Bengaluru in Karnataka has been the fastest growing city in India over the past few decades. Information Technology has been the major growth driver for the aggressive real estate development in the Garden City. Sanjay Chugh, Head – Residential Services (Bengaluru & Chennai), Jones Lang LaSalle India, looks at some of the promising residential micro-markets in Bengaluru.
Being the third-largest real estate investment hub for high net worth individuals, Bengaluru tops the list in terms of investments from non resident Indians looking at settling down in India in the future. The city attracts a sizeable population due to its cosmopolitan culture. Home to over 10,000 individual dollar millionaires, Bengaluru has a large base of expatriates living and employed in the city. There has been increased demand for high-end residential apartments in the city, particularly in the Central Business District, Secondary Business District, Whitefield, North Bengaluru and Outer Ring Road sub-markets.
Demand for high-end residential projects, of Rs.1.5 crore and above, is expected to be steady over the next 12 months in the city. Bengaluru is one of the most promising markets for villa projects in India. Villa and row house developments are most active in the micro-markets of Whitefield, North Bengaluru, ORR and Sarjapur Road. However, buyers are very selective about these projects when it comes to the amenities, product quality and size of the units.
The mid-segment projects, which are between Rs.75 lakh and Rs.1.5 crore, is mainly driven by individuals working in the IT/ITeS industry. The main driving factors for mid-segment homes are social infrastructure, proximity to workplace, good physical infrastructure and access to medical and educational facilities. With regards to these factors, the micro-markets like Whitefield, ORR IT corridor, Electronic city and a few areas in North Bengaluru will continue to witness considerable demand in 2014.
The affordable housing segment, which is below Rs.50 lakh, will see constant demand on the outskirts of the city, in all directions. Availability of large land parcels at lower prices has encouraged affordable housing projects in these areas. Also, the planned Metro rail and the Peripheral Ring Road have increased demand on the outskirts of Bengaluru.
VBHC Attibele and Patel Neo Town in South Bengaluru, Provident Welworth and Sovereign Lakefront in North Bengaluru, Provident Sunworth and VBHC Kengeri in West Bengaluru are some of the notable affordable housing projects in the city. The demand for budget housing in East Bengaluru is lower when compared to the other micro-markets of the city such as Mysore road, Hosur road, Kanakapura Road, etc.
The Bengaluru real estate market witnessed improved residential real estate absorption in 4Q13 in comparison to 3Q13. Over 30 residential projects were launched across the city in the last quarter of 2013. Major residential launches included Unishire Belvedere Signature, Orchids Lake View, Ajmera Stone Park, Hiranandani Edenhall, Sobha Town Square and Purva Coronation Square. Capital values appreciated marginally across various sub-markets in 4Q13 due to an increase in sales volumes and higher prices at most projects that were nearing completion.
Bengaluru’s residential markets are exhibiting continued steady growth in 1H14. Capital values are forecast to stabilise and rents for residential properties in the city are predicted to record marginal growth. The first half of 2014 will be defined by a moderate number of launches of residential projects, and stable demand. Rents and capital values will remain stable during 1H14 and increase in 2H14.
- Growth in the IT industry
- An increasing number of high net-worth individuals and non-resident Indians (NRIs/expatriates)
- Proposed infrastructure by the government (Peripheral Ring Road, Metro Rail, Signal Free ORR, High-Speed Rail Link, Monorail and Elevated Expressway).
- Proposed SEZ and IT parks in North Bengaluru (ITIR in Devanahalli, Aerospace SEZ, Devanahalli Business Park, Airport City)