There is this huge appetite among investors for real estate and Bangalore scores high on the priority list. Asia’s fastest growing technopolis and the world’s fourth largest technology cluster, the city is home to over 650 MNCs and more than 75 Global Fortune 500 companies. Riding high on the IT boom and emerging businesses, Bangalore has developed as a prime international destination. As a result, all the major parts of the city are growing at a stupendous rate, especially south Bangalore, which is buzzing with construction activities across all residential, commercial and retail fronts.
It has everything going for it - a good deal of infrastructure projects like the widening of Hosur road, the elevated expressway, the BMIC peripheral road, flyovers and more commercial establishments. Several projects along Kanakapura Road
South Bangalore is swankier, more organised and attractive than ever before. Explains JC Sharma, Managing Director, Sobha Developers Ltd, “Real estate in south Bangalore has emerged as the latest hotspot, riding high with various builders announcing projects in and around the area. It is looked upon as the newly found development hub of the city. With a new expressway from Silk Board Junction to Electronic City, the Tumkur Road, Metro to Kanakapura and the area flanked by the city's popular Forum Mall on one side and Electronic City on the other, it is indeed turning out to be a real estate market hotspot. Growth rate of 30 pc
Substantiating this growth and demand, a recent report by retail estate research firm Cushman & Wakefield, Bangalore states that Bangalore is the most sought after real estate destination for commercial and industrial sectors. Moreover, it points out that Bangalore’s realty market is anticipated to grow at the rate of 30 per cent annually in the next ten years, adding to that, foreign investment worth $30 billion. Further reinforcing south Bangalore’s growing popularity and sound future was a research conducted by real estate portal makaan.com, recently.
The study picked localities across the city in order to identity price drivers in the market and found that property prices in BTM layout went up from Rs 3799 psf (January ‘09 – September ‘09) to Rs 6005 psf in (January ‘10 – September ‘10), a whopping 58.5 per cent increase. Other areas in south Bangalore such as Sarjapur Road, Electronic city and Hosur Road featured in the top ten list, which saw price appreciation of anywhere between 50 to 15 per cent.
Reason enough why a plethora of property developers are fighting for a share of this real estate market pie and are offering housing, primarily in the affordable and mid-segment market where an apartment can cost anywhere Rs 50 to 75 lakh.
There are the occasional super luxury apartments and villas too with a price tag of Rs one crore and above.
Areas in south Bangalore which are witnessing the establishment of new projects are BTM Layout, JP Nagar and Bannerghatta Road, Sarjapur and Outer Ring Road and Koramangala. The Hosur-Adugodi stretch is seeing a spurt of retail outlets, which has also propelled builders to come up with more projects in south Bangalore. Hospitals, malls drive growth
Says Chairman and Managing Director of SNN Builders Pvt Ltd Sanjay Shah, “Availability of the best hospitals and popular malls in the retail segment is a major reason for demand in this part of Bangalore. Moreover, the returns on investment of properties are better in South Bangalore as some of the locations are more sought after by the investors and end-users. At this point in time, there is a hyped demand for properties in North after BIA was relocated at Devanahalli.” He adds further, “However, buyers have certain reservations and prefer South as the infrastructure is already developing. In fact, it is becoming better with further development of roads and better connectivity to North Bangalore through the Namma Metro.
Demand for properties in South will continue to be robust. The city’s residential supply will be catered by well-planned residential pockets like Bannerghatta Road, Begur Main Road, Jigani and Anekal.” K Vijay Prasad Reddy, VP (Operations) of Reddy Builders reveals that the company is planning to invest Rs 1,000 crore in the next five years in South Bangalore alone. This includes five of their projects which are already under-construction and four more which are still in the planning stage.
He says, “The scope of development is huge, especially in areas like JP Nagar and Bannerghatta Road. We are offering a spate of affordable housing projects and foresee consumers lapping them up.” Adds JC Sharma, “We have launched two new projects, offering 3 and 4bhk apartments in JP Nagar and Banashankari Extension. The price range is between Rs 74 lakh and 1.03 crore.”
Valmark Group too has six to seven projects in the pipeline to offer. Builders share the view that end consumers are more than willing to invest in apartments here and the response for many of their projects has been phenomenal and there are no signs of any saturation or the demand dying down when you compare the market with north Bangalore for instance. According to Sanjay Shah, “In the recent past we have realised that NRI, who have made Bangalore their home, prefer to settle in south Bangalore due to the cosmopolitan crowd in this part of the city. Also, with signs of recession slowly but surely waning away, companies are on a hiring spree, more and more people are eyeing to settle down here.”
South Bangalore’s future definitely seems to be vibrant, feel property developers from the city. With more projects coming up, malls and retail outlets mushrooming and the already developed infrastructure being a boon, especially when north Bangalore is yet to have a sound infrastructure system, this where Bangaloreans want to be. ‘GREATER CONNECTIVITY, MORE INFRASTRUCTURE’
The Bangalore South residential area includes Koramangala, Hosur Road, Bannerghatta Road, Sarjapur Road, Outer Ring Road, HSR Layout, Jayanagar, JP Nagar, Banashankari and Kanakapura Road. This zone represents locations which are the most preferred.
The availability of land, strong infrastructure development and presence of the middle-income segment have contributed to the development of this zone. In anticipation of the Knowledge City and BMIC project, prominent developers have positioned their projects along the Kanakapura Road. An estimated residential development of 28 mn sq ft or 14,600 units by 2011 make this micro-market the largest contributor to the city’s housing supply.
The elevated highway project between Silk Board intersection and Attibele will enhance the connectivity of Electronic City and surrounding locations on Hosur Road with the city. This will improve the potential of residential localities around Electronic City. Another important project that is expected to benefit this micro-market is the Bangalore Mysore Infrastructure Corridor (BMIC). Expected to be ready by 2011, this project will increase the micro-market’s accessibility to the western zone of the city. Expected to be completed by 2012, the development of the first phase of the awaited Bangalore Development Authority-Peripheral Ring Road (BDA-PRR) will work in favour of the residential development in this micro-market.
The BDA-PRR will enhance connectivity to the eastern zone. The economic slowdown resulted in a correction of residential capital and rental values in the city. However, the market is witnessing stabilisation now and some prominent residential locations are witnessing an appreciation in capital values. Bangalore South has been witnessing relatively strong residential development. The capital values range from Rs 5,500-8,000/sq ft in prime locations like Koramangala and vary between Rs 3,000- 5,600/sq ft in residential locations like JP Nagar.
This variation in rates can be attributed to differential development across locations in the south. Capital values in Koramangala declined by almost 25% during the slump. But, the recovery was better in the Koramangala market, where prices increased by 36% post the economic slump.
The residential market of Bangalore has witnessed heightened activity in the past few years. Several infrastructure projects that will have a bearing on the growth of its real estate development have been initiated. The prominent emerging residential markets are located towards the eastern and southern parts of the city.
The stretch extending from Electronic City in the south towards Varthur in the east is expected to be the strongest contributor to residential development over the next two-three years.
This stretch includes prominent locations like Kanakapura Road and Sarjapur Road. Electronic City and locations like Mysore Road have a presence of strong office development, predominantly IT space.
The connectivity of these locations to the city is expected to improve once the elevated highway is completed. The Bangalore Mysore Infrastructure Corridor (BMIC) cuts across this micro-market which would increase its accessibility towards the western parts of the city. The development of the BDA-PRR will increase its connectivity towards the east.
The elevated highway awaiting completion by end of the year, will provide faster connectivity from Electronic city to Silk board intersection and Attibele-Koramangala thereby reducing travel time. This is expected to have an important impact on residential development around Electronic City.
With the expected completion of the first phase of the BDA-PRR in 2012, the north-eastern parts of the city comprising locations from Tumkur Road to Hosur Road would connect Bellary Road, Old Madras Road, Varthur Road and Sarjapur Road.
The BMIC will enhance the residential potential of locations like Bidadi. It would provide better accessibility to the south western micro-markets in Bangalore.
The four-lane expressway is expandable to six-lane, and alternatively the 10-metre median can be used for a metro rail system or a high-speed train network that could connect the entire area of the project. Plans have been incorporated into the project for providing inter-modal stations along the expressway for future use of rail network.