Indian construction market is expected to more than double to USD649.5 billion by 2020 from USD360 billion in 2010

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3 CAGR: 20.1% 25 Fourth largest sector in terms of FDI inflows 4 FY2012 FY2022 FDI in the sector is estimated to grow to USD25 billion in 10 years FDI Inflows (USD billion) Rapid urbanisation bodes well for the sector 600 CAGR: 2.4% Urbanisation (in millions) The number of Indians living in urban areas will increase from the current 377 million to about 600 million by 2031 Indian construction market is expected to be the world s third largest by CAGR: 6.1% Construction Market Indian construction market is expected to more than double to USD649.5 billion by 2020 from USD360 billion in 2010 Source: Ministry of Tourism, Census 2011, Aranca Research

4 Growing demand Attractive opportunities 2020E Market size: USD55.6 billion Demand for residential properties has surged due to increased urbanisation and rising household income Growing economy driving demand for commercial and retail space Growing requirements of space from sectors such as education and healthcare Growth in tourism providing opportunities in the hospitality sector Market size: USD180 billion Increasing Investments FDI in real estate of USD22.67 billion between April 2000 and August 2013 During April 2012 January 2013, the real estate sector accounted for 8.8 per cent of total FDI inflows into India Advantage India Policy support Allocation of USD2.8 billion for rural housing for FY14 budget The government has allowed FDI of up to 100 per cent in development projects for townships and settlements Source: BMI (Business Monitor International), Department of Industrial Policy and Promotion, Aranca Research Notes: FDI - Foreign Direct Investment; 2020E - Estimate for 2020

5 Real estate sector Residential space Commercial space Retail space Fragmented market with few large players Demand of over 3,00,000 units in the seven major cities in Residential space supply of nearly 1.4 billion sq ft is expected to come by 2015 out of the planned supply of 2.1 billion sq ft across 10 major cities Few players with presence across India Of a total supply of 445 million sq ft of office space planned in 10 major cities, around 167 million sq ft would come up during with the demand being 66 million sq ft during the same period FDI in multi- brand retail to boost demand Fragmented market with few national players Of a total planned supply of 67 million sq ft across major cities, around 38 million sq ft would come up during Hospitality space A competitive market with many players Over 121,000 hotel rooms in the country as of 2011 The hotel industry grew 13 per cent during SEZs The government has formally approved 577 SEZs* Majority of the SEZs are in the IT/ ITeS sector Source: Cushman and Wakefield, Knight Frank, CRISIL, Aranca Research Notes: SEZ - Special Economic Zone. IT - Information Technology, ITeS - Information Technology Enabled Services, * - As of March 2013

6 Real estate contributes about 5 per cent to India s GDP Market size of real estate in India (USD billion) The market size of real estate in India is expected to increase at a CAGR of 11.2 per cent during FY The real estate sector is estimated to be worth USD180 billion by 2020 CAGR: 11.2% FY2008 FY2009 FY2010 FY2011 FY 2020E Source: BMI, Aranca Research Notes: CAGR - Compounded Annual Growth Rate, E - Estimates

7 The urban housing shortage is estimated at 18.7 million in 2012 Urban-rural housing shortage (million) 47 The housing shortage in rural India stood at 47.4 million as of 2012 The housing shortage in urban and rural India will be around 21.7 and 19.7 million units respectively in Total rural housing shortage is estimated at 43.7 million during the period Total housing shortage for XII plan period ( ) is estimated to be 48.8 millions E Urban Rural Significant increase in real estate activity in cities like Indore, Raipur, Ahmadabad, Jaipur and other two-tier cities; this has opened new avenues of growth for the sector Source: Ministry of Housing and Urban Poverty Alleviation, RBI, CRISIL, Aranca Research Note: E - Estimates

8 Mumbai NCR Pune Bengaluru Chennai Kolkata Hyderabad Demand projections across top 7 cities ( 000 units) Scenario A localised, fragmented market presents opportunities for consolidation Few large, pan-india players such as DLF and Unitech Key drivers Rapid urbanisation Rise in the number of nuclear families Easy availability of finance Repatriation of NRIs and HNIs Demand analysis of top 7 cities ( 000 units) Notable Notable Trends trends Demand to grow at a CAGR of 19 per cent between 2010 and per cent of this from Tier 1 cities At 3x to 4x, demand-supply gap is highest in the low and mid income segments Increase in real estate projects in two-tier and three-tier cities Source: Cushman & Wakefield, Aranca Research Notes: NRI - Non-resident Indian; HNI - High Net-worth Individual

9 Bengaluru Mumbai NCR Chennai Hyderabad Pune Kolkata Demand projections across top 7 cities (million sq ft) Scenario Few large developers with a pan-india presence dominate the market Operating model has shifted from sales to a leaseand-maintenance Key drivers Rapid growth in services sectors: IT/ITeS, BFSI and Telecom Rising demand from MNCs Demand for office space in Tier 2 cities Demand analysis of top 7 cities (million sq ft) Notable Notable Trends trends Mumbai, NCR and Bengaluru account for 46 per cent of total office space demand in India Demand growth projected to be the highest in Tier 2 cities such as Kolkata and Chennai during Business activity shifting from CBDs to SBDs, Tier 1 to Tier 2 cities Source: Cushman & Wakefield, Aranca Research Notes: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance Services; CBD - Central Business District, SBD - Special Business District, NCR - National Capital Region 10

10 Bengaluru Mumbai NCR Kolkata Pune Hyderabad Chennai Demand projections across top 7 cities (million sq ft) Scenario Currently, retail accounts for a small portion of the Indian real estate market Organised retailers are few, and the organised retail space is mostly developed by residential/office space developers Key drivers Booming consumerism in India Organised retail sector growing per cent annually Entry of MNC retailers Demand analysis of top 7 cities (million sq ft) Notable trends NCR accounts for about 30 per cent of the total mall supply About 53 per cent of demand for total mall space in India expected to come from top seven cities Demand for retail space on high streets is quite high as well Increase in FDI limit for multi-brand retail will lead to significantly higher demand for retail space Source: Cushman & Wakefield, Aranca Research

11 NCR Mumbai Hyderabad Bengaluru Chennai Pune Kolkata Scenario NCR and Mumbai are by far the biggest hospitality markets in India, followed by Bengaluru, Hyderabad and Chennai Besides hotels, the hospitality market comprises serviced apartments and convention centres Demand projections (no of rooms) 43,828 38,789 32,660 35,503 Key drivers A robust domestic tourism industry The increasingly global nature of Indian businesses boosting business travel Tax incentives for hotels and higher FSI Demand analysis of top 7 cities (no of rooms) ,519 10,519 Notable Notable Trends trends Serviced apartments appear particularly attractive within the hospitality space Government initiatives to promote tourism in Tier 2 and Tier 3 cities is generating significant demand for hotels in such cities, especially for budget hotels 4,821 3,945 3,506 2,630 1,315 Source: Knight Frank India, Aranca Research Note: FSI - Floor Space Index

12 Growth in tourism Urbanisation Epidemological changes Growth drivers Growing economy Easier financing Policy support

13 The Indian economy experienced robust growth in the past decade and is expected to be one of the fastest growing economies in the coming years Demand for commercial property is being driven by the country s economic growth India s real GDP growth rate is estimated to be 3.8 per cent in 2013 from per cent in India s real GDP is estimated to be 6.72 per cent in % 10% 8% 6% 4% 2% 0% Real GDP growth rates of major economies F 2014F 2015F 2016F 2017F 2018F China Advanced Economies India Emerging Economies Source: IMF, Aranca Research Note: F - Forecast

14 The increasing urban population is expected to cross 600 million by 2031 Population breakup of India (million) Urbanisation and growing household income is driving demand for residential real estate and growth in the retail sector 1,040 1,210 1, E Urban Population Total Population Source: Indian Census, Knight Frank, Mckinsey estimates, Aranca Research Note: E - Estimate

15 In 2012, 6.6 million foreign tourists have arrived in India Foreign tourists arriving in India (million) Foreign Tourist arrival in India stood at 5.3 million during the period January-October 2013 The number of foreign tourists arriving in India expanded at a CAGR of 5.3 per cent during CAGR: 5.3% * Source: Ministry of Tourism, Aranca Research Note: 2013* - Figures for the period Jan-October 2013

16 India is estimated to have earned about USD17.7 billion from the tourism sector in 2012 Foreign exchange earnings from tourism in India (USD billion) Foreign exchange earnings stood at USD14.6 billion during the period January-October 2013 The growing inflows from tourists is expected to provide a fillip to the hospitality sector CAGR: 10.6% * Foreign Exchange Earnings Source: Ministry of Tourism, Aranca Research Note: 2013* - Figures for the period Jan-October 2013

17 Total FDI in the real estate sector during April 2000 September 2013 stood at around USD22.7 billion FDI in real estate as a per cent of total FDI in India Currently, real estate and construction accounts for over 22 per cent of total FDI, up from less than 4 per cent in % 10.3% 7.1% 7.4% 11.1% 11.0% 6.3% 2.7% 3.0% 0.7% Construction activities Real Estate Source: Dept of Industrial Policy & Promotion, Aranca Research

18 There have been 110 deals in the real estate space between 2001 and the first half of 2011 Major acquisitions in real estate sector in India The biggest disclosed deal was the acquisition of DLF Assets shares by Caraf Builders for USD696 million Target Acquirer Value (USD million) Year Caraf Builders DLF Assets ltd Cowtown Land Dvlp Pvt Ltd Compact Disc Film City Oceanus Real Estate Lodha Group Jeff Morgan Warburg Pincus Indiabulls Properties Pvt Ltd Indiabulls Property Invest Trust Embassy Property Blackstone Source: Cushman & Wakefield, Venture Intelligence, Aranca Research Zenith Capitals Limited India Mansa Developers Private Limited

19 Of the 43 private equity (PE) investments witnessed in the sector during 2012, 35 had an announced value of USD1.14 billion In terms of volume, residential projects accounted for 65 per cent of overall investments in the sector during 2012, while commercial projects accounted for 16 per cent Foreign funds constituted almost 80 per cent of total investments in the sector compared with 50 per cent in 2011 Mumbai continued to remain the hotspot for PE investments, followed by Bengaluru and NCR Top PE deals in Indian real estate sector in 2012 Blackstone Investor APG and Group of investors Government of Singapore Investment Corporation (GIC) Investee Manyata Embassy Business Park Godrej Properties Godrej Properties Investment (USD million) A shift in trend is evident from the fact that the maximum number of PE deals in the year were executed through Special Purpose Vehicles (SPV) as against via both entity and SPV modes in the previous year Another major trend evident in recent times is the increasing focus of private PE players on high-end and luxury projects Morgan Stanley Real Estate Investment Baring Private Equity Partners India Morgan Stanley Supertech 91.4 Bengaluru based RMZ Corp Sheth Developers Private Limited Source: Grant Thornton, Venture Intelligence, Aranca Research

20 The PE investments in real estate stood at USD276 million during January-June 2013 with a total of 13 deals Top PE deals in Indian real estate sector in 2013 Real Estate constituted 9 per cent of the total PE deal value in Q (July-September 2013) Investor Investee Investment (USD million) Blackstone Group, HDFC, Embassy Group Vrindavan Tech Village 367 Blackstone HCC Real Estate Ltd HCC Park 169 Blackstone Panchshil Realty - Eon Free Zone Red Fort Capital Lotus Green Developers IFC Smart Value Homes Ltd 50 Source: Grant Thornton, Venture Intelligence, Aranca Research

21 100 per cent FDI permitted in real estate projects within Special Economic Zone (SEZ) Share of SEZ exports in total exports of India 100 per cent FDI permitted for developing townships within SEZs with residential areas, markets, playgrounds, clubs, recreation centers, etc. Exports from SEZs registered a yoy growth of 30.6 per cent in FY13 and accounted for 29 per cent of total exports during FY 2013 Industry players, including realtors and property analysts, are rooting for the creation of "special residential zones" (SRZs), along the lines of SEZs Minimum land requirement has been brought down from 1000 hectares to 500 hectares for multi-product SEZ and for sector-specific SEZs to 50 hectares 90% 88% 10% 12% 74% 72% 75% 71% 72% 26% 28% 25% 29% 28% FY08 FY09 FY10 FY11 FY12 FY13 FY 14* SEZ % of exports Other % of exports Source: Ministry of Commerce and Industry, Aranca Research Note: FY14* - April 2013 to June 2013 For updated information, please visit

22 Ease in housing finances Additional deduction of up to USD1,841 on interests payable on home loans of up to USD46,032 announced in the Union Budget To liberalise scheme of interest subversion of 1 per cent on home loan by including loans of up to USD31,250 for houses that cost up to USD52,080 Housing for economically weaker sections Allocation of USD1.1 billion for Rural Housing Fund in FY14 budget Allocation of USD0.37 billion for Urban Housing Fund in FY14 budget to bridge the huge shortage of housing in certain urban areas FDI The government has allowed FDI of up to 100 per cent in development projects for townships and settlements FDI of up to 100 per cent is allowed in the hotel and tourism sector through the automatic route For updated information, please visit

23 Largest real estate company with revenues of USD0.72 billion (H1 FY14) Market capitalisation of USD7.32 billion as on 31 March 2013 Building India s largest mall in Gurgaon Focuses on IT Parks and next generation malls Founded by Chaudhary Raghavendra Singh Ventures into grade A office spaces Alliance with Hilton International FY06 USD238 million turnover Net land bank of 348 million sq. feet FY13 USD1.4 billion turnover Developed 3000 acre DLF City in Gurgaon Commenced development of DLF Cyber City, Gurgaon Development of 22 Urban colonies Source: Company website, Aranca Research Note: sq ft - Square Feet

24 Key Facts Started its first project in Mumbai in 1991 Distribution of ongoing projects by area (as of December 2012) National real estate developer with presence across 12 cities Differentiated joint development business model resulted in a debt-equity ratio of less than one The current potential developable area stands at 88.7* million sq ft 18.4% Residential Commercial Ranked as one of India s top 10 builders by Construction World Architect & Builder Awards, 2011 Five new projects with 4.3 mn sq ft of saleable area added to portfolio in FY13 YTD Added 11 projects with 9.7 million sq ft saleable area in the last six quarters 81.6% Source: Company website, Aranca Research Note: * - As on September 30, new project with 1.2 million sq ft of saleable area added in NCR in Q2 FY14 along with additional 37 acres of contiguous land added to Panvel township

25 Total revenues (USD million) Profit before taxes (USD million) CAGR: 36% CAGR: 22% FY09 FY10 FY11 FY12 FY13 FY14* 0 FY09 FY10 FY11 FY12 FY13 FY14* Source: Company Annual Report, Aranca Research Note: FY14* - Data for the period April 2013-September 2013

26 The entry of major private players in the education sector has created vast opportunities for the real estate sector Real estate demand in education sector (seven top cities) The top seven cities i.e. Hyderabad, Bengaluru, Mumbai, Delhi, Pune, Chennai and Kolkata are likely to account for 70 per cent of total demand for real estate in the education sector 2014F 2013F F F Area (million square feet) Source: Cushman and Wakefiled, Aranca Research Note: F - Forecast

27 NCR is expected to have the highest incremental demand from the education sector Incremental demand across seven major cities (million sq ft) The rising young population of India is expected to drive this space Hyderabad Bengaluru 4 NCR Mumbai Pune Kolkata Chennai Source: Cushman and Wakefiled, Aranca Research Note: NCR - National Capital Region

28 Healthcare The healthcare sector is estimated to grow at an annual rate of 15 per cent to USD100 billion by 2015 India is expected to need additional 937,000 beds by 2015 India still needs to add 3 million hospital beds to meet the global average of three for every 1,000 people Senior citizen housing Emergence of nuclear families and growing urbanisation has given rise to several townships that are developed to take care of the elderly A number of senior citizen housing projects have been planned; the segment is expected to grow significantly in future Service apartments Growth in the number of tourists has resulted in demand for service apartments This demand is likely to be on uptrend and presents opportunities for the unorganised sector Source: Fitch Ratings, Aranca Research

29 Foreign tourist arrivals are expected to increase at a CAGR of 11.7 per cent during Forecasts of foreign tourists arriving in India (million) The number of foreign tourists arriving in India by 2015 is anticipated to be over 9.2 million Foreign tourist arrivals during the period January to October 2013 were 5.3 million 6.6 CAGR: 11.7% F 2014F 2015F Source: Ministry of Tourism, BMI, Aranca Research Note: F - Forecast

30 Foreign exchange earnings from tourism is expected to rise at a CAGR of 4.1 per cent during Foreign exchange earned is forecast to cross USD19 billion in 2015 Forecasts of foreign exchange earnings from tourism in India (USD billion) 19.9 Foreign exchange earnings from tourism during the period January to October 2013 were USD14.6 billion CAGR: 4.1% F 2014F 2015F Source: BMI, Aranca Research Note: F stands for Forecasts

31 The number of hotel rooms in India as of 2011 stood at 121,000 50,000 new hotel rooms are expected to be added over the next 4 5 years across India s top six cities The number of hotel beds in the country is expected to increase to 443,000 by 2015 Capacity of hotels in India ( 000) F 2013F 2014F 2015F Number of hotel rooms Number of hotel beds Source: BMI, Cushman & Wakefield, Aranca Research Note: F - Forecast

32 The Southern Indian States Andhra Pradesh, Tamil Nadu and Karnataka have been the major drivers of economic growth in India over the last decade. The three states together account for about 22 per cent of India s GDP Nearly 45 per cent of India s office stock is represented by these states; over 64 per cent of the country s IT SEZs are housed in this region Office stock in the Southern cities is projected* to grow at a CAGR of 8 per cent between 2012 and 2016 Note: * - Projections by Jones Lang LaSalle Office market in Southern India (in million sq ft) 20% 16% 12% 8% 4% 0% E 2014F 2016F Supply Net absorption Vacancy Rate - RHS Source: Jones Lang LaSalle, Aranca Research

33 Net absorption rate in Southern India s residential market is once again climbing up to pre-crisis peaks; during 1Q12, net absorption rate stood at 15.1 per cent, compared to 17.8 per cent in 1Q08 25,000 Residential market in Southern India (number of units) 25% A growing migrant population due to increasing job opportunities, together with healthy infrastructure development, is underpinning demand in the region s residential real estate market 20,000 15,000 10,000 20% 15% 10% 5,000 5% 0 0% 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 New launches Net absorption Absorption rate - RHS Source: Jones Lang LaSalle, Aranca Research

34 The Confederation of Real Estate Developers Associations of India (CREDAI) National Secretariat, 703, Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi Tel: (011) / Fax: Website: Builders' Association of India (BAI) G-1/G-20, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai Tel: , , Fax: Website:

35 BFSI: Banking, Financial Services and Insurance CAGR: Compound Annual Growth Rate CBD: Central Business District FDI: Foreign Direct Investment FSI: Floor Space Index HNI: High Net-worth Individual GOI: Government of India INR: Indian Rupee IT/ITeS: Information Technology/Information Technology enabled Services MNC: Multinational Corporation NRI: Non Resident Indian

36 SBD: Special Business District SEZ: Special Economic Zone USD: US Dollar Wherever applicable, numbers have been rounded off to the nearest whole number

37 Exchange rates (Fiscal year) Exchange rates (Calendar year) Year INR equivalent of one USD Year INR equivalent of one USD (Jan-October 2013) (April-October 2013) Average for the year

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