Bangalore Real Estate is on an Extension Mode

In the past few years, Bangalore has emerged as the fastest-growing city of the country. The major cause of real estate development is the development in IT sector. Bangalore is known to have a multi-cultural population with excellent educational institutes, constantly upgrading physical infrastructure and good social infrastructure. Right now, the most promising residential micro-markets are Sarjapur Road, Outer Ring Road (ORR), northern parts of the city and Whitefield.

Luxury Residential: Bangalore is considered to be the third-largest cluster for high net worth individuals (HNIs). The city is known to be home to around 10,000 individual dollar millionaires and has a huge base of emigrants. With this thing in mind, there has been a huge demand for high-end residential apartments in the city.

Mid-Income Housing: This sector sees the drive from the people working in the ITeS and IT industry. The prime driving factors for this section are proximity to workplaces, social infrastructure, access to medical and educational facilities and good physical infrastructure.

Affordable Housing: This sector sees extremely price sensitive buyers. The places which have seen a high demand for this section are Hosur Road, Mysore Road, Kanakapura Road etc.

There has been seen an increased demand and housing projects have seen an increase in capital values. They are currently priced higher than or similar to mid-income projects.

Overall Demand Scenario: The city’s market has seen an absorption of 6,519 units in the 2nd quarter of FY’13. This was as against 6,689 units in the previous quarter.

Supply: All in all, 21 residential projects were launched around Bangalore in the second quarter. This offered 9,889 units against 10,009 units in the previous quarter.

CBD & SBD: This section is seeing a high demand and low supply. Owing to availability of high capital values large land parcels, these micro-markets have seen a constrained supply of residential developments. These markets are considered to have good physical and social infrastructure.

Highest Proportions of Company Relocations are in Bangalore

It is noticed that the relocation and consolidation of companies to sub-urban locations is on the rise. In the first half (H1) of 2013, the complete relocations across the top eight cities was at 5.6 million sq. ft. This was 2.5 times higher than the period of last year. It is also one-third of the total leasing movement, according to a renowned real estate consultant.

According to an official from a renowned executive director, the markets have witnessed a large number of corporates relocating and consolidating their operations inside a city to places that have quality construction with scalability options which were available at rentals as lower as 15 to 30 per cent. The top eight cities have seen relocations from IT/ITeS to peripheral locations.

It is noticed that during H1 2013, when compared to the same period previous year, Bangalore had recorded the highest percentage of relocations with slight increase of more than three times. There were many companies which relocated from CBD/ off-CBD locations like Millers Road, MG Road, Residency Road to Vittal Mallaya Road to peripheral regions such as the Outer Ring Road.

The situation was more or less similar in National Capital Region. Herein, office occupiers chose to relocate from prime locations in Delhi to Gurgaon with the rental differentials in the range of 20-30 per cent. This translated to cost advantage to occupiers. In Hyderabad, relocations were spotted from CBD/off-CBD locations like Banjara Hills Road, Somajiguda, Begumpet etc. This related to the non-availability of Grade A space to suburban places Gachibowli and Madhapur with much low rentals by approximately 10-11 per cent.

If we were to come to the city of Mumbai, there too relocations had increased substantially in the first half of 2013 when compared to the same period during 2012. The companies relocated from CBD locations to locations such as BKC and Andheri East at rentals lower by approximately 55-65 per cent.

Chennai too witnessed a rise in relocations in H 1 2013 as compared to the same period last year. The relocations provided quality spaces with more opportunities for scalability at rentals lower by around 20-30 per cent than prime places within the city.

The relocations scenario was more or less similar to other cities such as Pune, Kolkata and Ahmedabad. However, Ahmedabad recorded a low rate in relocations during the first half of 2013. This was due to the fact that the preference was mostly given to buy office space instead of leasing within the city by end users.

New Improvement in Banglores Infra

The budget is focusing on strong infrastructure for Bangalore City. The government has done a study for suburban rails which is connecting Bangalore to Tumkur, Ramanagara etc. The cost of the project is expected up to 8759 crore. A special purpose vehicle from Bangalore sub urban rail corporation has been implemented for the project.

The development of the arterial and sub arterial of 100km roads are costing Rs 300 crore and Rs 500 crore for the construction of the grade separators at important place and near to K.R Puram Bridge. Stretching of two important corridors like Bannerghatta Road and Sarjapur Road has revised the plan of 2015 and it costs of Rs 300 crore.  And also the construction of elevated roads from Jayadeva Hospital to Central Silk Board with the integration with the phase II metro and the cost is Rs 150 crore. For the safety of the pedestrians crossing the roads by constructing a pedestrian sky walls cost Rs 100 crore and Rs 250 crore will be provided to the basic infrastructure providing a newly added 110 villages in BBMP.

For the construction of multilevel car parking an amount of Rs 100crore will be provided. For the projects of JnNURM grants Rs 320 crore is provided. In Bangalore disposing of solid waste has become a major problem, for this government is supporting BBMP by providing Rs 100 crore to adopt modern technologies in solid waste management like preparation of compost and generation of electricity. Government is going to introduce a new parking policy in all city corporations.

For the construction of Railway over Bridge and Railway under Bridge at railway Rs 200 Crore has been provided for level crossing which is associated with Railway authorities. By October the Metro line from Sampige Road to peenya covering 10.5 km will be active. Rs 26,405 crore is expected shortly for the clearance from Government of India for Namma Metro works. This is of phase II covering 72 kms. BMRCL will undertake the development of Kengeri and Veerasandra Lake in the current year. For the development of 44 lakes by removing the encroachments and to stop the sewage flow into lakes Rs 100 crore will be provided. By the year 2013-2014 it is planned to plant the saplings of 1.60 lakhs trees across Bangalore with the cost of Rs 20 crore through BMRCL.