Bengaluru's realty market jittery as 2nd airport site awaits confirmation

Bengaluru: After three locations for Bengaluru’s second airport — two on Kanakapura Road and one on Kunigal Road in Nelamangala — were shortlisted earlier this year, real-estate prices in these areas have shot up, though not at the same rate. 

In the past six to eight months, residents and business owners on Kanakapura Road have been witnessing frequent visits from builders and developers. While the neighbourhood has seen more development post the Covid-19 pandemic, the news of the airport has driven more interest, say locals. As a result, land prices have shot up from Rs 2 crore per acre to upwards of Rs 4 crore. 

"A big developer has been coercing me into selling my land, but I'm holding on because if the airport is confirmed, prices will increase further," says a restaurant owner on the main road. 

A prominent real estate developer with properties along Kanakapura Road and in Nelamangala has noticed buyers showing greater interest in the properties on Kanakapura Road. "For some time now, we've noticed the trend of people moving from eastern to southern Bengaluru, and the potential news of the second airport has driven up interest. Almost every client enquiring about the properties on Kanakapura Road has been asking about the airport," a spokesperson said. 

Most new properties in the locality are flying off the shelf, says Nandish S, a southern Bengaluru-based broker. "There’s an upmarket crowd that’s showing an interest in this neighbourhood, specifically Kanakapura Main Road. Hence, quite a few luxury properties, upwards of Rs 5 crore, are being built," he said. Some plots on Kanakapura Main Road cost Rs 12-18 crore per acre, according to property consultants. 

In comparison, Nelemangala and its surrounding areas are currently seeing slower development. Currently, the locality is mostly seeing plotted and industrial developments. Land value in the locality, priced between Rs 1.5 crore and Rs 2 crore per acre until last year, has risen by at least 10-20%. Converted agricultural land currently costs Rs 4.5 crore to Rs 5 crore per acre . Rent prices have seen a 30% rise since last year. 

The airport isn’t the main reason for the real-estate buzz in these localities, but will slowly add to it, says Syed Nusrath Hussain, partner, Insight Realtors and Legal Advisors. "Kanakapura Road is an old corridor, so the comparison with Nelamangala in terms of development doesn’t hold much ground. KWIN City and Foxconn are coming up in this part of Bengaluru, it has been creating quite the buzz, the airport will only add to it," he said. 

The prices will only rise once the location is finalised, says a leading independent property consultant. "The big builders won't start projects based on speculation. Once the second airport’s location is confirmed, the prices in that area are set to rise by 30% within a year. And during the 3-3.5-year period between that and the groundbreaking ceremony, land prices will double,” he said. If the airport comes up near Kanakapura Road, this will benefit micro-markets between southeastern and southwestern Bengaluru, he predicts.