APAC-BFSI-Outlook-2017

MARKET OVERVIEW MUMBAI BANKING AND FINANCIAL SECTOR SUMMARY

45.70

3.0%

25-30%

Rent Growth (YOY in local)

Prime Rent # (USD/Sf/Year)

% Occupancy of Financial Sector

Banking and Financial Sector Trends In a bid to create cost eŸciencies and improved returns, domestic and global firms in the banking and financial sector are eyeing growth opportunities in the Indian market. The Indian market, at present, is characterized by new entrants in the Banking sector (as a result of the Reserve Bank of India’s issuance of new bank licenses), and existing firms expanding their footprint. Global banks are continuing to set up captive centers for back-oŸce and support functions. Indian banks, on the other hand, are consolidating their oŸce space and bringing out cost-eŸciencies through a mixed strategy of purchasing or leasing consolidated oŸce spaces. Non-banking financial companies (NBFCs) continue to be bullish on the commercial real estate sector, focusing on outright purchase of marquee assets in Mumbai. Banks prefer the secondary business districts of Bandra-Kurla Complex and Lower Parel for front-end oŸces, while uptake of larger space for back-end services is seen in other submarkets.

Outlook, Opportunities & Strategies for Occupiers Led by higher business confidence on the back of strong economic growth (India being the fastest-growing large economy), the market is expected to witness high demand for oŸce space for outright purchase and leasing. In Mumbai, Banking, Financial Services, and Insurance (BFSI) companies’ leasing accounted for approximately 14.0% of total leasing over the last 2 years, which is expected to strengthen further. However, availability of quality large space would likely pose as a challenge for occupiers, with transactions expected to remain competitive. The Indian market is witnessing considerable activity in banking and financial services. Going ahead, Foreign Direct Investment (FDI) relaxation in the insurance sector, global banks’ expansion of their captive centers, and the government’s thrust on ease of doing business is likely to fuel higher demand for o…ce space in the sector. - Gautam Saraf, Managing Director

Key Banking and Financial Services Sector Lease Transactions – 2016 PROPERTY SF TENANT

TRANSACTION TYPE SUBMARKET

Om Sagar

81,000 State Bank of India

Expansion

Thane-Belapur Road

One Indiabulls Center

52,000 Capital First

Expansion

Lower Parel

Akcruti SMC

44,000 Kotak Mahindra

New lease

Thane

Indiabulls Finance Center 1

33,000 YES Bank

Expansion

Lower Parel

Key Banking and Financial Services Sector Sale Transactions – 2016 PROPERTY SF BUYER PRICE (US$ MIL)

PRICE (US$/SF)

SUBMARKET

Marathon Futerex

62,000 IDBI Federal

17

280

Lower Parel

The Ruby

200,000 Axis Bank

3,200

242

Dadar

# Weighted average rent, including CBD and BKC

43