Tag Archives: Bengaluru real estate

Can Bengaluru’s infrastructure support vast real estate development?

Posted on by Track2Realty

Bottom Line: Faster implementation and collective effort is the key to success in Bengaluru’s infrastructure supporting real estate development, says a Colliers Research. 

Bangalore, Bengaluru, Bangalore real estate, Bangalore property market launches, Infrastructure in Bengaluru, Investment in Bangalore infrastructure, India real estate news, Indian realty news, Real estate news India, Indiaproperty market, NRIs in Bangalore, Track2Realty Bengaluru absorbs about 13-14 million sq ft of commercial office space every year, which is approximately one third of the total space leased in India. As per Colliers Research, the trend is likely to continue in the coming years.

The data analysis reveals that about 26 million sq ft of Grade A office buildings are under various stages of construction in the city which will completed by 2020. Most of this upcoming supply is concentrated in Outer Ring Road (ORR), which is a major commercial hub in Bengaluru.

“As on today, within ORR and Whitefield, the commercial office space stock accounts for approximately 78% of Grade A stock in Bengaluru. With infrastructure projects like the ORR metro line, and planned road improvement projects in and around these areas; the market is likely to remain bullish with respect to overall office space absorption in next 2-3 years, driven by IT-ITeS, followed by Engineering & Manufacturing and BFSI sectors. However, with more office supply coming in these markets, the pressure on infrastructure and support sectors is to increase multi-fold,” says Ritesh Sachdev, Senior Executive Director, Occupier Services, Colliers International India.

Bengaluru being a host to the largest share of technology start-ups (26%) in India, is the testing ground for co-working spaces and has always invited new occupiers, such as Capiot, InnerChef, Knowlarity, Monkey Box, Artifact Design, and many others. Moreover, the residential market is also developing to support the vast commercial development.

The story is good as far as the real estate development of the city is concerned, however, the unwelcome news is that the city’s infrastructure is unable to keep pace with the vast real estate development.

Bengaluru has seen an increase of 47% in population during the last decade (2001-2011) and the vehicle population growth rate is even higher than the population growth rate. The state government has started various initiatives and is going in the right direction to solve the infrastructure issues; Namma Metro being one of the initiatives. Phase 1 of the project connecting Nagasandra to Puttenahalli (Green line i.e North-South) and Mysore Road to Bayapanahalli (Purple line i.e East- West) corridors have been completed. Phase 2A, connecting Mysore Road to Challegatta near Kengeri and Yelachenahalli to Anjanapura is set to be completed by December 2018. This will push the demand in micromarkets such as Mysore Road and Bannerghatta Road.

Further extension of Phase 2 includes stretch between Silk Board and K.R Puram which is set to be completed by 2020. This will further boost demand in ORR accounting for 75% of the total leasing activity in Q3 2017.

Construction of underpass and widening of flyover along ORR at Hebbal Junction will improve commute time within the city’s major employment hubs. The National Highway Authority has also notified land for widening of NH 209 (948) till Kanakapura. With good accessibility to other parts of the city, these micromarkets are expected to improve further.

Although the government has started taking initiatives, the pace of development is slow. In our opinion, the government should also look at making the city sustainable to natural calamities. The time and again flooding of the city, brings the city to its knees. Along with the introduction of new infrastructure projects, the government should also focus on retrofitting the existing infrastructure.

According to Colliers Research following initiatives can be undertaken at three levels: 

One, at the citizen’s level, where they are imparted civic sense to follow the set rules of transportation like following the signals, crossing at footpaths, etc. This will ease the flow of traffic to a certain extent. 

The second initiative should be in identifying and implementing key infrastructure projects at a faster pace to improve the quality of living, to make Bengaluru a world class city. We believe that occupiers, investors along with the developers should make an effort to pressurise the government for the same. 

Bengaluru requires a comprehensive integrated sustainable public transport system like London and Singapore. Widening the road itself might not be the optimum solution for the problem. Efforts by all involved stakeholders, from citizens to governing bodies should work towards achieving a common goal, that is making Bengaluru uphold its name of Silicon Valley. 

Colliers Research says the infrastructure planned along commercial hubs such as ORR is likely to provide impetus to the real estate sector in ORR and nearby micromarkets, such as K.R. Puram and Hebbal. However, development of office assets without timely completion of infrastructure will leave the city in a chaotic state and may impact the office market adversely.

Property market potential of top 5 cities

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: The realty markets of Mumbai, Pune, Chennai, Bengaluru and Hyderabad are proving to be magnets that attract potential home buyers from all over due to their massive infrastructure development, affordable rates and good job catchment opportunities.

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news“Form is temporary but class is permanent,” goes an old adage in cricket. But class being permanent is equally true with the best asset class called property. Since the very nature of the business is cyclic, that goes up and down in its critical linkage to the overall economy; it often leads to lending credence to the prophets of doomsday that the market is down and out.

However, a closer look at some of the leading property markets of the country, like Mumbai, Pune, Chennai, Hyderabad and Bangalore, clearly suggest that the market is poised for an upswing in the next few years. More importantly, it is not just the analysts but also the home-buyers who are today; ready to bet high on the long term growth story of the property market in these leading cities.

City realities

Home-buyers are bullish over the medium-to-long-term growth story of the property market

Cities that are mostly being preferred are Mumbai, Pune, Bangalore, Chennai and Hyderabad

Infrastructure developments and job catchment are the investment magnets in these cities

Mumbai

“I don’t really subscribe to the view that Mumbai is saturated and hence, is facing a slowdown. The same was opined before the emergence of BKC (Bandra Kurla Complex) as well but the new destinations for both, residential and commercial spaces changed this outlook,” says Jessy Kutty, an NRI, who is soon planning to invest in the city’s property market.

After all, the kind of infrastructure upgrading, like the Eastern Freeway and Western Expressway, the metro rail, Jogeshwari – Vikhroli Link Road (JVLR), Andheri Kurla Link Road, etc, have had, they have changed the outlook of the city.

Add to it, the upcoming infrastructure projects like the Mumbai Trans Harbour Link and an international airport in Navi Mumbai, has suddenly given birth to a twin city that is ready for investment. Needless to add, these developments are on the stretches of high business corridors and hence, are all set to fuel the housing demand in the city.

Advantage Mumbai

Mumbai 7th most promising city in the list of target cities in APAC due to growth prospects in commercial office activity-Cushman & Wakefield

Impressive investment along the new growth corridors of upcoming MTHL and Navi Mumbai International Airport

New corridors of development emerging as the government pushes for Rs 46,000-crore expressway to connect Mumbai-Nagpur with Samruddhi Expressway

Pune

The story is no different in the neighbouring city of Pune as well where the Pune Municipal Corporation (PMC) has set up five special funds for urban projects. The PMC has set a target of raising:

INR 55 crore for the Pune Infrastructure Fund;

INR 23 crore for Critical Infrastructure Funds for Information Technology and Enabled Services (ITES);

INR 2 crore for Heritage Conservation Funds;

INR 20 crore for Urban Transport Land Development Charges and;

INR 40 crore for Urban Transport Building Development Charges.

“Pune is no more just a hot destination but the best market for investment today. Even in the wake of a slowdown, the performance of the IT industry in the city has been phenomenal. Even Cushman & Wakefield has placed Pune among the top 10 markets across the Asia Pacific region. For me, this is the market to bet on for a long-term growth story,” says Gaurav Gupta, an IT professional.

Advantage Pune

Pune 8th most promising city in the list of target cities in APAC due to growth prospects in commercial office activity-Cushman & Wakefield

Pune sells India’s first municipal bond since 2007 worth $31 million for 10 years for smart city project and aims to modernize the city

A detailed project report (DPR) for the ring road proposed by the PMRDA will be ready by September and civil work will start by October-November. This eight-lane 128km ring road will connect places on the periphery of Pune and Pimpri Chinchwad

Bengaluru

Bengaluru has always been an aspirational city for the average home-buyers. Now, with the boost of infrastructure projects, like the metro rail and Periheral Ring Road, this job magnet destination appears to be even more desirable.

The influx of global corporate occupiers, infrastructure deployment in the peripheral areas, rapidly improving connectivity and unleashing of large land parcels by the government for commercial and industrial growth, promises the emergence of newer nodes in the peripheral districts of Bengaluru.

Since land in these areas comes at a lower cost; the expat workforce that is employed in the numerous automotive, engineering and other industries located on the outskirts of Bengaluru, would continue to drive the property market.

Ashish Puravankara, managing director of Puravankara Ltd, finds reasons to suggest why Bengaluru is a huge investment magnet. The companies are also realising the cost of doing business here; the average rental cost of office space per sq feet in Bengaluru is about INR 45 and that works well for companies. Then look at the customers’ point of view. The average cost of housing in Bangalore is INR 5,500 and that works well for their workforce too.

“So, it is all supporting each other and it is not that only one factor alone is driving the market. If the prices have become unaffordable due to the high demand in the city, people would have started looking at other cities but Bengaluru continues to drive the major share of investment in the property market,” says Puravankara.

Advantage Bangalore

Bangalore 6th most promising city in the list of target cities in APAC due to growth prospects in commercial office activity-Cushman & Wakefield

A Colliers report suggests Bangalore market maintained its top position across nine cities despite low vacancy and recorded an overwhelming share of 37% of total absorption

Bangalore is the only Indian city that has now scaled up to global level of consumption of office space per household, an impressive 65 sq feet as against the national average of 25 sq feet 

Chennai

Chennai seems to have moved ahead from its flood disaster of 2015. Today, it is the biggest manufacturing hub in India. The city has more industries coming up and it is termed as the Detroit of Asia. Almost every manufacturer has a facility there. It has attracted more investments and has more industrial corridors in almost every nook and corner of the city.

The IT sector here is also booming and growing at a rapid pace. Top Indian IT majors have a considerable chunk of employees operating out of Chennai.

“The best part about Chennai is the price point that hovers in the range of Rs 2500-5500. Premium projects are located in Nungambakkam, Egmore, Anna Nagar, Nandanam, Mandaveli, RA Puram and locations in ECR such as Muttukadu, Uthandi and Injambakkam. Low and mid-segment projects are coming up at Perumbakkam, Ottiyambakkam, Thalambur, Mevalurkuppam, Avadi, Padappai, Mogappair, Thirumazhisai, Navalur, Manapakkam, Padur, Kelambakkam, Thaiyur and Velappanchavadi,” explains Ravikiran Donthamsetty, a local broker.

Advantage Chennai

Chennai 9th most promising city in the list of target cities in APAC due to growth prospects in commercial office activity-Cushman & Wakefield

Vision 2023 of State Government aims to boost infrastructure and industrial growth in the city

Expansion of Chennai airport, laying of Chennai peripheral ring road, widening of East Coast Road, and setting up of Chennai-Bangalore Industrial Corridor promises to alter the investment climate of the city

Hyderabad

Parth Mehta, managing director, Paradigm Realty agrees that markets like Hyderabad have been outperforming their peers in larger metro cities. The city is improving currently with respect to the infrastructure and government policies for doing business.

“Also, due to the IT and e-commerce boom, there would be a lot of start-ups that would prefer to operate from low cost office spaces at these locations,” says Mehta.

Probably, no other city looks as promising as Hyderabad from a medium-to-long-term perspective. The continuous growth of the IT sector in the city has had a cascading effect on the housing market in corresponding hubs as well. The residential activity in north Hyderabad is now driven by the presence of industries such as pharmaceutical, bio-tech, electronics, etc.

“In 2016, Hyderabad witnessed strong office leasing, registering a 109 per cent y-o-y growth during the year. In the January to March 2017 quarter, the city witnessed an uptake of more than 1.3 mn sq ft of office space. This growth in office leasing activity, coupled with robust infrastructure development and competitive pricing, positions Hyderabad as one of the most affordable residential markets for buyers in the region,” says Rami Shetty, a local property agent.

Most of the homebuyers in the city also agree that the metro connectivity and transit hubs will fuel further demand in the housing segment in the near future. Due to the lowest office rentals across top markets in southern India, corporates are increasingly looking at Hyderabad while planning their expansion strategies in the region. With the demand going up for office space, the city is experiencing a demand-supply gap at present and its organic effect on the housing market is a logical conclusion.

Advantage Hyderabad

Hyderabad tops the list of target cities in APAC due to growth prospects in commercial office activity-Cushman & Wakefield

With political stability the city is high on the wish list of corporates due to low cost of doing business

The upcoming metro connectivity & transit hubs fuelling investment climate in the city

In Conclusion

In a slow moving housing market at present, these cities are displaying exemplary resilience to suggest that the medium-to-long-term outlook is pretty bright. The best part is that the home-buyers and other investors are ready to believe the long term growth stories of these cities.