Bangalore Property Market Grows - Mumbai and Gurgaon

Among the key residential markets, only Bangalore showed a growth in TTM sales run-rate (7% y/y to 63mn sq ft), compared to the steep decline seen in other large markets: Mumbai (-46% to 19mn sq ft), Gurgaon (-20% to 48mn sq ft) and Chennai (-15% to 34mn sq ft). The reasonable ticket size, strong demand for the right product and a conducive regulatory and execution environment contributed to strong numbers.Bangalore saw sharp growth in launches throughout 2012 (72mn sq ft), keeping inventory high, which ensured pricing in the market remained competitive validating our thesis on a virtuous cycle of demand-driven rather than speculative growth in the Bangalore market.Bangalore witnessed 13% y/y rise in pricing by October 2012.

We believe that Bangalore will remain the best play in India real estate during 2013. This will reflect in the impressive growth across all segments – residential (premium/ mid-income), office, retail and hospitality.

Our analysis of the latest property market data (October 2012) paints a resilient picture of the Bangalore market versus the dismal conditions elsewhere, especially in other key markets such as Gurgaon and Mumbai.