Cushman & Wakefield Research

MARKETBEAT
RETAIL SNAPSHOT
CHENNAI, INDIA
A Cushman & Wakefield Research Publication

Q2 2012
ECONOMIC INDICATORS
NATIONAL GDP Growth CPI Growth Private Final Expenditure Growth
Sources: IMF & Government of India

ECONOMY
India's GDP growth slumped to a nineyear low, growing at just 5.3% during the first quarter as against the government forecast of 7.6%. Inflation peaked in May, rising to 7.55% (WPI). Also, the fall in rupee to a record low of Rs57.15 against the US dollar has raised import price pressures. A slowdown in the Indian economy, especially against the backdrop of crisis in the European Union led to the Central Bank's decision to cut the repo rate by 50 bps to 8% in April 2012. Meanwhile, Standard & Poor downgraded India's rating from stable to negative in April, followed by Fitch doing the same in June. Considering the current state of the economy, it is expected that the Central Government will bring in some reforms so that the economy regains its stability soon. Stalled and much awaited reforms like FDI in multi-brand retail may come back to the forefront.

2011 6.5% 8.6% 6.5%

2012F 7.5% 8.2% NA

2013F 8.6% 7.0% NA

PRIME RETAIL RENTS ­ JUNE 2012
MAIN STREETS Nungambakkam High Road Khadar Nawaz Khan Road Cathedral Road RK Salai Usman Road ­ South Usman Road ­ North Adyar Main Road Anna Nagar 2nd Avenue Purusavakam High Road Pondy Bazaar Velachery MALLS Chennai - CBD Chennai - Western Chennai - South INR PER SF/MTH 135 205 135 125 130 160 170 100 150 110 INR PER SF/MTH 265 230 200 EURO PER SF/YR 22.5 34.2 22.5 20.9 21.7 26.7 28.4 16.7 25.0 18.4 EURO PER SF/YR 44.2 38.4 33.4 US$ PER SF/YR 28.3 43.0 28.3 26.2 27.3 33.6 35.7 21.0 31.5 23.1 US$ PER SF/YR 55.6 48.3 42.0 Q-O-Q CHANGE 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Q-O-Q CHANGE 0.0% 0.0% 0.0% Y-O-Y CHANGE 8.0% 36.7% 8.0% 8.7% 30.0% 28.0% 36.0% 11.1% 15.4% 10.0% Y-O-Y CHANGE 0.0% 0.0% 0.0%

RENTALS EXHIBIT STABLE TREND
Chennai's main streets continue to face shortage in terms of availability of quality retail space, whilst rentals across main streets remain stable. The limited supply also resulted in streets adjoining major high streets emerging as popular options for retailers. Due to poor business prospects in the city, some premium retailers located in the high-end retail precinct of Khadar Nawaz Khan Road have exited the market recently. During the quarter, premium properties in Anna Nagar were taken up by retailers in the jewellery segment with landlords also favouring them.

MALL VACANCY LEVELS PERSIST
Chennai saw no fresh mall supply during the second quarter of 2012. While a majority of the malls continue to face low vacancy, select malls in the peripheral locations have registered limited leasing activity due to their locational drawbacks. As a result, the overall mall vacancy and rentals for the quarter have remained stable.

Note: Values are quoted on carpet area for ground floor properties of vanilla retailers

SIGNIFICANT LEASING TRANSACTIONS
PROPERTY Express Avenue Standalone Standalone LOCATION Whites Road 3rd Main Road, Anna Nagar TTK Road TENANT Ebony Gautier Vummidi Bangaru Jewellers) Levis SQUARE FEET 10,000 4,200 3,000

OUTLOOK
With no fresh supply anticipated over the next few months and given the current conservative economic scenario, a majority of the malls and high streets are expected to witness stable rentals over the next few months.

SIGNIFICANT PROJECTS UNDER CONSTRUCTION
PROPERTY Market City LOCATION Velachery SQUARE FEET 1,000,000 COMPLETION DATE 4Q12

Paramount Plaza, 5th Floor # 7A/22 Nungambakkam High Road Chennai 600 034 Tel: +91 44 4299 5555 www.cushmanwakefield.com

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ©2012 Cushman & Wakefield, Inc. All rights reserved..