OVERVIEW

Bengaluru The Garden City or the Silicon Valley as its popularly known has shown tremendous strides over the years. The city population has increased at an annual rate of 3.9% over last two decades. If one examines growth of any developed city, real estate capital and rental values are primarily dependent on employment generation and infrastructure development activities. It houses the maximum number of IT, ITeS, Bio-technology and aerospace companies in India, directly impacting the commercial and residential real estate growth in the city. One of the primary demand drivers for residential real estate sector is over 650,000 professionals employed in IT sector of Bengaluru. What is also unique is that this pool also feeds in to the buyer segment of other Tier 1 & 2 cities due to its strong migrant composition. Bengaluru is experiencing a positive flux across sectors, with evident development in both public and private infrastructure especially road and transport. The city comprises of a strong salaried population resulting in the real estate market dynamics to largely act as per consumer demand rather than speculation. The improvement in road network through Outer Ring Road (ORR), Nandi Infrastructure Corridor Enterprises (NICE) Ring Road, Hosur Road, and upcoming Peripheral Ring Road (PRR) has changed the dynamics of the city. Also, the existing and the proposed Metro Rail and other proposed projects like the Monorail and High Speed Rail Link are expected to ease connectivity and reduce travel time.

BANGALORE RESIDENTIAL MARKET STATISTICS: 2013 AND BEYOND

14 Million Bangalore Metropolitan Population by 2021 13% Average annual price appreciation rate in residential sector for the next 3-5 years.

33,988 Residential units absorbed in 2012

4.5% Average annual residential yield rate.

100,000+ Average annual addition in IT/ITES workforce for past 2 years; expected to grow at least at this rate for next 3 years.

1,19,000 Residential units launched in 2013 [Under various stages of construction].

Bengaluru property market has primarily been an end user drive market. End users constitute around 75% share of the market today, one of the prime reasons for the shift is ever increasing job opportunities, leading to an increase in the rate of migration and diverse demography.

75% End User driven Residential Market

15% CAGR for Residential Sector during 2008-2011

Bangalore International Airport

NH 7: To Hyderabad

Proposed Peripheral Ring Road (PRR) NH 4: To Chennai Hebbal

STOCK & ABS ORBTI ON

Yeshwantpur Nearly 119,000 residential units are under various stages of construction in the Bengaluru market. Maximum concentration of residential stock is in South Bengaluru (51%) followed by East (28%) and North (17%). Bengaluru has been a balanced market both in terms of residential supply as well as property pricing. The residential pricing here is a direct function of demand rather than speculation based on investment segment Whitefield
Brookefield Varthur Road

Krishnarajapuram
C V Raman Nagar

CBD
Old Airport Road Koramangala

AECS Layout Indiranagar Marathahalli

The Bengaluru residential market has always provided ample options in ready to move-in as well as underconstruction properties unlike many other cities where the stock is more tilted towards the under construction units or soft launches. In recent times, Hyderabad has also joined Bengaluru in this league

Outer Ring Road (ORR) SH 17: To Mysore

Silk Board Jn.

BTM Layout

HSR Layout Haralur

Sarjapur

Bannerghatta Road

Hosur Road

NICE Ring Road NH 209: To Kanakpura Electronics City

NH 7: To Hosur
Source: Census of India population in Bangalore of 9.6 million is projected assuming CAGR of 4.3% to arrive at a population of 14 million for 2021.

Around 75% share of the residential market today constitutes of end users

P R O J E C T III : S P E C I A L I Z E D A C T I V I T I E S,

I N T E G R A T E D T O W N S H I P @ C H I K K A J A L A, N O R T H

BAN GALO RE

MIC HAEL JACKSON P 2012MR06, III Semester M.Arch Real Estate Development

MIC RO MAR KETS

A residential property is INR 60-90 Lakhs in flourishing areas like Sarjapur, Yelahanka and Whitefield

Bengaluru real estate market grew towards the East and South due to the prospering IT and allied services and micro markets like Sarjapur, BTM Layout, Bannerghatta, Koramangla, Hosur Road developed exponentially over the last decade

On analysing the current prevalent market rates to the property rates consumers are ready to pay; micro markets of Electronic City and Yelahanka are closest to buyers pricing expectations. On the other hand properties in Bannerghatta, Whitefield, Sarjapur Road and Hebbal have a higher market pricing as per buyers expectations. All these micro markets are popular destinations in Bengaluru due their proximity to the IT/ITeS sector and average pricing for mid segment projects is above INR 4500 per Sq.ft

With the new airport at Devanahalli, the suburban areas of the north connecting the city to the airport came to focus and are witnessing rapid real estate and infrastructure development at present. The government has also earmarked projects like Aerotropolis, Devanahalli Business Park, and Global Finance District in North Bengaluru. Hebbal, Devanahalli, Yelahanka and Hennur are the micro markets to look for towards the North

Micro Markets Electronic City and Yelahanka are closest to buyers pricing expectations
Bangalore International Airport

CAPI TAL VALU E S

NH 7: To Hyderabad

A consistent appreciation of 8-10% is seen in property prices annually in last two years. The hot property areas with heightened demand remain the same with ORR topping the list. The demand for residential units is more evident in the mid-end category compared to premium and luxury segment. A buyer in Bengaluru can get a residential property with all basic amenities at a very competitive rate ranging from Rs 60-90 Lakhs in flourishing areas like Sarjapur, Yelahanka and Whitefield. Residential Property Rates for Mid Segment Properties in Major Micro Markets in Bengaluru: MICRO MARKET NORTH Yeshwantpur Hebbal Yelahanka SOUTH Electronic City Bannerghatta EAST Sarjapur Road Whitefield CAPITAL VALUE (INR Per Sq.ft) 4000-5000 5500-6000 3500-4000
SH 17: To Mysore

Proposed Peripheral Ring Road (PRR)

Hebbal Yeshwantpur

NH 4: To Chennai

Krishnarajapuram CBD Old Airport Road Whitefield Indiranagar Marathahalli Brookefield Varthur Road

Koramangala Outer Ring Road (ORR) BTM Layout Bannerghatta Road NICE Ring Road Silk Board Jn. HSR Layout Haralur Hosur Road Sarjapur

3300-3500 4000-4500 4500-5000 4500-5000

NH 209: To Kanakpura

Electronics City

Balanced market both in terms of residential supply as well as property pricing

NH 7: To Hosur

P R O J E C T III : S P E C I A L I Z E D A C T I V I T I E S,

I N T E G R A T E D T O W N S H I P @ C H I K K A J A L A, N O R T H

BAN GALO RE

MIC HAEL JACKSON P 2012MR06, III Semester M.Arch Real Estate Development

2 0 1 3 O UT LO O K F O R R E S I D E N T IAL R EAL E S TAT E

SOURCES

With a high percentage of young professionals there is high demand for 2 BHK units and mid segment properties

In 2013, North Bangalore will continue to grow thanks to its massive potential for capital appreciation. On Outer Ring Road, projects under construction on Sarjapur Road will reach the completion stage and will see incremental sales because of the preference for ready-to-occupy projects by end users. This areas advantageous proximity to the IT growth corridor will also be a contributing factor. This area will thrive on the back of increasing Information technology investments and the Aerospace SEZ being planned by the Government over the coming 35 years. Whitefield will continue to yield considerable residential sales, thanks to its affordable prices, proximity to important workplace centres and the enhanced retail and social infrastructure in this location.
Source: Jones Lang LaSalle Blog

Bangalore Residential, June 2013 (IndiaProperty.com) Bangalore: Residential Market Report (VESTIAN Research Papers) Jones Lang LaSalle Meghraj (JJLM) Bangalore joneslanglasalleblog.com

Taking market price, amenities, unit area into consideration, micro markets like Yelahanka, Sarjapur Road, Whitefield, JP Nagar, Kanakapura and Bannerghatta will be areas in focus during first two quarters of 2013 with projected 10-15% price appreciation Major population of Bengaluru is salaried with high percentage of young professionals creating high demand for the mid segment properties. Thereby demand of 66% for 2BHKs followed by 23% for 3BHKs is well justified

Bengaluru houses the maximum number of IT, ITeS, Bio-technology and aerospace companies in India and it directly impacts the commercial and residential real estate growth in the city. The city has been a balanced market both in terms of residential supply as well as property pricing. The developers in the city follow a cautious strategy for residential property pricing, resulting in a market which is governed by consumer demand rather than speculation. Also, the residential market provides ample options for both ready to move-in as well as under-construction properties.

Bengaluru continues to exhibit positive temperament, owing to developers cautious pricing and steady consumer demand

INDEX
There is a constant increase in the time frame in which consumers intend to make property purchase. The consistent market uncertainties are forcing buyers to follow wait and watch strategy

Key Locations in Various Zones in Bengaluru CENTRAL MG Road, Frazer Town, Kasturba Road, Vittal Mallya Road, Lavelle Road, Richmond Road, Langford Town EAST Whitefield, Marathahalli Old Airport Krishnarajapuram, Sarjapur Road

Road,

Old

Madras

Road,
ACRONYMS

WEST Malleswaram, Rajajinagar, Tumkur Road, Vijayanagar, Yeshwanthpur NORTH Banaswadi, Hebbal, Hennur, Bellary Road, Yelahanka, Jakkur, HBR Layout, Doddabalapur, Devanahalli SOUTH Koramangala, Electronic City, HSR Layout, Jayanagar, JP Nagar, Bannerghatta, Kanakapura Road

The strong middle class salaried population, directly impacts the real estate market in Bengaluru

ORR Outer Ring Road PRR Peripheral Ring Road NICE Nandi Infrastructure Corridor Enterprises INR Indian National Rupees IT Information Technology ITeS Information Technology Enabled Services CBD Central Business District BIA Bangalore International Airport Q1 Quarter 1 (January March) Q2 Quarter 2 (April June) Q3 Quarter 3 (July September) Q4 Quarter 4 (October December)

P R O J E C T III : S P E C I A L I Z E D A C T I V I T I E S,

I N T E G R A T E D T O W N S H I P @ C H I K K A J A L A, N O R T H

BAN GALO RE

MIC HAEL JACKSON P 2012MR06, III Semester M.Arch Real Estate Development