Bangalore Real Estate – A Review Of 2012 And Predictions For 2013

 

Santhosh Kumar

  •  BANGALORE RESIDENTIAL – 2012 HIGHLIGHTS

In terms of residential real estate, the best performing areas in 2012 were Hebbal, Sahakar Nagar and RT Nagar in North Bangalore. These locations saw the highest demand and appreciation for residential property during the year. The improved infrastructure in this region, its proximity to BIAL and overall enhanced connectivity helped North Bangalore to crystallize into a much sought-after residential destination.

Because of the infrastructure initiatives in various stages of construction and planning there, including the proposed high-speed rail link, the Hebbal–Yelahanka expressway, the elevated expressway to BIAL and the advent of the Monorail, North Bangalore was one of the safest and most lucrative residential property investment bets of 2012.

The top emerging destinations in 2012 were Tumkur Road, Vijayanagar and Magadi Road in West Bangalore, with capital value appreciation to the tune of 12-15%. West Bangalore This region saw stable demand because of the developing Metro line, which will provide enhanced connectivity.

Yet another area to start edging its way into the limelight was Kanakapura Road, which has begun seeing the benefits of Metro connectivity, the establishment of the NICE Road (the Bangalore–Mysore Infrastructure corridor), the availability of Cauvery water and its affordable price points.

Mysore Road witnessed moderate activity because of its pronounced infrastructure deficit and low-grade demand. This area remained a stagnant residential property market in 2012.

  • BANGALORE COMMERCIAL – 2012 HIGHLIGHTS

The best-performing areas for commercial real estate in 2012 were Outer Ring Road (specifically the KR Puram–Marathahalli–Sarjapur Road stretch) and Whitefield.

Bannerghatta Road, Koramangala and the Central Business District remained largely neutral throughout the year. The low leasing activity in these areas was due to lack of fresh supply of commercial projects and the fact that as established locations, they have limited scope for infrastructure enhancement. Also, companies relocating to alternate areas showed a market preference for destinations with economic rentals.

Outer Ring Road, being a predominant IT growth corridor, benefited from the controlled nature of office space supply, which ensured low vacancy levels, healthy absorption rate and rental appreciation. Also, corporates continued to prefer ORR for its accessibility to employee residential catchments and its connectivity to the various SEZ s and IT parks along this stretch. Moreover, pre-commitments are very prevalent on ORR owing due to the lack of ready to move in supply. ORR continued to be the location of choice for new entrants as well as existing occupiers looking at expansion.

Whitefield reaped a lot of spill-over demand for commercial properties from ORR, thanks to its healthy inventory of ready- to-occupy Grade A office space supply. The affordable rentals there also worked in its favour.

  • BANGALORE RETAIL – 2012 HIGHLIGHTS

In terms of retail property absorption, Bangalore’s top performer in 2012 was Indiranagar, whose high leasing activity was a direct result of its proximity to established residential catchments. Indiranagar continues to solidify its position as a high-demand destination for high street retail spaces, especially by international brands.

Among the notable emerging retail locations in 2012 were Kamanahalli in North Bangalore, which made a convincing entry as a high street destination, and Rajaji Nagar, where the Brigade Orion mall saw high retail activity during the year.

Whitefield remained a neutral market.

  • 2013 OUTLOOK FOR RESIDENTIAL REAL ESTATE

In 2013, North Bangalore will continue to grow thanks to its massive potential for capital appreciation. On Outer Ring Road, projects under construction on Sarjapur Road will reach the completion stage and will see incremental sales because of the preference for ready-to-occupy projects by end users. This area’s advantageous proximity to the IT growth corridor will also be a contributing factor. This area will thrive on the back of increasing Information technology investments and the Aerospace SEZ being planned by the Government over the coming 3–5 years.

Whitefield will continue to yield considerable residential sales, thanks to its affordable prices, proximity to important workplace centres and the enhanced retail and social infrastructure in this location.

  • 2013 OUTLOOK FOR COMMERCIAL REAL ESTATE

In terms of commercial property absorption, Outer Ring Road will work exceedingly well in 2013. Thanks to its proximity to employee catchments, the enhanced connectivity via signal-free flyovers and availability of SEZ as well as non–SEZ office spaces will ensure that ORR continues to build up its already dense corporate presence in 2013.

Meanwhile, Whitefield will not lose any of its sheen in 2013. The office property market drivers there will continue to be its economic rentals, sufficient Grade A spaces ready for occupation and Whitefield’s on-going evolution as a self-sustained micro market with generous residential and retail developments, backed by good social infrastructure.

In North Bangalore, infrastructure development, the controlled office space supply coming up and this region’s proximity to Bangalore International Airport will provide continuing impetus in 2013. North Bangalore will ramify its status as the Business Continuity location of choice.

  • 2013 OUTLOOK FOR RETAIL REAL ESTATE

In 2013, North and East Bangalore are definitely the areas to watch for retailers, mall developers and retail property investors. The rapidly developing infrastructure and expanding residential catchments in these locations are harbingers of vastly increased retail activity over the mid-to-long term.

ADVICE TO SMALL REAL ESTATE INVESTORS IN 2013

Go for residential projects in which units are priced between Rs. 80 lakh to 1 crore. 3 BHK units are going to be the fastest-moving and appreciating products in 2013. Consider only established locations which have significant Grade A commercial real estate development by Grade A developers.

Santhosh Kumar, CEO – Operation, Jones Lang LaSalle India

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26 Comments

Leave a comment
  1. Shams 17. Dec, 2012 at 1:10 pm #

    So great of you to write this

  2. vinod 27. Dec, 2012 at 9:34 pm #

    How many Indians can afford to buy properties worth 1 crore on top of the current cost of living ???

    • raghu 06. Feb, 2013 at 10:58 am #

      only our politicians with benamy money can afford to buy it.

      • Souvik 15. Jul, 2013 at 7:09 am #

        People hv money now…they can invest

  3. Roque Dcunha 21. Mar, 2013 at 8:24 am #

    Beautiful writeup and eye opener. Thank you, amazingly jotted down. A blessing for die-hard real estate investors

  4. Ankit Verma 28. Mar, 2013 at 11:41 am #

    I am very Impressed by your blog content,It is always very Informative

  5. Raghu 03. May, 2013 at 6:29 pm #

    Very informative, however thwere r harddly any projects in the 80lakhs to 1 cr price range offered by A grade builders. I am looking for investing around 1 cr in a good project that would offer good price appreciation.

    • Arun Chitnis 13. Aug, 2013 at 5:56 am #

      Sir, you can get in touch with Om Ahuja on om.ahuja@ap.jll.com. He will guide you to the best options within your budget

  6. Bharath Srivastava 17. May, 2013 at 4:12 pm #

    Good analysis. Good point on the outer ring road. The peripheral Ring Road (PRR) will have a lot of impact on real estate prices in Bangalore

  7. Bettypaul 20. Jun, 2013 at 11:39 am #

    Good information. Please share more info. Thanks.

  8. Prasant 30. Jun, 2013 at 6:12 am #

    Hello Sir, presented article is really matching the current market scenario.Thanks for your effort. Requesting you to give some valuable inputs for the south Bangalore real estate developments and the investment benefits.
    Hope you will consider it.
    Thank You.

  9. Vikram Lhith 01. Jul, 2013 at 3:09 am #

    Sir, in another 5 years IT industry will remove people who are being paid 10-15 lakh rupees per annum and replace them with freshers who will earn 2-3 lakh rupees….The IT industry has reached its saturation level… It is the main income provider for people who buy 60-80 lakh ruppees flats or houses..After they lose their jobs, they will sell their houses for 20-30 lakh rupees.. Hence, the HONEYMOON will be OVER in another 5 years.. Thank You..:-)

  10. RS Amblee 03. Jul, 2013 at 7:14 pm #

    The content is excellant. After buying a commercial property like office space, can you please let me know how to find MNC’s to rente their office facility? Should we approach them by ourselves or are there any real-estate management companies that can do this work. If there are please suggest some.

  11. Sunil 04. Jul, 2013 at 11:10 am #

    Hi,

    Please need some help in understanding few terms in Land.
    We have purchased a piece of Land near Dasarahalli, KR Puram hobli of B Katha. We have verified the documents with one of the best lawyer. After a month, when I just visited the site. On the wall some one has writted some OS/(CaseNo). Ours is the only empty site in that street and almost on all the house walls they have written some number with OS/(Case No).

    Can any one please explain what is that. When we inquire with the neighbors they said no need to worry … its nothing.

    Thanks,
    Regards

    • Mayank Saksena - Head - JLL Land Services 20. Aug, 2013 at 2:26 am #

      You should approach the local municipal corporation office, provide them with your property details and inquire whether any litigation / counter-claim has been filed against your plot. It is best not to take such matters lightly

  12. Shashidhar 07. Jul, 2013 at 6:24 pm #

    You have given a clear picture of the market trends. Very informative and very true.
    Thank you

  13. Vivek agnihotri 01. Aug, 2013 at 8:08 am #

    Excellentar article. Put me on mailing list.

  14. Prabhu 13. Aug, 2013 at 12:14 pm #

    The blog is good but how many would be able to invest or buy a home in Bangalore….

  15. Property Reviews 15. Aug, 2013 at 11:54 am #

    This article is excellent and useful in practical life for people those who have aspirations to buy home in Bangalore.

  16. jayadev 19. Aug, 2013 at 2:36 pm #

    Hi,

    I have taken site near magadi road tavrekere @ 11lac 1400sq ft….need ur advice will this give site give better ROI…

    • KS Girish, JLL Strategic Consulting, Bangalore 20. Aug, 2013 at 2:22 am #

      Dear Jayadev,

      In Bangalore, under residential plotted developments, Return on Investment (ROI) largely depends upon two parameters, viz. a) status of the plot in terms of DC converted & part of BMRDA approved layouts and b) plot should have ‘A’ khata under BBMP Register. If a plot complies with both, the prevailing prices are in the range of Rs. 900-1,000 per sq. ft.

      In case, your plot complies to both a) and b) above, Rs. 800 per sq. ft. is undoubtedly a good deal and you may target 18-20% annualized returns over next 4-5 years. If your does not comply to both a) and b) above, the marketability will be a challenge and thus will negatively impact your ROI significantly. If your plot complies with a) and yet to get appropriate khata from BBMP, the purchase price should have been in the range of Rs. 600-650 per sq. ft. to get good ROI.

  17. Purushotham 20. Sep, 2013 at 4:24 pm #

    Hello Girish,

    I am planning to invest in plot, which location will be ideal keeping in mind future development which can give good ROI.

    Mid Range budget in my plan.

    Kindly suggest.

    Regards

    P V S

  18. Naveen 05. Feb, 2014 at 9:18 pm #

    Is it good to buy a land in hosur, kempatti village, near to TAAL airport for mostly investment purpose…its enclosed residential layout with water and electricity..400/sq.ft

  19. kiran 16. Apr, 2014 at 3:37 pm #

    But, during 2013-2017 Old madras stretch, Hoskote are going to be good appreciating rates. As there is no much residential zone in Hoskote, is also a selling point regarding land value increase..

  20. gowtham 16. Apr, 2014 at 5:16 pm #

    I am planning to invest in plot, which location will be ideal keeping in mind future development which can give good ROI for residential plots in Bangalore?

  21. gowtham 16. Apr, 2014 at 5:18 pm #

    This article is excellent and useful in practical life for people those who have aspirations to buy home in Bangalore

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