Trends
The city’s residential property scene is driven by various factors. Proximity to the international airport, Metro lines, Outer Ring Road (ORR) and IT belts have been the most evident factors for the spread of residential catchments.
“Bangalore today is ranked by the Urban Land Institute as the 10th most favoured real estate investment destination in Asia Pacific. The city is known for its high growth and better quality of real estate developments as compared to most other Indian cities. Besides IT, there are other industries like auto, leather, apparel which are also contributing towards the commercial real estate growth in the city. Demand in residential real estate in Bangalore has been characterised by high demand for mid-value apartments. The demand for the high-end residential projects is also pretty strong and driven by both end-users and investors. A number of HNIs have invested in more than one home in the city, usually in the suburbs and peripheral areas to take advantage of the strong demand for rental homes as well as the sizeable price appreciation,” says Naveen Nandwani, Director-Bangalore, Cushman and Wakefield.
Residential real estate market
There were some significant new launches from prominent developers. These new projects were across all segments with a mix of apartment and villa developments. Capital values of ready property mostly remained stable during the last year across most micro markets. Substantial availability of new properties or project launches across different price bands and locations were also influential in stabilisation of the prices of ready properties. Sales are likely to gather momentum in the second half of 2012 with the improving market conditions. Persistent demand in the rental market will continue, thereby escalations in the rental values in select micro markets are likely.
Catchment areas
The emerging residential catchments are along the road to the international airport and towards Whitefield. This is owing to the availability of top notch office spaces in this region. Residential catchments always emerge around workplaces.
“Bangalore’s commercial market exhibited resilience in 2011 with comparatively high demand levels at approximately 14.78 million sqft despite the discomfort in the market on account of global uncertainties. Whitefield and Electronic City were the most vibrant submarket, closely followed by the Outer Ring Road. High absorption levels brought the vacancy levels in the city from 16.6 percent in the fourth quarter of 2010 to 12 percent by the fourth quarter of 2011. Marginal scarcity of space will prevail in 2012 though approximately 11 million sqft of new supply is expected to enter the market. In view of the availability of Grade A spaces with larger floor areas in the Whitefield submarket, most of the largesized transactions are expected in this submarket. With the active demand and limited availabilities in high quality supply, rentals are expected to increase”, says Naveen.
According to a Knight Frank report, Bangalore witnessed the launch of approximately 9,700 units during the financial year 2012 which are scheduled to be completed in the next 2-3 years. The report further states that the city has been expanding radially to meet the residential demands of the increasing populace. At present, most of the new residential projects are concentrated towards the northern and the southern parts of the city.
These residential units with ticket sizes ranging between Rs 2.5-7.5 million were altogether responsible for around 70 percent of the total number of units launched during this financial year. At the moment nearly 1.19 lakhs residential units are under various stages of construction in the Bangalore market.
Source: Times Property, The Times of India, Bangalore, Magicbricks.com
