Property Prices Get Boost by Bangalore Metro

The residents of Bangalore who are tired of the unending traffic, can now find some respite as now they have various options to choose from. The good thing is that the advantages of a sound transportation may not show up immediately. However, the real estate prices which have seen a jump recently, may rise still further.

It is believed that the reach of the Rs. 11,609 crore – which was the revised cost mega project from M.G, Road in city to Baiyappanahalli in the eastern suburb covers 6.7 kms on elevated tracks with four stations in between.

According to the industry experts, the property prices within a two km radius around the metro have shot up from Rs. 3000 a sq. ft. to around Rs. 7,000 a sq. ft. now. Many of the real estate companies are concentrating on getting their projects on time along the metro route. A renowned realtor has around five projects in the area around Metro amongst which the three are close to the first phase of the metro. Another renowned realtor has three projects near the second phase of the metro.

According to the President of the Bangalore Realtors Association of India, it is expected that the CBD areas retail market might shoot up as common people can reach malls without facing any traffic woes and go back home easily. This trend is being welcomed in the business. However, the real estate in the CBD has shot up already.

Moreover, the Floor Area Ratio was raised from an average of 3.25 to 4. This means, the existing constructions within 150-200 metres from metro stations, could raise their number of floors. It is believed that once the rail line opens, developers are eager to expect a turnaround with business getting impacted during the metro construction work.

The project is expected to have 25 percent (Rs.2,040 crore) as subordinate debt and 45 percent senior term debt from Japan International Cooperation Agency (JICA). This is being built on public-private partnership model, what with the state and central governments holding 15 percent equity each (Rs.1,224 crore).

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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.

Industry’s Biggest Issue Is To Get Land In Karnataka

One of the big industrialist says that after a number of visits to the area over two-three years  he has now got the consent from farmers to acquire a land about 150 acres to establish a thermal power plant in north Karnataka. He says that he has reduced the size of his project because is not able to get the land which he needed. He says that still he requires at least 60acres which is agreed by the government. Industrialist says that he is running for that from many years but not any notification is issued for the land acquisition. Today Karnataka is a hospitality state for medium and large industry.

Few companies are still struggling from many years to get land in Bangalore. Acquisition of land in Karnataka for medium and large scale industries is one of the most expensive, time-consuming and frustrating process says one of the directors of the company. Acquisition of land for industrial projects in Karnataka has become a challenging task. And it is also stated that the single window-clearance facility to go long way to make it as effective.

Industry Analysts says that most of the allotment is made to small scale industries which need 5 to 10 acres. Here also there’s a big problem where allotments made to people whose main intention is to later sell the lands for higher rates. An entrepreneur says that due to the involvement of the politicians getting into this and raising the price of the land has made the farmers to expect unreasonable price for land. One of the Associations tried to settle with the politician’s but the company did not accept it because the demand was so high. Industrialists say the government has to at least find a way to make these approvals time bound.

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.

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