occurred in the affordable category while the
share of sales in the mid and premium segments
gained 6 percentage points each compared to H2
2022, to constitute 36% and 16% of the total sales
respectively.
• Market traction in the affordable category has
gradually lost momentum with sales growth
being less than the market average, and fresh
development activity de-growing by 28% YoY in H2
2023. In another first for the market, the share of
the units launched in the affordable category was
eclipsed by that of the mid segment in H2 2023.
• The affordable category currently constitutes over
half of the unsold inventory in the market. While
total unsold inventory levels have increased by
28% YoY, the market still holds less than two years
of inventory, a level which has remained steady
over the past two years. Development activity in
recent periods has been concentrated in the higher
ticket sizes in anticipation of heightened sales and
has exceeded sales in these categories causing
a buildup of inventory levels. This has caused the
QTS levels in the mid and premium segments to
remain elevated, above the market average QTS
level of 7.8 quarters.
• The QTS level is a quantification of the number of
quarters required by the market to absorb existing
inventory at the current rate of sales, and a lower
QTS level signifies a better state of health. While
the QTS in the affordable category is lower than
that of the other segments, this is attributed to the
substantial reduction in inventory in the segment
rather than an actual improvement in market
fundamentals. And, while the QTS levels of the mid
and premium categories are higher, they remain
well under three years of sales and do not signify
signs of weakness.
• The Ahmedabad Municipal Corporation usually
reserves 40% of the total town planning area
for roads, public utilities and other infrastructure.
However, the city civic body’s town planning (TP)
and estate management committee decision to
approve TP Scheme 32 at Shahwadi-Behrampur
with a 25% reduction could set an undesirable
precedent leading to congested development
in the city. Nonetheless, high affordability,
comparatively lower prices per square foot, and
an improving local economic environment remain
compelling drivers for the Ahmedabad residential
real estate market and should help support market
volumes in the following year.
MICROMARKET CLASSIFICATION
Micro market Locations
Central Paldi, Vasna, Navrangpura, Maninagar, Dudheshwar, Ambawadi
East Naroda, Vastral, Nikol, Kathwada Road, Odhav
North Gota, New Ranip, Tragad, Chandkheda, Motera
South Narol, Vatva, Vinzol, Hathijan
West SG Highway, Prahlad Nagar, Bopal, Thaltej, Science City Road
Source: Knight Frank Research
INDIA REAL ESTATE - AHMEDABAD
H2 2022
H2 2023
26% 28%
30% 26%
23% 23%
11% 13%
10% 10%
37% 32%
25% 27%
19% 18%
10% 13%
9% 9%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
AVERAGE RESIDENTIAL PRICE MOVEMENT
INR/SQ M
<5 mn 5-10 mn
H2 2022
H2 2022
>10 mn
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
33,000
32,000
31,000
30,000
29,000
28,000
27,000
26,000
28,376
29,386
29,684
29,816
29,816
30,354
30,354
30,570
30,677
31,173
30,085
30,215
30,161
30,139
31,000
31,216
32,367
32,620
Ticket-size
segment
Unsold Inventory (housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 15,258 (6%) 7. 3
5 – 10 mn 9,922 (48%) 8.1
>10 mn 4,182 (118%) 9.3
North North
West West
East East
Central Central
South South
Source: Knight Frank Research
Source: Knight Frank Research
60%
30% 10%
16%
36%48%
29,361
Unsold inventory (housing units) H2 2023
INDIA REAL ESTATE - AHMEDABAD
Source: Knight Frank Research
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central
Ambavadi 64,000-70,000(5,950-6,500) 5% 1%
Navrangpura 56,000-66,000 (5,200-6,200) 4% 2%
East
Nikol 28,000-35,500 (2,600-3,300) 4% 2%
Vastral 26,000-31,200 (2,400-2,900) 3% 1%
North
Chandkheda 28.000-37,000 (2,600-3,400) 4% 2%
Motera 37,600-45,600(3,500-4,200) 4% 2%
South
Aslali Circle 18,300-21,600 (1,700-2,000) 4% 2%
Vatwa 19,400-24,800(1,800-2,300) 3% 2%
West
Bopal 35,500-44,200 (3,300-4,200) 4% 3%
Prahlad Nagar 59,200-61,500 (5,500-5,800) 5% 1%
MICROMARKET HEALTH
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central 3,496 (6%) 7.1
East 4,235 (28%) 5.4
North 8,114 (71%) 7.1
South 3,644 (8%) 10.0
West 9,873 (20%) 9.9
Source: Knight Frank Research
INDIA REAL ESTATE - AHMEDABAD
Ahmedabad Office Market
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.18 (1.9) 34% 0.16 (1.7) 1,293%
Transactions
in mn sq m (mn sq ft) 0.17 (1.8) -15% 0.12 (1.3) 44%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 450 (41.8) 4.2% - -
3.47 (37.4) 41.4%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy
5%
137
2023 Change (YoY)
2023 Change (YoY)
Basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.00
0.0
5
0.10
0.15
0.
20
0.25
0.
30
AHMEDABAD OFFICE MARKET ACTIVITY MN SQ M
0.06
0.05
0.07
0.03
0.06
0.07
0.10
0.02
0.21
0.06
0.08
0.20
0.25
0.05
0.21
0.09
0.24
0.05
0.23
0.08
0.10
0.04
0.13
0.07
0.12
0.12
0.01
0.08
0.02
0.05
0.16
0.12
0.10
0.03
0.04
0.05
INDIA REAL ESTATE - AHMEDABAD
• Annual transaction volumes in the Ahmedabad
office market had ranged between 1-1.5 mn sq
ft until the pandemic era. However, the past two
years have seen the market achieving significantly
higher volumes. Its increasing stature as a growing
economic hub with the establishment of the
International Financial Services Centres Authority
(IFSCA) in 2020 and the active support received
from the state and central governments are playing
an important role in improving business dynamics
in this budding office market.
• 2023 ended on a strong note with H2 2023
achieving the highest volumes ever seen in a
half yearly period. 0.12 mn sq m (1.3 mn sq ft)
were transacted during H2 2023, a 44% growth
compared to the previous period. While annual
transaction volumes have comfortably exceeded
the levels seen before the pandemic, the 0.17 mn
sq m (1.8 mn sq ft) transacted in 2023 was 15%
lower than the record high for annual transacted
volumes achieved in 2022.
• Despite the substantial vacancy in the Ahmedabad
office market, the dearth of available space in
the highly sought after locations between CG
Road and SG Highway kept transaction levels
suppressed in the first half of the year. The
Ahmedabad office market is also unique in terms
of the high investment interest which does not lead
to occupancy. The vacancy level seems to have
peaked and trended down to the current 41% level
at the end of H2 2023.
• The relative dearth of quality supply in these
locations was addressed substantially in H2 2023
as 0.16 mn sq m (1.7 mn sq ft) of office space
came online on SP Ring Road, Bopal Ambli Road,
Vastrapur and Sindhubhavan. This was a significant
driver for the record volumes seen in the second
half of the year. Most of the area transacted during
the period occurred in Q4 2023 at 0.1 mn sq m (1.1
mn sq ft), which incidentally, was also the highest
quarterly transacted volume achieved by the
market.
• Occupier activity continued to be concentrated in
CBD West with locations like Vastrapur, Prahlad
Nagar, Sindhubhavan and SG Highway accounting
for 87% of the total area transacted during the
period. The comparatively higher grade of office
spaces being developed here along with the
growing infrastructure has continued to attract the
occupiers’ focus in recent times.
• The largest transaction in H2 2023 took place in
Vastrapur in CBD West. This 0.01 mn sq m (0.2 mn
sq ft) lease was inked by BFSI major HDFC.
• India facing businesses continued to drive
volumes in the market and accounted for 81% of
the transacted volume during the year. Occupier
demand in this category was well distributed
across BFSI, IT/ITES, Manufacturing and other
service sectors signifying the broad-based demand
for setting up India facing businesses during the
period.
• The share of flex spaces has grown consistently
in Ahmedabad especially since the pandemic, as
their premise of flexibility presented great value
to occupiers not wanting to make longer term
commitments in a still volatile macro-economic
environment. However, the share of flex space
transactions has fallen significantly from 42% in
H2 2023 to 14% in the current analysis period.
While the improving business environment has
inspired confidence in occupiers to make longer
term commitments, we believe the need for a
workplace specialist remains strong and this fall
in share points more toward a pause in demand
while existing capacities get taken up rather than a
reversal in trend.
• 2023 has ended on a strong note for the
Ahmedabad office market as occupier sentiments
have improved, and their increased willingness
to ink longer term commitments bodes well for
the market. Rents have also grown by 4% YoY in
tandem, pushed by the record volumes seen in H2
2023. The concerted efforts of both the state and
central governments to transform Ahmedabad into
an economic hub, coupled with its affordable real
estate and extensive connectivity infrastructure,
continue to position the city as an appealing choice
for office occupiers.
Business district Micro markets
CBD West Bodakdev, Keshav Baug, Prahladnagar, Satellite, SG Highway, Thaltej
PBD Gandhinagar, GIFT City
CBD Ashram Road, Ellisbridge, Paldi
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
22.2%
23.7%
24.6%
26.4%
34.0%
35.9%
41.7%
45.2%
45.8%
45.9%
45.1%
42.8%
41.8%
41.4%
Source: Knight Frank Research
INDIA REAL ESTATE - AHMEDABAD
AVERAGE DEAL SIZE TREND SQ M
CBD
CBD West
PBD
83%
15%
2%
87%
12%
1%
39%
81%
2,211
1,771
1,039
1,114
1,297
2,024
2,407
2,928
1,135
2,350
3,423
2,292
1,420
2,842
42%
14%
7%
6%
12%
0%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
Source: Knight Frank Research
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD 388-463 (36-43) 3% 2%
CBD West 431-549 (40-51) 5% 3%
PBD 323-441 (30-41) 1% 1%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
INDIA REAL ESTATE - AHMEDABAD
INDIA REAL ESTATE - BENGALURU
Bengaluru
BENGALURU MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
5000
10000
15000
20000
25000
30000
53,479 4.0
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
-5%
18.1
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
51,126 18% 27,584 24%
Sales
(housing units)
54,046 1% 27,799 4%
Average price in
INR/sq m (INR/sq ft)
INR 63,508 (INR 5,900) 7% - -
LAUNCHES AND SALES TREND NO. OF UNITS
21,400
22,234
24,190
27,849
24,281
26,220
13,395
20,309
14,026
8,384
15,556
11,826
20,894
28,225
12,878
19,851
10,806
12,177
9,123
11,402
13,389
14,812
17,218
23,218
21,223
26,677
22,197
26,686
23,542
26,247
27,584
27,799
21,210
13,336
25,802
17,973
INDIA REAL ESTATE - BENGALURU
• Bengaluru’s residential real estate market
continued its growth momentum in 2023 even
though the borrowing costs have significantly
increased since the interest rate upcycle began in
May 2022. The city’s economic prosperity faced
additional headwinds arising from volatility in the
tech sector and the start up eco system, due to
funding winters. A progression in sales, despite the
aforementioned headwinds, indicates continuation
in buyer appetite for home ownership in Bengaluru.
In 2023, Bengaluru registered residential sales
volume of 54,046 units, a nine year high. The strong
sales have boosted developer appetite to launch
large scale projects in the city. In 2023, the city
witnessed new launches of 51,126 units, a multiyear
high. While the Bengaluru centric developers
continue with their launches, the city has also
been gaining interest from non-Bengaluru centric
developers.
• In terms of ticket size, the sales as well as the
launches were concentrated in the mid and the
premium segment. During H2 2023, 49% of the
sales were concentrated in the mid segment (INR
5-10 mn) and 41% of sales were concentrated
in the premium segment (above INR 10 mn), a
significant improvement from 28% of the total
sales during H2 2022. Further bifurcation of figures
reveal that within the premium category, the sale of
houses priced above INR 20 mn have significantly
increased. During H2 2023, housing sales above
INR 20 mn comprised 12% of the total sales in
the city, a significant growth from 5% in H2 2022.
This highlights a growth in the income profile of the
city. While the tech sector primarily dominates the
city’s employment profile, the economic activities
of Bengaluru are diverse. The city hosts many
non-tech industries such as life sciences, defence
and aerospace, educational institutions, consulting
firms etc. which keep the city’s income growth well
balanced, thus driving the consumption demand
including that for real estate.
• Moreover, the consumers are flexible and willing to
pay a premium for larger, more comfortable spaces
with luxurious amenities. In tandem with the sales,
the launches were concentrated in the mid and
luxury segments comprising a share of 46% and
49% respectively during H2 2023. In terms of price,
3,492 units were launched in the price category
of above INR 20 mn, a multifold increase from
297 units launched 5 years ago. Considering the
consumer preference for large, spacious homes,
the average unit size of the new launches in 2023
stood at 1651 sq ft compared to 1450 sq ft in 2019,
pre COVID.
• The traditional South Bengaluru micro-market
continued to dominate sales comprising a share
of 39% of the total sales in the city in 2023. The
micro-market is well connected to the large
employment hubs located in Electronic City, Outer
Ring Road (ORR) etc. and is primarily dominated
by end-use consumers. Additionally, the ongoing
construction of the metro-lines, i.e., Yellow Line on
the Hosur Road and the extension of Purple Line to
Bannerghatta Road, adds impetus to the transport
infrastructure of this micro-market which in turn
will continue to keep afloat the demand for real
estate in this micro-market. While the mid-segment
primarily dominated this market, of late, there has
been a sharp rise in the development of luxury
residential real estate by prominent developers
such as Prestige, Puravankara, Adarsh, Sobha etc.
• In terms of launches, East Bengaluru micro-
market comprised a larger share of 48% of all the
launches in the city. East Bengaluru is a prime IT
hub with the presence of quality Grade A tech parks
in Whitefield, ITPL etc. The operation of 37 kms
of Purple Line metro connecting East Bengaluru
with the other parts of the city gives an additional
boost to the real estate market in East Bengaluru,
both commercial as well residential. Besides end
use, the residential demand in East Bengaluru,
specifically in localities such as Whitefield, is
also led by investment purposes. Thus, due to
its relatively strong economic profile compared
to other micro markets in the city, it encourages
developers to launch high end luxury projects in
this micro-market. East Bengaluru has a presence
of some prominent luxury and ultra-luxury projects
with an average ticket price of above INR 50 mn
by Grade A developers such as Embassy, Prestige,
DivyaSree etc. In terms of sales, the cluster
witnessed 32% of all the residential sales in 2023
with demand expanding to the peripherals of the
region such as Budigere Cross, Hoskote etc.
• The North Bengaluru micro-market is an emerging
and one of the fastest growing clusters in the city.
In 2023, the micro-market witnessed 22% of sales,
with a sharp rise in the absolute volumes. The
growing sales have accelerated developer interest
in this micro-market which comprised 18% of all
launches in the city. To accommodate the growing
population and demand, the development potential
has expanded beyond Hebbal and Yelahanka. The
micro-market is also witnessing one of the fastest
growths in infrastructure development. The Blue
Line metro connecting North Bengaluru via ORR
is one of the fastest developing metro projects
in the city and is expected to be operational from
2026. The operation of Kempegowda International
Airport Terminal 2 has led to massive infrastructure
investment in this region. In recent years, it has
witnessed the development of large commercial
real estate projects such as Aerospace Park,
Devanahalli Business Park and other SEZ and non
SEZ developments. Currently, North Bengaluru
and its peripherals have about 15 mn sq ft of
commercial office stock, and about 8 mn sq ft
is expected to be added by 2025, providing an
opportunity for growth of residential projects in the
region. In addition to the transport infrastructure
development, social infrastructure such as schools,
hospitals etc. is also well established in this cluster.
• Moreover, the developers are taking advantage of
the lush green surroundings in the cluster and have
been launching luxury and ultra-luxury residential
villas with modern exclusive designs, and plotted
developments in North Bengaluru. Such projects
have been attractive to the HNI and UHNI investors
and are being sold out within a very short span of
time from the launch.
• In terms of residential prices, Bengaluru witnessed
a 9% YoY growth with a weighted average price
of INR 63,505/sq m. The price growth is primarily
demand driven as hybrid work structure and
return to office is driving people, especially those
MICROMARKET CLASSIFICATION
Micro market Locations
Central MG Road, Lavelle Road, Langford Town, Vittal Mallya Road, Richmond Road
East Whitefield, Old Airport Road, Old Madras Road, KR Puram, Marathahalli
West Malleshwaram, Rajajinagar, Yeswanthpur, Tumkur Road, Vijayanagar
North Hebbal, Bellary Road, Hennur, Jakkur, Yelahanka, Banaswadi
South Koramangala, Sarjapur Road, Jayanagar, JP Nagar, HSR Layout, Kanakapura Road, Bannerghatta Road
Source: Knight Frank Research
INDIA REAL ESTATE - BENGALURU
0% 0%
31% 33%
13% 13%
46% 46%
10% 08%
0% 0%
55% 32%
20% 22%
21% 39%
04% 07%
AVERAGE RESIDENTIAL PRICE MOVEMENT INR/SQ M
H2 2022
H2 2022
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
50,053
51,452
51,721
52,205
52,001
49,396
50,881
50,386
51,893
53,572
53,605
53,120
52,959
55,435
57,674
59,315
60,739
63,508
Central Central
East East
North North
South South
West West
Source: Knight Frank Research
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
<5 mn 5-10 mn
>10 mn
Ticket-size
segment
Unsold Inventory
(housing units) (YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 17,872 (-19%) 6.1
5 – 10 mn 24,744 (-9%) 3.9
>10 mn 10,863 (57%) 2.6
26%
46% 28%
40%
49%11%
H2 2022
H2 2023
employed in the IT to move back to the city. To
accommodate the demand, the residential supply
in the city is scaling upwards too, as witnessed by
the multiyear high launches in 2023. Thus, going
ahead, as supply aligns with demand, the price
growth is likely to moderate in 2024. However, the
real estate market of the city will continue to be
vibrant owing to the growing economic profile of the
city.
• As a result, the quarters-to-sell (QTS) for Bengaluru
has narrowed to 4.1 quarters, which is a historical
low. The age of unsold inventory (AoI) inched up
to 18.1 in 2023. However, the high AoI does not
correlate with the healthy residential demand and
is raised due to the presence of stalled projects in
the city. Some of these projects were launched over
a decade ago and continue to remain on hold for
various reasons.
INDIA REAL ESTATE - BENGALURU
Source: Knight Frank Research
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central 17 (-87%) 0.6
East 15,346 (66%) 3.4
North 9,743 (-25%) 3.7
South 26,241 (-14%) 5.0
West 3,131 (-32%) 3.0
Source: Knight Frank Research
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central
Langford Town 1,61,460-2,36,808 (15,000-22,000) 3.0% 3.0%
Lavelle Road 2,26,044-3,22,920 (21,000-30,000) 3.0% 3.0%
East
KR Puram 43,056-76,424 (4,000-7,100) 5.9% 1.3%
Whitefield 51,129-86,090 (4,750-7,998) 11.1% 5.7%
Marathahalli 45,209-82,883 (4,200-7,700) 7. 3 % 3.8%
North
Hebbal 59,202-1,29,168 (5,500-12,000) 12.2% 6.7%
Yelahanka 45,209-83,959 (4,200-7,800) 10.1% 5.7%
Thanisandra 46,285-95,800 (4,300-8,900) 11.2% 6.4%
Hennur 45,209-96,876 (4,200-9,000) 10.6% 5.0%
South
Sarjapur Road 46,285-91,494 (4,300-8,500) 9.6% 3.9%
Kanakpura Road 45,209-80,730 (4,200-7,500) 8.6% 4.2%
Electronic City 37,674-69,966 (3,500-6,500) 8.7% 4.5%
Bannerghatta Road 45,209-78,039 (4,200-7,250) 8.5% 4.0%
West
Yeshwantpur 64,584-1,17,328 (6,000-10,900) 8.7% 6.8%
Malleswaram 88,265-1,56,078 (8,200-14,500) 7. 9 % 7.9 %
Rajajinagar 89,341-1,71,148 (8,300-15,900) 8.8% 7. 5 %
Tumkur Road 40,365-67,275 (3,750-6,250) 9.7% 6.5%
INDIA REAL ESTATE - BENGALURU
Bengaluru Office Market
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 1.24 (13.4) -14.4% 0.65 (7.0) -21%
Transactions
in mn sq m (mn sq ft) 1.16 (12.5) -14.3% 0.51 (5.5) -19%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 929.5 (86.4) 7% - -
20 (215) 15.1%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
6.6%
100
2023 Change (YoY)
2023 Change (YoY)
basis points increase
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
0.7
0.
8
0.
9
1.0
BENGALURU OFFICE MARKET ACTIVITY MN SQ M
0.4
0.6
0.4
0.5
0.6
0.6
0.3
0.5
0.3
0.4
0.3
0.4
0.7
0.8
0.8
0.6
0.4
0.4
0.5
0.7
0.5
0.3
0.6
0.8
0.5
0.7
0.9
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.6
0.6
INDIA REAL ESTATE - BENGALURU
• Bengaluru continues to be the most favored
market by occupiers in 2023, accounting for
21% of the overall transactions across the top
8 cities. However, within the market, there has
been moderation in the leasing activities due to
moderation in leasing by tech occupiers i.e. third
party IT services, stall in the expansion of start-ups
due to funding winters, and moderation in the
average size of the transactions. Owing to these
factors, Bengaluru registered transaction leasing
volume of 1.16 mn sq m (12.5 mn sq ft) in 2023,
a 14% de-growth when compared to 2022. The
moderation observed does not necessarily signal
a decline in office transactions in Bengaluru. On
the contrary, office leasing in 2023 exceeded the
10-year average of 1.13 mn sq m (12.2 mn sq ft). It
is important to note that the statistical decrease in
growth may be influenced by the high base effect of
2022, which had seen the second-highest volume
of transactions in its recorded history.
• Despite the slowdown in office space leasing by
third-party IT services, which accounted for 15% of
total transactions in Bengaluru in 2023 compared
to 27% in 2022, the leasing landscape in 2023 has
been influenced positively by GCC, flex, and India-
facing occupiers. GCCs players primarily focused
on manufacturing, consulting business and BFSI.
Qualcomm, Deloitte, MUFG etc., were some of the
big-ticket occupiers in 2023.
• Flex tenants emerged as the predominant
occupants of office spaces in Bengaluru in 2023.
The leasing activity by flex occupiers reached 0.35
mn sq m (3.8 mn sq ft) comprising 30.3% of the
overall transaction volume, reflecting a substantial
23% increase compared to 2022. However, the
momentum in flex space leasing that was robust
during H1 2023, tapered off in H2 2023. This shift
suggests a resurgence in occupier inclination
towards long-term leases, signaling a change
in sentiment. The headwinds faced by the tech
sector such as the anticipated slowdown in the US
economy, have diminished and there is a renewed
interest in returning to traditional office setups.
• In 2023, GCCs accounted for 30% of office space
leasing volume in Bengaluru compared to 25% in
2022. According to an EY report, India is currently
home to around 1550 GCCs, and this number is
projected to rise to approximately 2300 by 2030.
This expansion will potentially lead to a growth in
employee headcount to 4.5 mn in 2030, compared
to the current 1.9 mn. Thus, the prospective growth
in the GCC occupiers leasing space is massive
in India. Within India, Bengaluru is an attractive
market for GCC occupiers as the city is already an
established global hub, has a diverse talent pool
and a unique ecosystem comprising technology
penetration, research & development, startups,
academia and more.
• Prospective drivers of office transaction volume
in Bengaluru include tenants associated with
India-facing businesses. In 2023, India-facing
businesses constituted 25% of the total office
leasing volume in Bengaluru. The growth outlook
for businesses operating in India is highly favorable,
given the expanding consumer base, increasing
digitalization, and ongoing economic development
in the country. Notably, the business landscape in
India is experiencing significant advancements,
particularly in technology, e-commerce, healthcare,
renewable energy, and manufacturing. Amidst
this overall development, Bengaluru’s diverse
ecosystem and abundant talent pool are poised to
play a prominent role in attracting occupiers from
India-facing businesses.
• Amongst the business districts, ORR accounted for
the largest share, i.e 41% of the total office space
leasing volume in 2023. ORR continues to be an
attractive micro-market as the business district
consists of established Grade A business parks
with quality space. Owing to its attractiveness to
occupiers, along with the development of new
infrastructure such as the under construction
Blue Line metro connecting Silk Board to Hebbal,
developer sentiment continues to remain strong.
In 2023, ORR witnessed a supply infusion of 0.29
mn sq m (3.1 mn sq ft) primarily in the existing tech
parks backed by prominent Grade A developers.
• PBD East registered 23% of the transactions in
2023. From a mere 10% leasing share in 2017,
the demand for office space in this region has
significantly increased in the last few years. The
recent operation of elevated Purple Line metro
corridor connecting K R Puram and Whitefield
has enhanced connectivity in the micro-market,
boosting occupier interest in this micro-market. To
capitalize on this growing occupier interest, PBD
East witnessed a larger share of supply infusion in
the city, amounting to 0.47 mn sq m (5.1 mn sq ft),
equivalent to 30% of the total new supply infusion
in 2023.
• PBD North stands out as the most rapidly
expanding micro market, demonstrating vigorous
growth to meet the increasing real estate demands
of Bengaluru city. Despite recording 0.09 mn sq
m (1.0 mn sq ft) in office transactions in 2023,
PBD North has attracted considerable leasing
interest from occupiers. Notably, some of the most
substantial transactions in the Bengaluru market
in 2023 were conducted in PBD North, involving
tenants like HDFC Bank, Yenepoya University,
MUFG, and others.
• Large scale infrastructure investment such as the
expansion of Kempegowda International Airport
(KIA), and the construction of phase 2 and 3 Blue
Line metro connecting KIA with the rest of the
city has encouraged developers to acquire large
land banks in the region and develop high scale
tech parks in this cluster. The office stock in this
region has increased from 0.51 mn sq m (5.5 mn
sq ft) in 2019 to 1.4 mn sq m (15 mn sq ft) currently,
with a maximum concentration by the Grade A
developers. The micro market has quality A Grade
office supply developed by prominent developers
such as Brigade Developers, L&T, Bhartiya Urban,
Embassy etc. Additionally, 0.70 mn sq m (8 mn
sq ft) of new office supply is under construction
by developers such as CapitaLand, Prestige,
Salarpuria Sattva etc. to be completed tentatively
by 2025. Improved connectivity, along with quality
workspace, would undoubtedly boost occupier
interest in this micro-market.
• Overall, Bengaluru has witnessed new supply
infusion of 1.24 mn sq m (13.4 mn sq ft) in 2023
with an accumulated stock of 20 mn sq m (215 mn
sq ft). Due to subdued demand, the vacancy level
increased by 100 bps to 15.1% in 2023 compared
to a year ago and the market contains adequate
inventory to fulfill occupier demand in the near
future.
• The average transacted rentals in Bengaluru grew
by 6.6% YoY to INR 930/sq m/month (INR 86.4/
sq ft/month) in 2023. Significant rental growth
was predominantly observed in PBD East and the
ORR micro markets. The development of transport
infrastructure has heightened the occupier’s
interest in both these micro-markets. Although the
demand has been moderate, the growing occupier
interest and the quality supply in Bengaluru has
driven rentals upward in the market. In general,
barring the short-term discrepancies, Bengaluru’s
office market fundamentals remain strong. The
acceleration of return to office by firms and the
growth in India facing businesses along with stable
business inflow from the western developed
markets into India, should support the growth in the
office market demand in the near term.
INDIA REAL ESTATE - BENGALURU
CBD & Off CBD
SBD
PBD East
ORR
PBD South
PBD North
PBD West
04%
04%
33%
38%
15%
05%
0%
07%
07%
09%
45%
16%
15%
01%
27%
17%
27%
31%
19%
37%
27%
15%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
16%
14%
12%
10%
8%
6%
4%
2%
0
INR per sq m
4.0%
3.0%
3.5%
4.0%
4.0%
4.8%
6.5%
9.3%
11.3%
13.0%
12.3%
14.1%
14.5%
15.1%
BUSINESS DISTRICT CLASSIFICATION
Micro market Locations
Central Business District (CBD) and Off CBD MG Road, Residency Road, Cunningham Road, Lavelle Road, Richmond Road, Infantry Road
Secondary Business District (SBD) Indiranagar, Koramangala, Airport Road, Old Madras Road
Peripheral Business District (PBD) East Whitefield
Peripheral Business District (PBD) South Electronic City, Bannerghatta Road
Peripheral Business District (PBD) North Thanisandra, Yelahanka, Devanahalli
Peripheral Business District (PBD) West Vijaynagar, Tumkur Road, Mysore Road
Outer Ring Road (ORR) Hebbal ORR, Marathahalli ORR, Sarjapur Road ORR
INDIA REAL ESTATE - BENGALURU
AVERAGE DEAL SIZE TREND SQ M
4,925
3,638
4,313
6,110
5,228
5,249
5,130
8,444
4,541
7,246
5,412
4,378
4,834
4,616
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD & Off-CBD 1184-2099 (110-195) 1.7% 1.7%
SBD 861-1830 (80-170) 4.2% 4.2%
PBD East 646-915 (60-85) 11.5% 7.4 %
PBD South 538-969 (50-90) 3.7% 0.0%
PBD North 538-1023(50-95) 7.4% 7. 4 %
ORR 1023-1399 (95-130) 7.0% 4.7%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
INDIA REAL ESTATE - CHENNAI
Chennai
CHENNAI MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
2000
4000
6000
8000
10000
12000
14000
15,536 4.3
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
10%
8.8
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
16,272 6% 8,150 4%
Sales
(housing units)
14,920 5% 7,770 6%
Average price in
INR/sq m (INR/sq ft)
INR 48,137 (INR 4,472) 4% - -
LAUNCHES AND SALES TREND NO. OF UNITS
9,102
9,091
5,854
8,792
5,815
8,450
4,800
7,737
6,035
3,200
6,523
3,850
7,762
8,979
3,780
7,980
3,520
2,981
3,714
5,673
5,424
5,751
7,360
6,206
7,570
6,951
7,846
7,297
8,122
7,150
8,150
7,770
8,850
6,670
8,585
7,401
INDIA REAL ESTATE - CHENNAI
• The Chennai residential market has exhibited a 5%
YoY increase in residential sales, reaching 14,920
units in 2023. Despite the recovery path observed
since the waning of the pandemic, the market has
yet to surpass its pre-COVID numbers. However,
with the continued momentum, sales are expected
to be back at their pre-COVID levels in the coming
few quarters. During H2 2023, sales increased by
6% to 7,770 units.
• Sales in the Chennai residential market was
predominantly concentrated in the south and west
micro-markets, collectively contributing to 86%
of total sales during H2 2023. Notably, locations
along the Old Mahabalipuram Road (OMR) and
Grand Southern Trunk (GST) Road in the south
micro-market retained the majority of homebuyer
interest, constituting a 61% share. Meanwhile, more
affordable areas such as Porur, Valasaravakkam,
and Poonamalle in the west accounted for 25%
of the overall share. Both these zones are well-
connected to the city’s main office and IT hubs.
• Chennai’s booming manufacturing, hospitality, and
logistics sectors are attracting a larger workforce,
leading to increased demand for affordable
housing. In 2023, the mid-segment, priced
between INR 5-10 mn remained predominant,
comprising 40% of sales. The affordable or <INR
5 mn segment closely followed, contributing 37%
to total sales, an increase from 28% in 2022.
Annual sales in the affordable housing segment in
Chennai has also increased sharply by 41% YoY
during 2023. This indicates strong traction among
first-time buyers and budget-conscious individuals,
highlighting the widening appeal of affordable
housing options in Chennai.
• Houses in the luxury segment priced above INR
10 mn, constituted 23% of the total sales during
2023 and witnessed a 2% YoY reduction during the
year. Notably, a niche group of buyers in Chennai
are seeking larger spaces and enhanced amenities
which has contributed to the demand for luxury
apartments.
• Developers launched 16,272 units in 2023, marking
a 6% increase from the units launched in 2022.
Most of the launches were concentrated in the
southern and western micro-markets during 2023
representing 61% and 28% of the total launches
respectively. In terms of ticket size, launches in the
affordable and mid categories increased by 22%
and 10% YoY respectively, while there was a 17%
decline in launches in the luxury segment.
• During the year, the overall unsold inventory
increased by 10% YoY, reaching 15,536 units.
Specifically, there was a 13% YoY increase in
inventory in the affordable segment and a 27%
YoY increase in the luxury segment. However, the
quarter-to-sell (QTS) in the affordable segment
remained constant at 6.7 which is higher in
comparison to the QTS of the other segments. QTS
in the luxury segment increased slightly from 3.4 in
2022 to 3.6 in 2023.
• During 2023, a steady price appreciation of 4%
YoY has been observed in Chennai. This positive
trend reflects the resilience and stability of the city’s
property market, indicating a sustained demand for
real estate.
• Chennai’s status as a major commercial and
industrial hub, coupled with its emergence as an
IT hub, has spurred substantial job opportunities,
fostering an improved demand for residential
properties in the city. The ongoing improvement in
market conditions and the plethora of upcoming
projects are expected to sustain and elevate
housing demand in Chennai over the coming
quarters.
MICROMARKET CLASSIFICATION
Micro market Locations
Central Chennai T. Nagar, Alandur, Nungambakkam, Kodambakkam, Kilpauk
West Chennai Porur, Ambattur, Mogappair, Iyyappanthangal, Sriperumbudur
South Chennai Perumbakkam, Chrompet, Sholinganallur, Guduvancheri, Kelambakkam
North Chennai Tondiarpet, Kolathur, Madhavaram, Perambur
Source: Knight Frank Research
INDIA REAL ESTATE - CHENNAI
H2 2022
H2 2023
3% 5%
4% 4%
49% 59%
44% 33%
7% 7%
8% 7%
61% 61%
24% 25%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
AVERAGE RESIDENTIAL PRICE MOVEMENT
INR/SQ M
<5 mn 5-10 mn
H2 2022
H2 2022
>10 mn
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
60,000
50,000
40,000
30,000
20,000
10,000
-
48,782
49,470
50,179
50,213
50,591
48,707
48567
47,245
47,110
44,886
44,509
40,843
43,619
43,594
45,661
46,285
46,823
48,137
Ticket-size
segment
Unsold Inventory (housing units) (YoY
Change)
Quarters-to-sell
(QTS)
0 – 5 mn 7,975 (13%) 6.7
5 – 10 mn 4,423 (-5%) 2.8
>10 mn 3,138 (27%) 3.6
Central Central
North North
South South
West West
Source: Knight Frank Research
Source: Knight Frank Research
24%
49% 27%
26%
40%35%
INDIA REAL ESTATE - CHENNAI
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central 124 (-57%) 0.7
North 683 (47%) 3.9
South 6,050 (10%) 2.7
West 8,679 (9%) 8.0
Source: Knight Frank Research
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central
Anna Nagar 1,35,626 – 1,50,696 (12,600 – 14,000) 6% 1%
Kilpauk 1,40,578 – 1,64,689 (13,060 – 15,300) 9% 2%
North
Kolathur 62,431 – 65,660 (5,800 – 6,100) 5% 2%
Perambur 71,247 – 73,400 (6,619 – 6,819) 3% 3%
South
Perumbakkam 48,782 – 57,049 (4,532 – 5,300) 1% 1%
Kelambakkam 43,056 – 44,821 (4,000 – 4,164) 1% 1%
West
Porur 60,278 – 69,966 (5,600 – 6,500) -5% -1%
Mogappair 76,963 – 84,497 (7,150 – 7,850) 5% 1%
INDIA REAL ESTATE - CHENNAI
Chennai Office Market
CHENNAI MARKET SUMMARY
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.61 (6.6) 49% 0.40 (4.3) 212%
Transactions
in mn sq m (mn sq ft) 1.00 (10.8) 92% 0.58 (6.3) 82%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 700 (65.0) 6.2% - -
8.27 (89.0) 10.5%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
8%
273
2023 Change (YoY)
2023 Change (YoY)
Basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
0.7
CHENNAI OFFICE MARKET ACTIVITY MN SQ M
0.09
0.18
0.11
0.29
0.03
0.18
0.02
0.29
0.10
0.07
0.11
0.01
0.03
0.17
0.14
0.31
0.30
0.12
0.01
0.30
0.08
0.11
0.09
0.25
0.28
0.20
0.13
0.32
0.21
0.42
0.40
0.58
0.18
0.24
0.16
0.16
INDIA REAL ESTATE - CHENNAI
• Chennai’s commercial real estate sector has
experienced a remarkable upswing, achieving
an unprecedented milestone in 2023 with an
all-time high in office leasing activities. Transaction
volumes increased sharply by 92% YoY to 1.00 mn
sq m (10.8 mn sq ft). This surge is predominantly
attributed to a robust leasing momentum driven by
large space take up by multinational corporations.
Furthermore, the market has demonstrated
resilience by fostering a broad tenant base,
highlighting the city’s attractiveness for a diverse
range of businesses. In the second half of 2023,
the commercial real estate market in Chennai
maintained its strong transaction momentum,
experiencing an impressive 82% YoY increase in
transaction volumes.
• During H2 2023, the majority of transactions,
approximately 62%, were driven by Global
Capability Centers (GCCs), representing offshore
units of multinational corporations. Noteworthy
tenants in this category include major corporations
such as Hapag-Lloyd, UPS, Deloitte, Oppo, Citibank,
Bank of America, and Fidelity. The average deal size
of GCC occupiers during H2 2023 was ~0.008 mn
sq m (0.08 mn sq ft) as compared with the space
take up during H2 2022 which was ~0.003 mn sq
m (0.03 mn sq ft).
• Companies whose operations are primarily focused
on catering to the Indian market, leased 13% of
the office space in Chennai during H2 2023. Of
these companies, the predominant tenants were
those in the IT/ITeS sector (41% of the total India
facing transactions), followed by those from the
Manufacturing (24%) and BFSI segments (21%).
Notable occupiers in this category included
Cholamandalam Finance, Tata Communication,
L&T, Maruti Suzuki, and Caratlane (Titan Group).
The average deal size of occupiers with an India
facing business orientation during H2 2023 was
approximately 0.001 mn sq m (0.02 mn sq ft),
similar to the space take up during H2 2022 which
was also approximately 0.001 mn sq m (0.02 mn sq
ft).
• The transaction volumes for flexible workspace
operators experienced a significant 81% YoY
increase during H2 2023. However, in terms of the
total share of transactions, it remained consistent
at 16% of the total spaces leased, maintaining
this level during both H2 2023 and H2 2022.
Key players such as Smartworks, WeWork, and
Workez were the most active operators in the flex
space segment, contributing significantly to the
transactions during this period. This increase in
demand underscores the sustained appeal and
relevance of flexible workspaces in Chennai’s
commercial real estate landscape.
• Companies primarily engaged in outsourcing
services to clients abroad, specifically in the Third-
Party IT services domain, constituted 9% of the
total transactions.
• Since 2012, office completions in Chennai have
reached a peak in 2023. The new office supply in
the Chennai commercial market for the year 2023
saw a robust increase of 48% YoY, totaling 0.61 mn
sq m (6.6 mn sq ft). The heightened demand and
preference for occupier activity in Chennai has led
developers to focus on the creation of office parks
and buildings. Approximately 41% of the new office
launches were concentrated in the SBD OMR zone
(Perungudi and Taramani). It is worth noting the
remarkable surge in office supply during H2 2023
reaching 0.40 mn sq m (4.3 mn sq ft), a sharp 212%
YoY increase as compared with the new office
supply released during H2 2022.
• Occupier activity in Chennai remained focused
in the SBD OMR, with key locations like
Kandanchavadi, Taramani, Perungudi, and
Kottivakkam contributing to 49% of the total
transacted area during H2 2023. Additionally, the
SBD zone, encompassing areas like Guindy, Porur,
and Nandambakkam, accounted for 27% of the
overall leasing volumes.
• During H2 2023, rentals in Chennai increased by
6% YoY, with the SBD OMR area experiencing
the sharpest surge. The key drivers for this
upward trend are the robust leasing momentum,
heightened occupier confidence, and the
introduction of new office spaces with enhanced
specifications and higher rents, collectively
elevating the overall rent profile of the market.
• The Chennai office market is underpinned by
a robust economy, a skilled workforce, well-
established infrastructure, and relatively lower
occupancy costs. These factors consistently attract
occupiers to the region. The substantial growth
in transaction volumes underscores the enduring
vibrancy and allure of Chennai’s commercial real
estate sector, solidifying its status as a dynamic
hub for business and leasing activities. Additionally,
the market’s affordability, as measured in INR per
square foot per month, positions Chennai favorably
amongst peer markets, highlighting a balanced
and competitive pricing structure in the regional
commercial real estate landscape.
Business district Micro markets
Central Business District (CBD and off CBD) Anna Salai, RK Salai, Nungambakkam, Greams Road, Egmore, T Nagar
Suburban Business District (SBD) Mount – Poonamallee Road, Porur, Guindy, Nandambakkam
SBD – Old Mahabalipuram Road (OMR) Perungudi, Taramani
Peripheral Business District (PBD) – OMR and Grand Southern Trunk Road (GST) OMR beyond Perungudi Toll Plaza, GST Road
PBD – Ambattur Ambattur
INDIA REAL ESTATE - CHENNAI
SBD OMR
PBD OMR and GST
CBD
SBD
PBD Ambattur
38%
26%
12%
20%
03%
49%
12%
07%
27%
04%
26%
13%
13%
9%
16%
16%
45%
62%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
CHENNAI OFFICE MARKET VACANCY
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
16%
14%
12%
10%
8%
6%
4%
2%
0
INR per sq m
11%
10.2%
11%
10.6%
10.2%
8.8%
12.2%
11.7%
12.7%
13.0%
13.9%
13.3%
11.5%
10.5%
Source: Knight Frank Research
INDIA REAL ESTATE - CHENNAI
AVERAGE DEAL SIZE TREND
2,044
2,282
1,883
2,158
2,244
3,012
3,347
4,620
1,602
2,906
2,587
2,531
3,771
4,531
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD 700 - 1,023 (65 - 95) 7% 5%
SBD 807 - 969 (75 - 90) 8% 5%
SBD OMR 861 - 1,044 (80 - 97) 7% 7%
PBD OMR and GST Road 538 - 700 (50 - 65) 2% 4%
PBD Ambattur 323 - 431 (30 - 40) -5% -5%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
INDIA REAL ESTATE - HYDERABAD
Hyderabad
HYERABAD MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
5000
10000
15000
20000
25000
30000
45,505 5.7
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
45%
6.6
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
46,985 7% 24,134 7%
Sales
(housing units)
32,880 6% 17,525 7%
Average price in
INR/sq m (INR/sq ft)
INR 59,740 (INR 5,550) 11% - -
LAUNCHES AND SALES TREND NO. OF UNITS
5,457
7,123
5,740
7,780
5,700
7,700
5,900
7,289
2,571
940
3,706
1,698
5,430
8,334
8,065
7,933
4,422
4,782
8,404
5,260
16,712
11,974
19,024
12,344
21,356
14,693
22,491
16,353
22,851
15,355
24,134
17,525
7,901
6,342
8,313
7,278
INDIA REAL ESTATE - HYDERABAD
• Since 2021, residential sales in Hyderabad
have been marked by a trend of homebuyers
consistently seeking to upgrade their living spaces.
In 2023, annual sales rose by 6% YoY, reaching an
all-time high of 32,880 units. The increase in sales
was driven by homebuyers prioritizing on lifestyle
upgrades, showing a preference for amenity-rich
communities in well-established areas. Sales
during H2 2023 increased by 7% YoY as compared
with H2 2022.
• West Hyderabad remained the preferred choice
for homebuyers in H2 2023 constituting 61% of
the total sales, a trend consistent with H2 2022.
The area’s appeal is attributed to its proximity to
key office locations such as HITEC City and the
Financial District, coupled with robust infrastructure.
These factors continue to compel homebuyers to
opt for West Hyderabad.
• The proportion of high-value segment sales,
representing homes valued at over INR 10 mn, has
more than doubled, surging from 21% in 2018 to
a substantial 49% in 2023. Half of the total sales
now occur in this segment, and this upward trend
is anticipated to persist in the coming years. The
city’s growing economy and sustained demand for
luxury housing are expected to be key drivers of
this continued shift towards higher-value real estate
transactions. Annual transactions in this segment
have increased by 38% YoY during 2023.
• The growing preference for luxury housing or
higher value homes has resulted in a decline in the
share of houses in the affordable and mid housing
market. Transactions in affordable homes or houses
in the less than INR 5 mn segment have decreased
from 26% in 2018 to 11% in 2023. Similarly, sales
in the mid housing or homes in the INR 5-10 mn
segment have seen a decline from 52% in 2018 to
40% in 2023.
• Reflecting the changing preferences, developers
launched a total of 46,985 units in 2023. Notably,
43% of these launches were for homes valued
over INR 10 mn. West Hyderabad dominated
the landscape with 62% of the overall launches,
featuring prominent developers such as My Home
Constructions, Rajapushpa Properties, Aparna
Construction, and Prestige Group. Key locations like
Kokapet, Tellapur, Kukatpally, and Nanakramaguda
witnessed significant development activity,
particularly in the luxury segment. The North and
East zones, accounting for 18% and 10% of total
launches respectively, saw a concentration of
launches in the affordable and mid segments
during 2023.
• Unsold inventory in Hyderabad residential market
increased by 45% YoY to 45,505 units during
2023. Notably, 50% of the unsold inventory
comprised of houses in the mid-range or houses
falling in the INR 5-10 mn category. An intriguing
observation is the decline in the quarter to sell
(QTS) for luxury housing, from 5.1 in 2022 to 4.7 in
2023. In contrast, QTS increased for houses in the
less than INR 5 mn and INR 5-10 mn segments,
reaching from 3.9 to 5.7 and 4.4 to 6.8 respectively.
This trend reinforces the prevailing narrative in the
Hyderabad housing market, emphasizing a strong
preference for luxury or higher value homes over
those in the affordable and mid categories.
• Hyderabad residential prices rose by 11% YoY
during 2023. Since the past few years there has
been a sharp appreciation of land prices which has
led to the increase in residential prices. Despite the
price rise, the city continues to remain a desirable
location for investors as well as end users.
• The prevailing trend in Hyderabad’s residential
market centers around the growing necessity to
upgrade primary dwellings to apartment complexes
that provide increased space and amenities. The
city boasts a robust and well-planned network of
roads, flyovers, underpasses, and wide ring roads.
The government’s ongoing investments in key
infrastructure projects, including the Hyderabad
Metro Rail and the Regional Ring Road, are
anticipated to enhance the city’s appeal as an
attractive place for both living and working. These
developments are poised to further stimulate the
demand for housing in Hyderabad.
MICROMARKET CLASSIFICATION
Micro market Locations
HMR – Central Begumpet, Banjara Hills, Jubilee Hills, Panjagutta, Somajiguda
HMR – West Kukatpally, Madhapur, Kondapur, Gachibowli, Raidurgam, Kokapet
HMR – East Uppal, Malkajgiri, LB Nagar
HMR – North Kompally, Medchal, Alwal, Quthbullanpur
HMR – South
Rajendra Nagar, Shamshabad
Source: Knight Frank Research
INDIA REAL ESTATE - HYDERABAD
H2 2022
H2 2023
4% 4%
10% 9%
19% 19%
6%
61%
5%
62%
3% 3%
11% 10%
17% 19%
7%
62%
6%
61%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
AVERAGE RESIDENTIAL PRICE MOVEMENT
INR/SQ M
<5 mn 5-10 mn
H2 2022
H2 2022
>10 mn
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
37,771
38,966
38,966
39,934
39,934
41,129
43,185
44,025
47,071
48,438
50,300
48,535
50,803
50,806
52,937
53,651
58,234
59,740
Ticket-size
segment
Unsold Inventory (housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 6621 (23%) 5.7
5 – 10 mn 22,726 (65%) 6.8
>10 mn 16,157 (32%) 4.7
Central Central
East East
North North
South
West
South
West
Source: Knight Frank Research
Source: Knight Frank Research
15%
42% 43%
53%
38%10%
INDIA REAL ESTATE - HYDERABAD
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central 1,382 (84%) 4.2
East 4,678 (52%) 6.1
North 7,123 (47%) 4.7
South 3,811 (65%) 8.2
West 28,511 (40%) 5.8
Source: Knight Frank Research
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central
Banjara Hills 1,55,002 – 1,72,224 (14,400 – 16,000) 12% 1%
Jubilee Hills 1,44,238 – 1,61,460 (13,400 – 15,000) 5% 1%
East
LB Nagar 66,737 – 68,351 (6,200 – 6,350) 2% 1%
Nacharam 63,508 – 65,660 (5,900 – 6,100) 8% 2%
North
Kompally 51,667 – 59,934 (4,800 – 5,568) 6% 3%
Sainikpuri 52,744 – 54,896 (4,900 – 5,100) -2% -1%
South
Rajendra Nagar 74,670 – 88,512 (6,937 – 8,223) 20% 13%
Bandlaguda 72,119 – 83,841 (6,700 – 7,789) 10% 2%
West
Kokapet 1,08,125 – 1,34,550 (10,045 – 12,500) 39% 4%
Manikonda 91,494 – 98,168 (8,500 – 9,120) 28% 4%
INDIA REAL ESTATE - HYDERABAD
Hyderabad Office Market
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.61 (6.5) -42% 0.49 (5.3) -12%
Transactions
in mn sq m (mn sq ft) 0.82 (8.8) 32% 0.55 (5.9) 68%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 705 (65.5) 1% - -
9.87 (106.3) 14.9%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
7%
54
2023 Change (YoY)
2023 Change (YoY)
basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
0.7
0.
8
0.9
HYDERABAD OFFICE MARKET ACTIVITY MN SQ M
0.1
0.1
0.2
0.3
0.3
0.3
0.2
0.3
0.2
0.1
0.2
0.2
0.4
0.4
0.6
0.8
0.4
0.2
0.5
0.4
0.1
0.1
0.4
0.4
0.5
0.3
0.6
0.3
0.1
0.3
0.5
0.5
0.2
0.3
0.2
0.4
INDIA REAL ESTATE - HYDERABAD
• The Hyderabad office leasing market experienced a
significant 32% YoY growth, with a total of 0.82 mn
sq m (8.8 mn sq ft) transacted in 2023. This growth
can be primarily attributed to an increase in office
leasing activities during the second half of 2023
which witnessed a remarkable 68% YoY growth.
The substantial take-up by Global Capability
Centers (GCCs), especially those outsourcing their
IT and back-office operations to the city, played
a pivotal role in achieving these robust figures.
Additionally, the ongoing recovery in the IT sector
has further contributed to the volume growth.
• Offshore units of multinational corporations,
recognized as Global Capability Centers (GCC),
substantially increased their share, accounting for
67% of the leased office spaces during H2 2023,
a notable rise from the 43% recorded in H2 2022.
Key tenants in this segment include prominent
names such as PepsiCo, HSBC, Apple, EY, KPMG,
and Providence. While Providence focuses on
developing technologies and solutions to enhance
healthcare delivery and patient experience,
PepsiCo operates a large facility providing diverse
support services for PepsiCo’s global operations.
The Apple office is dedicated to sales, marketing,
and support operations in line with the company’s
global business strategies. The average deal size
of GCC occupiers during H2 2023 was ~0.011 mn
sq m (0.12 mn sq ft) as compared to the overall
average deal size in Hyderabad during H2 2022
which was ~0.008 mn sq ft (0.08 mn sq ft).
• Businesses with a primary focus towards catering
to the Indian market, accounted for 10% of the
leased office space during H2 2023. Within this
category, tenants in the BFSI sector, as well as
those in the IT/ITeS sector, were the most dominant
and accounted for the bulk of transactions. The
average deal size of occupiers with an India
Facing business orientation during H2 2023 was
approximately 0.005 mn sq m (0.05 mn sq ft),
similar to the space take up during H2 2022 which
was approximately 0.004 mn sq m (0.05 mn sq ft).
• Despite flex spaces accounting for 8% of the total
leased office space during H2 2023, which was
a slight decrease from the 11% in H2 2022, there
was a noteworthy 22% YoY increase in transaction
volume. Key players in this sector, such as WeWork,
Awfis, and Red Bricks, were particularly active
during this period. The rise in start-up incubators
and accelerators in Hyderabad has contributed
to the increasing popularity of flex spaces,
offering essential flexibility in scale and tenure for
burgeoning businesses.
• In a market traditionally dominated by the
Information Technology (IT) sector, third party IT
services players primarily engaged in outsourcing
services to clients abroad, constituted 16% of total
transactions during H2 2023. Transaction volumes
increased sharply by 182% YoY during this period,
reflecting a substantial increase in the presence
and activity of these players in the market. The
average deal size for these occupiers in the third-
party IT outsourcing sector during H2 2023 was
approximately 0.005 mn sq m (0.05 mn sq ft). This
marked an increase compared to the space taken
up during H2 2022, which was approximately 0.002
mn sq m (0.03 mn sq ft).
• In 2023, office completions experienced a
significant 42% YoY decline, totaling 0.61 mn sq
m (6.5 mn sq ft). This drop can be attributed to the
elevated base effect from the preceding year of
2022, when supply volumes reached their highest
levels since 2014. Despite the decline observed,
the forthcoming quarters in Hyderabad are
expected to see new completions.
• Hyderabad’s vacancy rate declined slightly in H2
2023 to 14.9% from 15.4% during H2 2022. In
addition to the fall in office space completions, the
drop in vacancy can be attributed to the strong
transaction volumes seen during the period,
especially by GCCs occupiers whose transaction
volumes increased sharply by 161% during H2
2023.
• Occupiers showed a strong preference for leasing
office spaces in the SBD zone, with 80% of overall
transactions occurring in H2 2023 and H2 2022.
HITEC City continues to stand out as the primary
hub in the Hyderabad office market within the SBD
zone.
• Rentals in Hyderabad maintained stability with a
1% YoY increase during H2 2023. In HITEC City and
the Financial District which are key areas for office
leasing, there has been a consistent flat growth in
rentals during the same period.
• Hyderabad continues to thrive as one of the
fastest-growing cities in the country, attracting
attention for its outstanding quality of life, strong
infrastructure, and a consistent influx of top-tier
talent and corporate entities. The city’s growth-
focused state policies, complemented by a
favorable track record in execution, firmly establish
its standing as one of the most business-friendly
cities in the nation. Notably, it boasts some of the
best office parks with consistently steady rentals,
further enhancing its appeal for occupiers.
Business district Micro markets
Central Business District (CBD and off CBD) Banjara Hills, Jubilee Hills, Begumpet, Ameerpet, Somajiguda, Himayat Nagar, Raj Bhavan Road, Punjagutta
Suburban Business District (SBD) HITEC City, Kondapur, Manikonda, Kukatpally, Raidurg
Peripheral Business District (PBD) West Gachibowli, Kokapet, Madinaguda, Nanakramguda, Serilingampally
Peripheral Business District (PBD) East Uppal, Pocharam
INDIA REAL ESTATE - HYDERABAD
CBD & Off CBD
PBD East
SBD
PBD West
0%
0%
80%
20%
5%
0%
80%
15%
37%
10%
9%
16%
11%
8%
43%
67%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
16%
14%
12%
10%
8%
6%
4%
2%
0
INR per sq m
5.2%
5.1%
6.8%
7. 4 %
7.1 %
7.0 %
8.9%
9.4%
12.3%
12.2%
13.7%
15.4%
14.0%
14.9%
Source: Knight Frank Research
INDIA REAL ESTATE - HYDERABAD
AVERAGE DEAL SIZE TREND
1,720
4,077
2,079
6,178
3,772
7,403
6,992
13,148
5,720
16,285
6,216
4,520
4,083
7,711
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD and Off-CBD 592-646 (55-60) 1% 0%
SBD 732-807 (68-75) 2% 1%
PBD West 592-646 (55-60) 0% 0%
PBD East 323-377 (30-35) -2% 1%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
INDIA REAL ESTATE - KOLKATA
Kolkata
KOLKATA MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
2000
4000
6000
8000
10000
12000
14000
21,417 6.1
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
4%
11.1
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
15,730 28% 8,954 59%
Sales
(housing units)
14,999 16% 7,675 32%
Average price in
INR/sq m (INR/sq ft)
INR 38,632 (INR 3,589) 7% - -
LAUNCHES AND SALES TREND NO. OF UNITS
12,073
11,448
10,680
9,170
11,891
10,339
9,093
7,308
9,764
6,176
6,393
5,622
627
4,588
5,027
6,678
858
2,937
3,290
5,975
2,195
5,115
5,315
9,290
6,686
7,090
5,644
5,819
6,776
7, 3 24
8,954
7,675
8,109
6,038
6,591
6,140
INDIA REAL ESTATE - KOLKATA
• In 2023, Kolkata’s residential real estate market
continued to witness strong homebuying demand
encouraged by the continuation of the stamp duty
rebate throughout the year. During this calendar
year, 14,999 residential units were sold in the
market, marking a 16% year-on-year (YoY) growth
in the sales volume. This is a marked improvement
over 2022 which had noted a 10% annual decline
over 2021 as the price sensitive homebuyers in the
city were affected by the multiple changes in repo
rate in 2022. Despite the continuation of stamp
duty rebate in 2022, the changes in lending costs
and EMIs adversely impacted homebuying in 2022.
With The Reserve Bank of India’s (RBI) stance to
keep repo rate stable for the larger part of calendar
year 2023, sales volume shifted to an upward
trajectory.
• In particular, H2 2023 witnessed a 32% annual
growth over the sales volume in H2 2022. In terms
of sales volume, H2 2023 is the second-best half
yearly period in the past seven years. South (40%),
Rajarhat (23%) and North (23%) remained the
most popular micro-markets from a homebuyer
perspective.
• In the past three years, the share of ticket sizes
< INR 5 mn in Kolkata’s total sales volume has
been gradually declining. In 2023, the share of
this segment reduced substantially from 62% in
2022 to 47% in 2023. High home loan rates in
the past due to previous repo rate hikes impacted
the homebuyer affordability in this segment.
Interestingly, the share of projects with ticket sizes
of INR 5-10 mn largely scaled up from 25% in 2022
to 37% in 2023. The share of residential products in
> INR 10 mn category also rose from 13% in 2022
to 17% in 2023. Since the buyer profile in mid and
high-end segments are less sensitive to changes
in EMIs due to fluctuation in lending costs, the sales
in these ticket size segments have bucked the
trend noted in the < INR 5 mn segment.
• Strong homebuying demand led to a robust
upswing in new residential launches in the market
in 2023. New launches witnessed a 28% YoY
growth over 2022 as developers launched new
inventory in the market to cater to the demand
surge. While both residential sales and launches
witnessed a positive annual growth in 2023, the
annual growth percentage in launches outpaced
sales.
• On a half yearly basis too, H2 2023 recorded a
strong 59% YoY growth in new launches over
H2 2022. Of all the micro-markets, North Zone
constituted 36% of the total units launched in
H2 2023. Barasat, Madhyamgram and Sodepur
witnessed launches in the northern belt during
this period. South Zone (31%) and Rajarhat (21%)
secured the second and third spots respectively.
Locations such as Garia and New Town saw many
launches in the mid segment during this period.
• Strong residential demand led to a 7% YoY
increase in average residential prices in 2023.
Moreover, new launches were introduced at prices
higher than before by developers as the market is
out of the shadow of the pandemic. Despite the
strengthening of residential prices, the continuation
of the stamp duty rebate will continue to provide
relief to homebuyers.
• Due to a healthy growth in new launches, the
unsold inventory rose by 4% YoY to 21,417 units
in 2023. However, the stamp duty rebate and
delivery of ready to move in inventory ensured that
even older projects found significant take-up from
homebuyers. This led to a decline in the age of
inventory from 13.3 quarters in 2022 to 11.1 in 2023
which is indicative of improving market health.
• The quarters-to-sell (QTS) for the city remained
stagnant at 6.1 in 2023. QTS is the number of
quarters required to exhaust the existing unsold
inventory in the market. The existing unsold
inventory is divided by the average sales velocity
of the preceding eight quarters to arrive at the QTS
number for the current quarter.
• Despite homebuying demand skewed in favor of
products > INR 10 mn, the QTS for this ticket-size
segment stands at 8.2 which is marginally higher
than the market level QTS of 6.1 as indicated above.
This is largely because of a significant increase
of 87% in the unsold inventory for this ticket-size
segment due to a spate of new launches in the
recent past.
• Kolkata’s residential market will continue to benefit
from the 2% stamp duty rebate and the 10% rebate
in circle rates which have been further extended to
30th June 2024 to provide support to homebuyers.
Continuation of incentives such as these will drive
buying decisions for completed and ongoing
projects in a price sensitive market like Kolkata.
MICROMARKET CLASSIFICATION
Micro market Locations
Central Park Street, Rawdon Street, AJC Bose Road, Minto Park, Elgin Road
East Kankurgachi, Beliaghata, Salt Lake, Narkeldanga, Keshtopur, EM Bypass (eastern parts)
North Baguiati, Ultadanga, Jessore Road, Shyambazar, Lake Town, BT Road, VIP Road
Rajarhat Rajarhat New Town
West
Howrah, Rishra, Hooghly, Uttarpara, Chandan Nagar, Rajpur, Kona Expressway
South Ballygunge, Alipore, Tollygunge, Narendrapur, Behala, Garia, Maheshtala, EM Bypass (southern parts)
Source: Knight Frank Research
INDIA REAL ESTATE - KOLKATA
H2 2022
H2 2023
10%
33%
36%
20%
45%
25%
0%
13%
05%
07%
04%
02%
36%
40%
31%
23%
21%
24%
08%
06%
01%
05%
03%
02%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
AVERAGE RESIDENTIAL PRICE MOVEMENT
INR/SQ M
INR <5 mn INR 5-10 mn
H2 2022
H2 2022
INR >10 mn
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
40,000
39,000
38,000
37,000
36,000
35,000
34,000
33,000
32,000
31,000
30,000
37,620
38,051
38,427
38,481
38,449
36,544
35,447
35,082
34,731
36,156
33,433
34,585
34,595
34,606
36,006
36,070
36,899
38,632
North
South
South
North
Rajarhat
Rajarhat
West
West
East
East
Central
Central
Source: Knight Frank Research
Source: Knight Frank Research
Source: Knight Frank Research
62%
25% 14%
16%
39%44%
INDIA REAL ESTATE - KOLKATA
Ticket-size
segment (INR)
Unsold Inventory (housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 8,717 (-27%) 4.7
5 – 10 mn 8,380 (29%) 7. 7
>10 mn 4,319 (87%) 8.2
Source: Knight Frank Research
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central 252 (52%) 4.7
East 396 (-63%) 1.7
North 6,918 (39%) 9.4
Rajarhat 8,288 (6%) 10.5
South 4,614 (-21%) 3.6
West 950 (13%) 2.5
Source: Knight Frank Research
71%
YoY growth in sales of units in INR 5-10 mn category in 2023
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central
Park Street 145,314-231,426 (13,500-21,500) 6% 6%
Rawdon Street 107,640-215,280 (10,000-20,000) 8% 8%
East
Kankurgachi 59,202-91,494 (5,500-8,500) 2% 2%
Salt Lake 53,820-96,876 (5,000-9,000) 12% 10%
North
Madhyamgram 27,986-39,289 (2,600-3,650) 5% 5%
BT Road 32,292-44,132 (3,000-4,100) 1% 1%
Jessore Road 37,674-59,202 (3,500-5,500) 2% 2%
Rajarhat Rajarhat New Town 37,674-78,577 (3,500-7,300) 4% 4%
South
Ballygunge 87,188-209,898 (8,100-19,500) 1% 1%
Tollygunge 55,973-159,307 (5,200-14,800) 2% 2%
Behala 34,445-49,514 (3,200-4,600) 0% 0%
Narendrapur 27,986 -48,976 (2,600-4,550) 0% 0%
INDIA REAL ESTATE - KOLKATA
Kolkata Office Market
KOLKATA MARKET SUMMARY
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.1 (0.8) 332% 0.1 (0.8) -
Transactions
in mn sq m (mn sq ft) 0.1 (1.4) 20% 0.1 (0.8) 44%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 414 (38.5) 11% - -
3.1 (33.3) 39.6%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
3%
235
2023 Change (YoY)
2023 Change (YoY)
basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
KOLKATA OFFICE MARKET ACTIVITY MN SQ M
0.02
0.04
0.28
0.05
0.05
0.04
0.00
0.03
0.03
0.11
0.01
0.21
0.00
0.06
0.56
0.07
0.01
0.04
0.00
0.04
0.00
0.02
0.02
0.05
0.02
0.05
0.00
0.05
0.00
0.05
0.08
0.08
0.02
0.08
0.02
0.05
INDIA REAL ESTATE - KOLKATA
• For Kolkata’s office market, 2023 can be
considered as one of the most remarkable calendar
years witnessing a 9 year high in office leasing
transactions. Driven by strong occupier interest
from diverse sectors, 0.1 mn sq m (0.14 mn sq ft)
of office spaces was leased in the city which also
marks a 20% year-on-year (YoY) growth over 2022.
In half yearly terms, H2 2023 leasing volume grew
by 44% over H2 2022. For Kolkata, this is the
highest half-yearly transaction volume recorded in
the past two years.
• The peripheral business district of Salt Lake
City (PBD-1) maintained its firm position as the
cynosure of occupier interest during H2 2023
accounting for 78% of Kolkata’s total leasing
volume. Suburban business district (SBD -2
Rashbehari Connector) comprised 17% of the city’s
leasing and CBD and Off CBD business districts
accounted for 6% of the total. SBD-2 (Rashbehari
Connector)’s share has expanded from 6% in H2
2022 to 17% in H2 2023 as this business district
witnessed many healthcare, e-commerce, media
and logistics sector occupiers establish office
footprint in locations such as Anandpur on Eastern
Metropolitan Bypass, amongst others.
• In terms of the end-use split of office spaces
transacted, the share of India facing businesses
which was limited to 55% in H2 2022 has
expanded to 72% in H2 2023. The share of this
end-use segmentation has been strengthening
in the wake of a strong domestic economic
environment which has led to a focus on serving
India based businesses and clients locally. Global
Capability Centres (GCC) accounted for one-fifth
of the overall leasing in H2 2023. The share of flex
space occupiers remained stable at 8% in both H2
2022 and H2 2023.
• In 2023, 0.08 mn sq m (0.8 mn sq ft) of new
office space completions became available in
Kolkata. This is the highest volume of office space
completions in the past five years in the city. This
entire volume came on the block in the second
half of the year in PBD-2 (Rajarhat New Town) and
CBD & Off CBD business districts. 76% of new
office completions were in Rajarhat New Town while
the remainder was in CBD & Off CBD. Infusion of
this new office supply in Rajarhat New Town will
give more affordable options to occupiers who are
looking at establishing or expanding office space
footprint in Kolkata.
• Driven by strong leasing, Kolkata’s office space
vacancy declined by 235 basis points compared
to the year ago period. From 41.9% in 2022, office
space vacancy reduced to 39.6% at the end of
2023. In particular, it declined from 42.7% in 2019
to sub-forty percent levels for the first time in the
past four years. Despite this significant decrease,
Kolkata continues to record the second highest
vacancies in India’s top eight markets, after
Ahmedabad. If office leasing holds steady in 2024
and speculative office completions remain absent,
the office space vacancy will reduce further.
• The average office space rents have increased
by 11% YoY in 2023 largely due to high demand
for office spaces in Salt Lake City Sector V which
accounts for a substantial volume of office space
leasing sequentially. Quality office spaces in this
business district have become expensive due to
limited space options and desired tenant profile.
Rajarhat New Town has also witnessed strong rent
growth in 2023 as it has emerged as the second-
best option for office space occupiers in Kolkata
over the years.
Business district Micro markets
Central Business District (CBD) and Off CBD
Park Street, Camac Street, Theatre Road, AJC Bose Road, Elgin Road, Rabindra Sadan, Esplanade,
Lenin Sarani, S N Banerjee Road, Central Avenue, Dalhousie Square, Mangoe Lane, Brabourne Road,
Chandni Chowk, Rawdon Street, Loudon Street, Lee Road, Lord Sinha Road, Hastings, Hare Street,
Kiran Shankar Ray Road, Upper Wood Street, Hungerford Street, Circus Avenue, Syed Amir Ali Avenue,
Chowringhee
Suburban Business District (SBD-1) Park Circus Connector HITEC City, Kondapur, Manikonda, Kukatpally, Raidurg
Suburban Business District (SBD-2) Rashbehari Connector
EM Bypass-Rashbehari Connector, Anandapur Main Road, Rajdanga, South Ballygunge, Ashutosh
Mukherjee Road, Gariahat, Hazra, Chetla, Jessore Road, Nagerbazar
Peripheral Business District (PBD-1) Salt Lake City Salt Lake Sector V
Peripheral Business District (PBD-2) Rajarhat New Town Rajarhat New Town, BT Road, Bantala
73%
Salt Lake City’s share in office leasing in 2023
INDIA REAL ESTATE - KOLKATA
PBD-1 (Salt lake City)
SBD -2 (Rashbehari Connector)
PBD -2 (Rajarhat New Town)
CBD & Off CBD
85%
6%
4%
5%
78%
17%
0%
6%
55%
72%
37%
0%
8%
8%
0%
20%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
KOLKATA OFFICE MARKET VACANCY
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
INR per sq m
31.3%
31.3%
30.5%
34.5%
32.0%
43.0%
41.0%
41.7%
41.8%
40.3%
42.5%
41.9%
43.0%
36.9%
Source: Knight Frank Research
INDIA REAL ESTATE - KOLKATA
AVERAGE DEAL SIZE TREND SQ M
1,101
1,836
1,695
1,541
1,726
2,083
1,373
1,338
725
1,763
1,818
1,630
1,550
1,668
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD & Off CBD 700-1,023 (65-95) 0% 0%
SBD-I (Park Circus Connector) 538-753 (50-70) 0% 0%
SBD-II (Rashbehari Connector) 538-915 (50-85) 0% 0%
PBD-I (Salt Lake City) 323-624 (30-58) 14% 4%
PBD-II (Rajarhat New Town) 269-517 (25-48) 11% 6%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
11%
annual growth in average transacted rents
INDIA REAL ESTATE - MUMBAI
Mumbai
MUMBAI MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
55000
60000
165,395 7. 7
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
4%
1 7.8
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
93,051 3% 42,505 -1%
Sales
(housing units)
86,871 2% 46,073 12%
Average price in
INR/sq m (INR/sq ft)
INR 84,849 (INR 7,883) 7% - -
LAUNCHES AND SALES TREND NO. OF UNITS
18,887
28,446
20,776
34,135
24,450
34,971
9,740
25,403
15,763
7,490
35,974
38,389
43,822
33,731
35,988
27,212
23,399
18,646
26,904
30,042
35,872
28,607
34,151
34,382
47,466
44,200
42,968
40,969
50,546
40,798
42,505
46,073
32,077
30,179
32,412
31,481
INDIA REAL ESTATE - MUMBAI
• The Mumbai real estate market in 2023 exhibited
robust growth despite global challenges. It retained
its status as the leading market, recording the sale
of 86,871 units, marking the highest sales volume
in the past eleven years. This upsurge in sales
was propelled by a positive economic outlook,
increased disposable income among home
buyers, a shift in preference for larger homes, and
a fear of missing out on purchasing property in the
largest real estate market amidst consistent price
escalations.
• Sales during H2 2023 improved at a faster rate,
growing at 12% YoY compared to the first half,
primarily driven by heightened demand during
festive periods such as Navratri, Dussehra, and
Diwali. Traditionally, these festive seasons witness
increased real estate activities due to positive
sentiments, combined with developer strategies
of launching new projects and offering attractive
payment plans.
• The momentum of new project launches remained
strong as developers displayed confidence in
the market potential. The residential market in
Mumbai saw the launch of 93,051 new units in
2023, the highest since 2014. In H2 2023, the city
witnessed over 42,505 unit launches, showcasing
a slight decline of 1% YoY, potentially influenced
by developers concentrating on reducing existing
inventory.
• Approximately 66% of the new supply added
during H2 2023 was observed in suburban markets
like the Peripheral Central Suburbs, Western
Suburbs, Thane, and Central Suburbs. Among
these, the Peripheral Central Suburbs contributing
30% of the total, witnessed the highest number of
launches.
• In H2 2023, a significant portion of properties
transacted in Mumbai belonged to the less than
INR 5 mn ticket size category. Despite this, the
share decreased from 48% in H2 2022 to 44% in
H2 2023. There was also a noticeable shift towards
the INR 5-10 mn category, as the share declined to
25% compared to 33% in H2 2022. The >INR 10
mn category witnessed an increase in share from
20% in H2 2022 to 31% in H2 2023 due to rising
demand for larger homes amid escalating prices.
• Residential property prices demonstrated an
upward movement in H2 2023 rising by 7% YoY,
with sustained high demand enabling developers to
implement price hikes.
• Despite a 4% YoY increase in unsold inventory
in H2 2023 due to a substantial supply influx, the
QTS decreased from 8.6 quarters in H2 2022 to
7.7 quarters in H2 2023. This reduction indicates
a quicker pace of property sales, suggesting the
market is efficiently absorbing available inventory.
• The Mumbai residential market is poised to
maintain its positive trajectory, buoyed by strong
consumer demand. Factors such as ongoing
infrastructural development projects, rising
affluence, and evolving consumer preferences
are anticipated to drive continued demand in the
foreseeable future.
MICROMARKET CLASSIFICATION
Micro market Locations
Central Mumbai Dadar, Lower Parel, Mahalaxmi, Worli, Prabhadevi
Central Suburbs Sion, Chembur, Wadala, Kurla, Ghatkopar, Vikhroli, Bhandup, Mulund
Navi Mumbai Vashi, Nerul, Belapur, Kharghar, Airoli, Panvel, Ulwe, Sanpada
Peripheral Central Suburbs Kalyan, Kalwa, Dombivli, Ambernath, Bhiwandi, Mumbra, Karjat
Peripheral Western Suburbs Vasai, Virar, Boisar, Palghar, Bhayandar, Nalasopara
South Mumbai Malabar Hill, Napean Sea Road, Walkeshwar, Altamount Road, Colaba
Thane Naupada, Ghodbunder Road, Pokhran Road, Majiwada, Khopat, Panchpakhadi
Western Suburbs Bandra, Andheri, Goregaon, Kandivali, Borivali, Santacruz, Vile Parle
Source: Knight Frank Research
INDIA REAL ESTATE - MUMBAI
1%
1%
14%
15%
12%
12%
16%
27%
10%
17%
23%
12%
6%
1%
18%
14%
1%
1%
10%
13%
15%
12%
30%
31%
16%
17%
11%
9%
1%
1%
15%
15%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
AVERAGE RESIDENTIAL PRICE MOVEMENT
INR/SQ M
<5 mn 5-10 mn
H2 2022
H2 2022
>10 mn
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
90,000
88,000
86,000
84,000
82,000
80,000
78,000
76,000
74,000
72,000
70,000
86,047
86,047
87,113
87,404
86,586
83,066
78,932
77,415
76,586
75,499
74,121
73,055
72,657
74,110
77,103
79,298
81,731
84,849
Ticket-size
segment
Unsold Inventory
(housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 80,058 (-2%) 7. 9
5 – 10 mn 38,707 (14%) 6.2
>10 mn 46,630 (7%) 9.0
Central Mumbai
Central Mumbai
Central Suburbs
Central Suburbs
Navi Mumbai
Navi Mumbai
Peripheral Central Suburbs
Peripheral Central Suburbs
Peripheral Western Suburbs
Peripheral Western Suburbs
Thane
Thane
South Mumbai
South Mumbai
Western Suburbs
Western Suburbs
Source: Knight Frank Research
48%
33% 20%
31%
25%44%
H2 2022
H2 2023
INDIA REAL ESTATE - MUMBAI
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Source: Knight Frank Research
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central Mumbai
Lower Parel 279,864-403,004 (26,000-37,440) 4% 1%
Worli 615,701-839,592 (57,200-78,000) 4% 2%
Central Suburbs
Ghatkopar 135,626-248,648 (12,600-23,100) 5% 2%
Mulund 134,335-246,280 (12,480-22,880) 4% 3%
Powai 193,967-342,295 (18,020-31,800) 6% 2%
Navi Mumbai
Panvel 43,357-85,574 (4,028-7,950) 6% 3%
Kharghar 79,869-104,971 (7,420-9,752) 6% 2%
Vashi 134,335-268,669 (12,480-24,960) 4% 2%
Peripheral Central Suburbs
Badlapur 32,249-51,829 (2,996-4,815) 7% 2%
Dombivali 57,587-97,899 (5,350-9,095) 7% 2%
Peripheral Western Suburbs
Mira Road 69,751-106,951 (6,480-9,936) 8% 3%
Virar 57,587-82,926 (5,350-7,704) 7% 2%
South Mumbai Tardeo 456,394-684,590 (42,400-63,600) 6% 2%
Thane
Ghodbunder Road 68,459-136,918 (6,360-12,720) 6% 2%
Naupada 158,231-271,253 (14,700-25,200) 5% 2%
Western Suburbs
Andheri 171,148-296,656 (15,900-27,560) 6% 3%
Bandra(W) 575,874-806,224 (53,500-74,900) 7% 2%
Borivali 162,752-290,628 (15,120-27,000) 8% 3%
Dahisar 103,657-184,280 (9,630-17,120) 7% 3%
Goregaon 151,127-279,003 (14,040-25,920) 8% 3%
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central Mumbai 7,136 (-4%) 22.2
Central Suburbs 31,786 (-6) 10.1
Navi Mumbai 30,397 (16%) 11.5
Peripheral Central Suburbs 6,481 (-48%) 1.1
Peripheral Western Suburbs 7,021 (-26%) 1.9
South Mumbai 5,982 (11%) 29.0
Thane 37,948 (22%) 16.2
Western Suburbs 38,644 (14%) 12.5
Total
7. 7
INDIA REAL ESTATE - MUMBAI
Mumbai Office Market
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.28 (3.1) 51.6% 0.16 (1.7) 66.7%
Transactions
in mn sq m (mn sq ft) 0.69 (7.4) 16.3% 0.39 (4.2) 22.8%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 1,227 (114) 3.6% - -
14.9 (161.4) 20.4%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
1.9%
80
2023 Change (YoY)
2023 Change (YoY)
basis points increase
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
0.7
0.
8
MUMBAI OFFICE MARKET ACTIVITY MN SQ M
0.2
0.2
0.3
0.5
0..5
0.4
0.1
0.3
0.7
0.3
0.4
0.2
0.2
0.4
0.3
0.5
0.3
0.4
0.2
0.2
0.1
0.2
0.3
0.2
0.1
0.3
0.1
0.3
0.00
0.3
0.2
0.4
0.3
0.4
0.3
0.5
INDIA REAL ESTATE - MUMBAI
• Mumbai witnessed approximately 0.69 mn sq
m (7.4 mn sq ft) of leasing, marking a 16.3% YoY
increase in 2023 with a significant number of
BFSI (Banking, Financial Services, and Insurance)
firms dominating the leasing landscape. Mumbai’s
office leasing trajectory has consistently shown
improvement, hitting its highest transactional
volume since 2020. This upsurge in leasing activity
is attributed to optimistic market sentiments and
substantial investments in enhancing infrastructure.
India facing businesses accounted for the majority
of transactions, contributing around 80% to the
overall share of transactions in 2023, while GCCs
(Global Capability Centres) followed as the second-
highest contributors, making up 10% of the total
transactions.
• In the second half of 2023, Mumbai witnessed
around 0.39 mn sq m (4.2 mn sq ft) of leasing,
marking a 22.8% YoY increase. The PBD and SBD
Central submarkets jointly accounted for 49% of
the total transactions in H2 2023.
• Number of expansion and relocation deals
constituted 46% and 43% of the total transaction
volume respectively in the second half of 2023.
Numerous companies are actively reassessing
their current space utilization and expansion
strategies, with tenants progressively embracing
hybrid working models to enhance the efficiency of
their office spaces.
• Most transactions in the second half of 2023 were
centered in the Lower Parel area, comprising a total
area of 0.07 mn sq m (0.72 mn sq ft), followed by
Goregaon, which recorded transactions covering an
area of 0.04 mn sq m (0.40 mn sq ft). Additionally,
Powai and Andheri accounted for transactions
of 0.03 mn sq m (0.32 mn sq ft) each while BKC
accounted for total transactions of 0.02 mn sq m
(0.17 mn sq ft).
• There has been a notable surge of new supply in
Mumbai due to increased office transactions and
enhanced developer confidence. The total supply
added during the year stood at 0.28 mn sq m (3.1
mn sq ft), indicating a robust increase of 51.6%
YoY. Specifically, 0.16 mn sq m (1.7 mn sq ft) of new
supply was observed in H2 2023. As transaction
volumes continue to rise, it is anticipated that
developers will persist in introducing new supply in
the coming period.
• Most of the new supply in H2 2023 was noticed in
the SBD West micro market, constituting 40% of
the total, followed by PBD with 20%.
• Rents in the Mumbai office market have
consistently risen indicating stable growth, post
pandemic. In 2023, rents experienced a YoY growth
of 3.6%. With the operationalization of Metro 2A
and 7 lines, along with improved infrastructure, it is
expected that rentals will continue to improve.
• Due to a higher number of completions of new
projects in 2023, the vacancy rate increased by 80
basis points to 20.4% in H2 2023.
• Occupier sentiments in the country’s commercial
capital remain optimistic in H2 2023 as the
economic environment steadily improves and
physical occupancy levels rise. The steady
improvement in transaction volumes and rents
since the pandemic signifies strength and
resilience and this bodes well for the market as it
steps into the new year.
Business district Micro markets
Central Business District (CBD and Off CBD) Nariman Point, Cuffe Parade, Ballard Estate, Fort, Mahalaxmi, Worli
Bandra Kurla Complex & Off Bandra Kurla Complex (BKC & Off BKC) BKC, Bandra (E), Kalina and Kalanagar
Central Mumbai Parel, Lower Parel, Dadar, Prabhadevi
Secondary Business District (SBD) West Andheri, Jogeshwari, Goregoan, Malad
Secondary Business District (SBD) Central Kurla, Ghatkopar, Vikhroli, Kanjurmarg, Powai, Bhandup, Chembur
Peripheral Business District (PBD) Thane, Airoli, Vashi, Ghansoli, Rabale, Belapur
INDIA REAL ESTATE - MUMBAI
BKC & Off-BKC
CBD & Off-CBD
PBD
SBD West
Central Mumbai
SBD Central
13%
4%
26%
27%
10%
20%
6%
1%
26%
21%
22%
23%
80%
80%
1%
1%
12%
8%
8%
12%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
25%
20%
15%
10%
5%
0%
INR per sq m
21.9%
20.2%
21.5%
19.7%
17.9%
17.5%
17.9%
19.8%
19.7%
20.9%
20.2%
19.6%
19.1%
20.4%
Source: Knight Frank Research
INDIA REAL ESTATE - MUMBAI
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
BKC & Off-BKC 1,894 – 3,391 (176-315) 2.5% 0.5%
CBD & Off-CBD 1,528-2497 (142-232) 2.9% 0.5%
Central Mumbai 1,184-2,153 (110-200) 3.2% 0.5%
PBD 527-969 (49-90) 3.9% 1%
SBD Central 861-1,938 (80-180) 3.6% 1%
SBD West 797-1,399(74-130) 2.7% 0.5%
80%
India Facing Transactions in 2023
AVERAGE DEAL SIZE TREND SQ M
2,217
2,421
2,548
3,241
2,700
3,404
3,892
2,331
1,851
3,627
3,094
2,920
2,038
2,336
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
INDIA REAL ESTATE - NCR
NCR
NCR MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
5000
10000
15000
20000
25000
30000
35000
40000
103,603 7.0
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
3%
23.9
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
62,649 -1% 32,911 -5%
Sales
(housing units)
60,002 3% 29,888 2%
Average price in
INR/sq m (INR/sq ft)
INR 51,226 (INR 4,759) 6% - -
LAUNCHES AND SALES TREND NO. OF UNITS
29,458
25,000
34,000
23,800
17,462
23,092
9,273
16,913
4,800
6,926
9,123
6,696
7,846
19,852
15,059
22,976
1,422
5,446
8,402
15,788
2,943
1 1 , 4 74
17,642
23,599
28,726
29,101
34,507
29,359
29,738
30,114
32,911
29,886
17,188
20,465
18,047
22,596
INDIA REAL ESTATE - NCR
• In 2023, the National Capital Region (NCR)’s
primary residential market continued to witness
unhampered growth in homebuying demand.
Clocking a decadal high, 60,002 residential units
were sold during the year which is the highest since
2013. However, the robust annual growth in demand
witnessed in 2021 and 2022 moderated by the
end of this calendar year, while still maintaining an
upward trajectory. 2023’s residential sales market
volume registered a 3% year-on-year (YoY) growth
over 2022 as the pent-up demand that arose as
a byproduct of the pandemic was fulfilled already.
Lack of ready to move in projects in desired
locations contributed to some delay in homebuying
decisions which restricted the upward momentum
in sales. Despite these concerns, homebuyers
continued to lap up new products by credible
developers across different cities in NCR as the
year drew to a close.
• In terms of half yearly sales volume, H2 2023’s
residential sales volume represents a 2% YoY
growth over H2 2022. Reserve Bank of India’s (RBI)
status-quo stance on the repo rate hike cycle in
2023 coupled with a positive sentiment towards
homebuying during the festive period continued to
support new sales in the region. Post pandemic,
buyer confidence in timely delivery of new projects
has been reinstated to some extent. These factors
have contributed to making H2 2023 the strongest
half yearly period since H1 2013.
• Of the total units sold in H2 2023, Gurugram
accounted for a 45% share. Premium segment
projects in Gurugram’s key locations continue to
draw a substantial number of homebuyers who
are looking for contemporary amenities and new
addresses that are synonymous with luxury. The
imminent completion of Dwarka Expressway has
also given a fillip to homebuying in locations near
Central Peripheral Road and Southern Peripheral
Road.
• Greater Noida (27%), Noida (12%) and Ghaziabad
(12%) cumulatively accounted for a 51% share of
the total sales pie. The Uttar Pradesh government’s
stance to tackle prolonged issues with respect to
stalled projects has helped to dispel legacy issues
within these markets. This has helped developers
attract homebuyers for newly launched projects.
• Delhi and Faridabad comprised a share of 2%
each in the total sales pie as the supply of new
residential projects in these primary markets
remain limited.
• In contrast to residential sales, new launches
remained largely stagnant in 2023 witnessing a
marginal 1% YoY dip over 2022. From 63,233 units
in 2022, new launches tapered off to 62,649 units
in 2023. During 2023, developers continued to
launch new projects to capitalise on the demand-
run for new homes and focused on new land
acquisitions to create a future pipeline of projects.
• In H2 2023, NCR’s total launches declined by 5%
over H2 2022. Gurugram accounted for 65% of the
total half yearly launches as its growing peripherals
received a major boost with improving connectivity,
making them a hotbed for developers to expand
real estate development. Noida comprised 14%
of the total launches in this period as many
developers launched new projects to meet the
latent homebuying demand. In the past two years,
many homebuyers in Noida had held off on home
purchase decisions due to a lack of new project
options to choose from as launches had almost
dried up in the city. In H2 2022 and H1 2023, Noida
had accounted for only 4% and 3% share in NCR’s
total launches, respectively.
• In the past two years, the share of residential
products with ticket sizes > INR 10 mn in the total
sales volume has consistently surged in the NCR.
From 37% in 2021, the share of this category
has expanded to 65% in 2023. Homebuyer
preference for products priced upwards of INR
10 mn continued to remain strong as spacious
homes with high-end amenities are redefining post
pandemic living by high-net-worth individuals.
• The sales volume in the INR 5-10 and < 5 mn
category continues to reduce as homebuyers
considering purchase of these products have been
more price sensitive to escalating borrowing costs
due to previous repo rate revisions. For the INR
5-10 mn category, the percentage share in total
sales volume has declined from 32% in 2022 to
23% in 2023. For products priced < INR 5 mn, the
percentage share has shrunk from 23% to 12%
in the same period. In particular, this category has
been the hardest hit by the repo rate revisions as
the buyer profile for such products usually look
at affordable home ownership options and any
changes to lending costs hampers decision-
making much sooner than with other categories.
• For the past two years, upward price revision in
average residential prices has continued across
NCR. In 2023, the average residential prices rose
by 6% YoY over 2022. This price growth is largely
led by a continued homebuying spree and the
launch of new inventory at higher prices. However,
this price rise is lower compared to the 7% YoY
percentage growth noted in 2022.
• At the end of 2023, NCR’s unsold inventory rose
by 3% YoY to 103,603 units. Due to many new
projects being launched in the market, the available
units rose by this percentage despite healthy sales
velocity.
• Despite a 3% annual growth in the unsold
inventory, the quarters-to-sell (QTS) scaled down
from 8.6 in 2022 to 7.0 at the end of 2023. This is
attributed to healthy sales velocity in this calendar
year as the homebuying demand has sustained
despite inflationary pressures. QTS is the number
of quarters required to exhaust the existing unsold
inventory in the market. The existing unsold
inventory is divided by the average sales velocity
of the preceding eight quarters to arrive at the QTS
number at the end of the current quarter.
• Due to homebuying demand skewed in favor of
products > INR 10 mn, the QTS for this ticket-
size segment stands at 4.5 which is much below
the market level QTS of 7.0 as indicated above.
A lower QTS than the overall market signals a
healthier scenario as sales velocity remains strong
to support the uptake of these products. On the
other hand, high QTS of 14.0 for products < INR
5 mn signifies that the unsold inventory in this
segment will take nearly double the time to exhaust
compared to products of all segments in NCR
cumulatively.
46%
YoY growth in sales of residential products above
INR 10 mn in 2023
INDIA REAL ESTATE - NCR
61%
41%
4%
14%
22%
27%
6%
13%
3%
2%
4%
3%
65%
45%
14%
12%
10%
27%
7%
12%
3%
2%
1%
2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NCR TICKET SIZE SPLIT COMPARISON OF SALES DURING
AVERAGE RESIDENTIAL PRICE MOVEMENT
INR/SQ M
INR<5 mn INR 5-10 mn
H2 2022
H2 2022
INR >10 mn
H2 2023
H2 2023
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
55,000
50,000
45,000
40,000
35,000
30,000
INR per sq m
48,553
49,281
46,777
45,747
45,747
44,832
45,908
45,639
47,362
47,695
44,617
45,822
44,832
45,228
47,760
48,330
49,923
51,226
Ticket-size
segment (INR)
Unsold Inventory
(housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 36,266 (-17%) 14.0
5 – 10 mn 30,669 (-15%) 7.6
>10 mn 36,668 (72%) 4.5
Gurugram
Gurugram
Noida
Noida
Greater Noida
Greater Noida
Ghaziabad
Ghaziabad
Delhi
Delhi
Faridabad
Faridabad
Source: Knight Frank Research
20%
30% 50%
65%
23%12%
H2 2022
H2 2023
INDIA REAL ESTATE - NCR
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Source: Knight Frank Research
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Delhi
Dwarka 69,966–118,404 (6,500–11,000) 6% 3%
Greater Kailash -II 247,572–398,268 (23,000–37,000) 1% 1%
Faridabad
Sector 82 34,445–38,750 (3,200–3,600) 0% 0%
Sector 88 33,368–36,597 (3,100–3,400) 0% 0%
Ghaziabad
NH-24 Bypass 31,217–33,960 (2,900–3,155) 0% 0%
Raj Nagar Extension 31,754–35,812 (2,950–3,327) 0% 0%
Greater Noida
Sector 1 34,606–48,438 (3,215–4,500) 7% 3%
Omicron 1 32,238–39,827 (2,995–3,700) 3% 0%
Gurugram
Sector 77 56,511– 80,730 (5,250–7,500) 9% 5%
Sector 81 58,126–76,424 (5,400–7,100) 6% 2%
Noida
Sector 78 49,514–64,584 (4,600–6,000) 1% 1%
Sector 143 45,209–54,896 (4,200–5,100) 1% 1%
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Delhi 3,212 (-) 8.9
Faridabad 2,699 (-20%) 8.4
Ghaziabad 11,402 (-25%) 6.0
Greater Noida 25,155 (-26%) 6.8
Gurugram 51,978 (47%) 8.0
Noida 9,160 (-8%) 4.5
INDIA REAL ESTATE - NCR
NCR Office Market
NCR MARKET SUMMARY
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.7 (7.0) -11% 0.3 (3.1) -43%
Transactions
in mn sq m (mn sq ft) 0.9 (10.1) 14% 0.5 (5.0) 4%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 917.1(85.2) 2% - -
17.5(188.9) 12.3%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
4%
219
2023 Change (YoY)
2023 Change (YoY)
basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
0.7
0.
8
NCR OFFICE MARKET ACTIVITY MN SQ M
0.51
0.34
0.56
0.34
0.26
0.33
0.17
0.35
0.17
0.21
0.33
0.37
0.55
0.35
0.59
0.45
0.08
0.19
0.20
0.24
0.19
0.30
0.20
0.40
0.20
0.40
0.50
0.40
0.37
0.47
0.28
0.47
0.30
0.30
0.32
0.37
INDIA REAL ESTATE - NCR
• In 2023, the National Capital Region (NCR)
witnessed an unprecedented growth in office
space leasing recording 0.9 mn sq m (10.1 mn
sq ft) in transaction volume. Not only is 2023’s
gross leasing stronger by 14% over 2022, but
this is also the year of a decadal high for NCR.
Resilient domestic economic growth has supported
occupier demand from diverse sectors and is
demonstrative of a positive trend for office space
absorption despite weak global cues. The growing
trend of work from office has improved occupier
confidence and brought traditional office formats
back to the centre stage. While occupiers were
skeptical towards office space expansion during
the pandemic years, they are now taking a long-
term view about office space occupancies which
bodes well for office market health in NCR.
• In H2 2023, nearly 0.5 mn sq m (5.1 mn sq ft)
office spaces were leased in the various business
districts of NCR representing a 4% annual growth
over H2 2022 transaction volume. While the hybrid
work model still continues to exist in sectors such
as Information Technology, the emergence of office
space requirements from core businesses such
as banking, financial services and insurance (BFSI),
manufacturing, consulting and education has been
strong in the second half of the year.
• Of the total volume of office spaces leased during
H2 2023, Gurugram accounted for 65% share
of the pie, increasing from 55% of the total in H2
2022. Noida’s share has moderated from 41%
of NCR’s total leasing in H2 2022 to 20% in H2
2023. In H2 2022, Secondary Business District
(SBD) Delhi had accounted for 3% of the total
office spaces transacted in NCR. The share of this
business district has grown to 11% of the total in
H2 2023 on the back of demand resurgence for
traditional office spaces.
• In Gurugram, DLF Cyber City, Golf Course Extension
Road, NH-48, Golf Course Road and Udyog Vihar
garnered a lot of occupier interest, and many deals
were sealed in these five locations during this
calendar year. In Noida, locations along the Noida-
Greater Noida Expressway such as Sector 135, 142
as well as Sector 18 witnessed a lot of occupier
interest.
• In terms of space utilisation, spaces catering to
India facing operations comprised 61% of the
total space followed by Global Capability Centres
(GCCs) that accounted for 29% of the end usage.
The remaining 10% was split between flex space
occupiers (6%) and third-party IT services (4%).
The share of India facing businesses and GCCs
cumulatively has grown from 69% in H2 2022 to
90% in H2 2023. The share of both these end-use
segments has grown substantially in the past
one year as businesses focus on serving India
focused clients in a growing domestic market.
The strengthening GCC play in NCR is driven by
the dynamics of the financial services domain and
many other sectors as their role evolves beyond
routine tasks to encompass innovation and cutting-
edge technologies.
• In H2 2023, office space demand for flexible
working space formats decelerated as the occupier
outlook has shifted from scaling up temporarily
to planning of office spaces strategically for the
long haul. From 17% in H2 2022, the share of flex
spaces has shrunk to 6% in H2 2023. Flexible
space operators largely leased co-working seats
in the various locations of Gurugram, followed by
Noida. With the pandemic now completely out of
the picture, preference for co-working spaces is
getting rationalized in favour of traditional office
formats. However, intrinsic demand for co-working
and managed offices spaces from certain occupier
segments continues, much like before the
pandemic.
• In 2023, new office space completions of 0.7 mn
sq m (7.0 mn sq ft) were witnessed in NCR. This
is indicative of an 11% YoY degrowth as limited
office buildings received occupancy certificates
during the period. On a half yearly basis too, new
completions in H2 2023 reduced by 43% YoY.
Similar to the trend witnessed in case of office
space demand, Gurugram (49%) and Noida (43%)
comprised maximum infusion of new supply.
A growing demand for office spaces in these
cities has led to constant greenfield office space
development. With growing occupier focus on ESG
compliant buildings, many new office assets with
sustainable focus are now coming on the block.
• Record office space leasing during 2023 led to a
219 basis points decline in vacancies in NCR to
12.3% at the end of this calendar year. If the trend
of sustained occupier demand continues in 2024,
we may witness further correction in office space
vacancies which is good news for the overall health
of NCR office market.
• In 2023, NCR’s average transacted office rents
witnessed a 2% YoY growth over 2022. With 2023
transaction volumes for office leasing breaching the
previous record high of 2022, rents inched up on
the back of reduced availability of quality spaces.
• The stupendous growth in office space demand is
also clearly visible in the number of deals closed in
NCR in 2023. 324 office leasing deals were closed
in NCR in 2023, which is also the highest in the
past six years. As the contours of NCR’s business
districts have expanded in the past few years,
new office development and unceasing occupier
interest have led to the record number of deal
closures in the period under review.
Business district Micro markets
CBD Delhi Connaught Place, Barakhamba Road, Kasturba Gandhi Marg and Minto Road
SBD Delhi Nehru Place, Saket, Jasola, Bhikaji Cama Place, Mohan Cooperative, Okhla and Aerocity
Gurugram Zone A M G Road, NH-8, Golf Course Road and Golf Course Extension Road
Gurugram Zone B DLF CyberCity, Sohna Road, Udyog Vihar and Gwal Pahari
Gurugram Zone C Manesar
Noida Sectors 16, 18, 62, 63 and the Noida-Greater Noida Expressway
Greater Noida Sector Alpha, Beta, Gamma and Tech Zone
INDIA REAL ESTATE - NCR
Gurugram
Noida
CBD Delhi
SBD Delhi
55%
41%
01%
03%
65%
20%
04%
11%
57%
61%
14%
04%
17%
6%
12%
29%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
NCR OFFICE MARKET VACANCY
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
25%
20%
15%
10%
5%
0%
INR per sq m
17.7%
16.8%
16.5%
16.1%
16.8%
17.2%
16.3%
16.3%
16.5%
15.5%
14.4%
14.5%
13.6%
12.3%
Source: Knight Frank Research
INDIA REAL ESTATE - NCR
AVERAGE DEAL SIZE TREND SQ M
2,217
2,421
3,023
3,241
4,340
3,872
2,927
2,301
2,343
3,190
4,166
3,017
2,949
2,859
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD Delhi 2,347–3,767 (218–350) 0% 0%
SBD Delhi 915–2,153 (85–200) 0% 0%
Gurugram Zone A 1,184–1,776 (110–165) 2% 1%
Gurugram Zone B 915–1,507 (85–140) 2% 2%
Gurugram Zone C 269–377 (25–35) 0% 0%
Noida 538–947 (50–88) 2% 2%
Faridabad 484–592 (45–55) 0% 0%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
65%
Gurugram’s share in office leasing in H2 2023
INDIA REAL ESTATE - PUNE
Pune
PUNE MARKET SUMMARY
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Launches (Units) Sales (Units)
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Residential Market
0
5000
10000
15000
20000
25000
30000
39,214 3.4
Unsold inventory (housing units) 2023
Quarters to sell (in quarters) 2023
-15%
9.5
Change (YoY)
Age of unsold inventory (in quarters) 2023
Parameter 2023 2023 Change (YoY) H2 2023 H2 2023 Change (YoY)
Launches
(housing units)
42,437 10% 21,203 -0.2%
Sales
(housing units)
49,266 13.% 27,596 28%
Average price in
INR/sq m (INR/sq ft)
INR 48,515 (INR 4,507) - - -
LAUNCHES AND SALES TREND NO. OF UNITS
12,762
15,524
18,135
20,740
8,713
15,688
11,300
16,800
7,905
4,800
14,100
18,584
21,396
17,364
23,264
15,445
13,435
10,049
21,557
16,870
20,477
17,474
20,012
19,744
17,393
21,797
21,247
21,613
21,234
21,670
21,203
27,596
17,480
16,486
16,451
17,070
INDIA REAL ESTATE - PUNE
• In 2023, Pune’s real estate market displayed
continued growth, achieving its highest-ever
residential sales figures in the last eleven years.
The total sales in the Pune residential sector
surged by 13% YoY to reach 49,266 units. Notably,
a significant portion of homebuyers in Pune
comprise migrant workers, particularly salaried
employees seeking housing mortgages. Their
perception of the market continues to remain
positive, despite high home loan rates.
• Sales in H2 2023 soared by 28% YoY to 27,596
units. predominantly influenced by heightened
demand during the festive season, especially for
ready-to-move-in units and mid-segment homes.
• The number of new project launches remained
robust, with Pune’s residential market witnessing
42,437 units launched in 2023, marking a 10%
YoY increase. Like Mumbai, there was a noticeable
demand for larger homes and apartments in Pune
with dedicated workspaces. Gated communities
with amenities and green spaces also continued to
garner increased interest.
• Pune’s evolution as a thriving Information
Technology hub, coupled with the government’s
focus on infrastructure development, has
positioned the city as a crucial housing destination.
Consequently, leading developers are actively
pursuing opportunities in this market.
• In H2 2023, Pune saw a substantial shift in the
share contribution of new project launches across
zones, with the Western Zone accounting for 40%
of total launches. Areas like Hinjewadi and Baner
in the West Zone, near major workplaces, are
expected to witness increased sales momentum
as the trend of returning to office-based work
grows, attracting homebuyers seeking proximity to
their workplaces.
• Sales volumes in the Pune real estate market
was predominantly concentrated in the West,
comprising 41% of the total share, while the North
and East accounted for 24% and 22% respectively.
These regions emerged as key areas for substantial
residential property transactions, indicating high
demand and market activity.
• The sale of properties in the INR 5-10 mn ticket size
category increased its share from 45% in H2 2022
to 47% in H2 2023, while properties below INR 5
mn witnessed a decline from 46% to 35% YoY in
H2 2023. Additionally, properties exceeding INR
10 mn saw a significant rise in share, from 9% in
H2 2022 to 18% in H2 2023, indicating a growing
demand for high-value properties.
• Residential prices in Pune grew by 5% YoY in H2
2023, aligning with robust demand and allowing
developers to adjust prices accordingly.
• Pune’s QTS metric decreased from 4.6 quarters
in H2 2022 to 3.4 quarters in H2 2023, reflecting
strong market demand and rapid property sales.
The reduction in the age of unsold inventory from
11.7 quarters in H2 2022 to 9.5 quarters in H2 2023
indicates increased buyer interest in both new and
existing projects.
MICROMARKET CLASSIFICATION
Micro market Locations
Central Koregaon Park, Boat Club Road, Erandwane, Deccan, Kothrud, Model Colony
East Viman Nagar, Kharadi, Wagholi, Hadapsar, Dhanori
West Aundh, Baner, Wakad, Hinjewadi, Bavdhan, Pashan
North Pimpri, Chinchwad, Moshi, Chikhali, Chakan, Talegaon
South Kondhwa, Ambegaon, Undri, Dhayari, Warje, Sinhgad Road
Source: Knight Frank Research
INDIA REAL ESTATE - PUNE
AVERAGE RESIDENTIAL PRICE MOVEMENT INR/SQ M
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
55,000
50,000
45,000
40,000
35,000
30,000
51,866
52,040
52,313
52,313
52,313
48,520
48,003
47,064
46,323
45,652
43,826
43,232
43,160
43,052
45,657
46,200
47,,201
48,515
Source: Knight Frank Research
16% 3%
23% 28%
28% 23%
11% 15%
22% 32%
3% 3%
22% 22%
40% 41%
22% 24%
14% 11%
H2 2022
H2 2022
H2 2023
H2 2023
Central Central
East East
West West
North North
South South
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
PUNE TICKET SIZE SPLIT COMPARISON OF SALES DURING
<5 mn 5-10 mn
>10 mn
Ticket-size
segment
Unsold Inventory
(housing units)
(YoY Change)
Quarters-to-sell
(QTS)
0 – 5 mn 26,973 (-15%) 5.4
5 – 10 mn 4,887 (-38%) 0.9
>10 mn 7,355 (11%) 5.2
46%
45% 9%
18%
47%35%
H2 2022
H2 2023
INDIA REAL ESTATE - PUNE
RESIDENTIAL PRICE MOVEMENT IN SELECT LOCATIONS
MICROMARKET HEALTH
Source: Knight Frank Research
Micro Market Location
Price range in H2 2023 in
INR/sq m (INR/sq ft)
12 month Change 6 month Change
Central
Koregaon Park 144,130-188,478 (13,390-17,510) 3% 1%
Kothrud 83,959-156,724 (7,800-14,560) 4% 3%
Erandwane 152,580-203,440 (14,175-18,900) 5% 3%
Boat Club Road 162,321-279,864 (15,080-26,000) 4% 1%
East
Kharadi 58,760-88,695 (5,459-8,240) 3% 1%
Wagholi 39,181-61,570 (3,640-5,720) 4% 1%
Dhanori 54,250-76,855 (5,040-7,140) 5% 2%
Hadapsar 63,292-90,418 (5,880-8,400) 5% 2%
West
Aundh 87,317-145,529 (8,112-13,520) 4% 1%
Baner 74,594-12,4324 (6,930-11,550) 5% 1%
Hinjewadi 54,250-90,418 (5,040-8,400) 5% 1%
Wakad 61,614-98,124 (5,724-9,116) 6% 1%
North
Moshi 41,022-66,522 (3,811-6,180) 3% 2%
Chikhali 38,804-57,652 (3,605-5,356) 3% 1%
Chakan 33,261-42,130 (3,090-3,914) 3% 2%
South
Ambegaon 49,262-76,124 (4,576-7,072) 4% 2%
Undri 43,239-55,435 (4,017-5,150) 3% 1%
Kondhwa 50,999-63,196 (4,738-5,871) 3% 4%
Micro-market Unsold Inventory (housing units) (YoY Change) Quarters-to-sell (QTS)
Central 8,727 (62%) 26.6
East 9,334 (-24%) 3.1
West 16,405 (-15%) 5.0
North 4,581 (-43%) 2.2
South 100 (-90%) 0.1
Pune City 39,214 (-15%) 3.4
INDIA REAL ESTATE - PUNE
Pune Office Market
PUNE MARKET SUMMARY
Note – 1 square metre (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
Parameter 2023
2023
Change (YoY) H2 2023
H2 2023
Change (YoY)
Completions
in mn sq m (mn sq ft) 0.34 (3.6) -45.5% 0.10 (1.1) -35.8%
Transactions
in mn sq m (mn sq ft) 0.62 (6.7) 9.0% 0.41 (4.4) 54.1%
Average transacted rent
in INR/sq m/month (INR/sq ft/month) 791.2 (73.5) 2.1% - -
8.58(91.2) 6.5%
2023 Stock mn sq m (mn sq ft)
2023 Vacancy (%)
4.1%
380
2023 Change (YoY)
2023 Change (YoY)
basis points decrease
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
Source: Knight Frank Research
Completions Transactions
0.0
0.1
0.
2
0.
3
0.
4
0.
5
0.
6
0.7
0.
8
PUNE OFFICE MARKET ACTIVITY MN SQ M
0.51
0.34
0.56
0.34
0.26
0.33
0.17
0.35
0.17
0.21
0.33
0.37
0.55
0.35
0.59
0.45
0.08
0.19
0.20
0.24
0.19
0.30
0.20
0.40
0.20
0.40
0.50
0.40
0.37
0.47
0.28
0.47
0.30
0.30
0.32
0.37
INDIA REAL ESTATE - PUNE
• Pune recorded a sizeable growth in transactions
with approximately 0.62 mn sq m (6.7 mn sq
ft) of office space leased in 2023, marking the
highest annual registrations to date. The IT-ITeS
sector remained the primary driver of demand,
leveraging Pune’s status as a significant hub for IT
and engineering talent. Anticipated enhancement
in connectivity through ongoing infrastructure
projects such as the expansion of the metro rail, are
expected to bolster real estate growth, particularly
in areas along these new metro lines.
• On a half yearly basis, Pune saw a total of 0.41 mn
sq m (4.4 mn sq ft) of office space transactions,
indicating a 54% year-on-year (YoY) growth. Global
Capability Centre (GCC) transactions notably
contributed to 56% of the total transactions in the
latter half of 2023, while India facing transactions
comprised 29%.
• Throughout the second half of 2023, demand
predominantly surged in micro markets like
Peripheral Business District (PBD) East, Secondary
Business District (SBD) East, and Peripheral
Business District (PBD) West, collectively
accounting for 84% of transactions. Individually,
they contributed 35%, 32%, and 17%, respectively.
• Kharadi emerged as the top-performing market,
representing 35% of total transactions in the latter
half of 2023. Hinjewadi Phase 1 and 2 collectively
accounted for 15%, closely followed by Viman
Nagar, contributing 13% to the total transaction
volume.
• Global Capability Centre (GCC) transactions
comprised 56% of the transaction volume in
H2 2023. Pune’s diverse talent pool, improving
infrastructure, presence of IT parks, and seamless
connectivity collectively position it as a preferred
choice for GCCs.
• Pune witnessed a significant YoY decline of 46%
in annual office completions, totaling 0.34 mn sq m
(3.6 mn sq ft). Completions are expected to improve
in the coming months with new projects nearing
completion.
• Most of the new supply in H2 2023 was observed
in the SBD West micro market, accounting for 50%
of the total, followed by SBD East with 30%.
• Rents in Pune’s office market exhibited moderate
growth in 2023 nearly reaching pre-pandemic
levels, with a YoY growth of 2%. This rise in rent
is largely influenced by increased transactions
compared to the limited office supply observed in
the city.
• Due to a lower number of completions in 2023, the
vacancy rate in H2 2023 decreased by 380 basis
points to 6.5%. The city anticipates new supply in
2024 to provide some relief.
• Pune’s office market continues to display strength,
attracting Global Capability Centers (GCCs) due to
its robust workforce and improving infrastructure.
The market is adapting to changing dynamics,
notably embracing flexible workspaces and
sustainability as key emerging trends.
Business district Micro markets
Central Business District (CBD and Off-CBD) Bund Garden Road, S B Road, Camp, Deccan, University Road, Shankar Sheth Road
Secondary Business District (SBD) East Kalyani Nagar, Yerwada, Nagar Road, Hadapsar
Peripheral Business District (PBD) East Kharadi, Phursungi
Secondary Business District (SBD) West Wakdewadi, Aundh, Baner, Kothrud, Balewadi
Peripheral Business District (PBD) West Hinjewadi, Bavdhan, Wakad
Secondary Business District (SBD) North Pimpri, Chinchwad, Khadki, Moshi and Bhosari
INDIA REAL ESTATE - PUNE
CBD
PBD East
SBD East
SBD West
PBD West
8%
22%
25%
22%
23%
8%
35%
32%
8%
17%
11%
29%
3%
6%
46%
9%
40%
56%
India Facing
Third party
IT Services
Flex
Global Capability
Centres
Source: Knight Frank Research
Source: Knight Frank Research
H2 2022
H2 2022
H2 2023
H2 2023
PUNE OFFICE MARKET VACANCY
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
16%
14%
12%
10%
8%
6%
4%
2%
0%
INR per sq m
7. 9 %
5.8%
5.7%
7. 5 %
5.2%
4.2%
4.7%
5.9%
8.7%
10.5%
11.9%
10.3%
10.2%
6.5%
Source: Knight Frank Research
INDIA REAL ESTATE - PUNE
AVERAGE DEAL SIZE TREND SQ M
4,442
3,910
4,166
4,327
5,043
4,484
5,054
4,918
4,286
5,452
6,831
4,293
3,744
4,473
Source: Knight Frank Research
Rental value range in H2 2023 in INR/
sq m/month (INR/sq ft/month) 12-month change 6-month change
CBD & off CBD 819-1,420 (76.125-131.95) 1.5% 0.0%
SBD East 665-1,275 (61.8-118.45) 3.0% 1.0%
SBD West 659-1,043 (61.2-96.9) 2.0% 0.0%
PBD East 662-1,092 (61.5-101.475) 2.5% 1.0%
PBD West 489-815 (45.45-75.75) 1.0% 1.0%
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
0.62 (6.7)
Office Transactions Reach All Time High
m sq m
mn sq ft
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REPORT AUTHORS
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Divya Agarwal
Vice President - Research
V Shilpashree
Assistant Vice President - Research
Naresh Sharma
Assistant Vice President - Research
Urvisha Jagasheth
Lead Consultant - Research
-----------------------------------------
GRAPHICS & DESIGN
Mahendra Dhanawade
Senior Manager Graphic & Design
-----------------------------------------
AHMEDABAD
Balbirsingh Khalsa
Branch Director
-----------------------------------------
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Shantanu Mazumder
Executive Director
-----------------------------------------
CHENNAI
Srinivas Ankipatti
Senior Director
-----------------------------------------
HYDERABAD
Joseph Thilak
National Director - Occupier Strategy and
Solutions (Hyderabad & Chennai)
-----------------------------------------
KOLKATA
Abhijit Das
Senior Director - East
-----------------------------------------
NCR
Mudassir Zaidi
Executive Director - North
mudassir.[email protected]
-----------------------------------------
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P Vilas
Branch Director
p.vilas@in.knightfrank.com
-----------------------------------------
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Chairman and Managing Director
shishir.baijal@in.knightfrank.com
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Executive Director
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National Director
-----------------------------------------
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Senior Executive Director
-----------------------------------------
CAPITAL MARKETS
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Senior Executive Director
-----------------------------------------
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Deben Moza
Senior Executive Director
-----------------------------------------
FACILITIES & ASSET MANAGEMENT
SERVICES
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Senior Executive Director
-----------------------------------------
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Gulam Zia
Senior Executive Director
gulam.zia@in.knightfrank.com
Rajeev Vijay
Executive Director - Advisory
rajeev.[email protected]
Saurabh Mehrotra
Executive Director - Advisory
-----------------------------------------
RESEARCH
Vivek Rathi
National Director
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Research
Vivek Rathi - National Director - Research
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Corporate - Marketing & Public Relations
Piyali Dasgupta - Director
Corporate - Marketing & Public Relations
piyali.[email protected]
