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18.6
25%
75%
5%
95%
Marathahalli
3.3
Silk Board Jn.
28
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Executive Summary
The Outer Ring Road stretch from Hebbal to Silk Board Junction, popularly referred to as ORR, has developed
in the last 10 years as an Information Technology (IT) growth corridor and accounts for almost 25% of
Bangalores total IT space. Currently, global IT clients such as IBM, Accenture, Cisco, Philips, Intel, Honeywell
and others operate in this micro market.
ORR scores over other IT growth corridors of Bangalore in terms of proximity to Central Business District
(CBD), availability of large land parcels, proximity to citys talent pool and favourable development
regulations. Ongoing infrastructure works aimed to transform the ORR into a signal free corridor and the
upcoming hotel and retail projects will further enhance connectivity and support infrastructure in this micro
market.
ORRs IT growth corridor story commenced in early 2000s with land acquisition and allotment efforts by
Karnataka Industrial Areas Development Board (KIADB) to promote IT developments. Further, single window
clearance system adopted by Karnataka Udyog Mitra (KUM) supported the KIADBs initiative. Prior to
commencement of Bagmane World Technology Center & Ferns Icon in 2008, developmental activity was
largely concentrated between Marthahalli Sarjapur stretch primarily due to favourable zoning regulations
and availability of large land parcels. Currently, the Marthahalli Sarjapur and Hebbal KR Puram stretches
account respectively for 57% & 36% of the total Grade A office space operational along the ORR. In future,
KR Puram - Marthahalli stretch is likely to witness almost 17% of the total IT space being developed in this
micro market.
ORR predominantly has large multi-tenanted IT parks with almost 95% of the total Grade A office space
being occupied by IT and ITeS companies and the proportionate share between IT and ITeS segments is 57%
and 42% respectively. As on date ORR has over 18 million sqft of operational IT space and approximately
another 3.3 million sqft under construction. The planned supply along this micro-market is estimated to be
28 million sqft. ORR constitutes for 75% of the Special Economic Zone developmental activity in the city and
this trend is expected to continue as this micro market has over 300 acres of land available for development
under SEZ category.
Current levels of vacancy of Grade A office space along ORR is just over 1 million sqft and likely to drop in H2
2010. Even during the global meltdown phase (Q4 2008 2009) average rentals for Grade A office space in
ORR relatively witnessed a lesser drop compared to other peripheral markets Whitefield and Electronics
City signifying the balance between supply and demand levels.
While ORR continues to remain an attractive IT growth corridor rental levels in short term are expected to
rise owing to very low existing vacancy levels and limited projects under construction. However in medium
to long term the prices will stabilize owing to planned supply.
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Hebbal
Yeshwantpur
To BIA
NH 7
NH 4
ITPL
KR Puram
Magadi
Road
Whitefield
CV Raman Nagar
CBD
Indiranagar
Marathahalli
Koramangla
Kengeri
SH 17
BTM Layout
NH 209
Bannerghatta
ORR (Hebbal to Silk Board Junction)
Major State and National Highways
NH 7
Electronics
City
ORRs IT growth corridor story commenced in early 2000s with land acquisition and allotment efforts by
Karnataka Industrial Areas Development Board (KIADB) to promote IT developments. To facilitate prompt
developments, KIADB acquired large land parcels along ORR and ensured conversion of the same for
industrial hi-tech use. Further, single window clearance system adopted by Karnataka Udyog Mitra (KUM)
supported KIADBs initiative. With the completion of Outer Ring Road (ORR) in 2002, a new growth corridor
opened up for IT development in Bangalore.
The announcement of Special Economic Zone (SEZ) policy in 2005, led to the export oriented IT/ITeS sector
to focus their growth in upcoming SEZ parks due to expiry of the incentive structure under the Software
Technology Parks of India (STPI) scheme. Readily available large land parcels along ORR and Government
initiative of the revised Bangalore Master Plan 2007-15 provided impetus to IT development through
favorable zoning regulations.
With the commencement of Bangalore International Airport (BIA) in 2008 in Devanahalli, the ORR stretch:
Hebbal to Silk Board Jn. gained importance as it serves as the main artery between BIAL and major IT hubs
of Bangalore i.e. Whitefield & Electronics City.
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Policy Level
Initiatives
Key
Connectivity
Intiatives
Formation of
Electronics City
1978
1990
1991
IT
Infrastructure
Formulation of
STPI Scheme
Formation of EPIP
Zone in Whitefield
1994
Commencement of
construction works
for ORR
1995
1996
WIPRO
1999
Intel Technologies
2005
2006
Annoucement
of SEZ Act
2007
Salarpuria Softzone
Vrindavan Tech Village
Cessna Business Park
Release of
Bangalore
Master Plan
2008
Salarpuria Touchstone
Adarsh Tech Park (P-I)
Ferns Icon
2009
Commission of
ITPB
(JV between KIADB
& Ascendas)
1998
1999
Announcement
of BIA
2000
2002
Completion of ORR
2005
2007
2008
Commissioning
of BIA
2010
Announcement of SEZ Act in 2005, favorable zonal regulations triggered growth along ORR
Presence of IT working population dominant residential zones in eastern and southern regions of
Bangalore due to development of IT hubs- Electronics City and Whitefield supported the growth of
IT developments along ORR
Post commissioning of BIA in 2008, the ORR stretch- Hebbal to Silk
Board Junction has gained importance as it acts as the main connection
between BIA and major IT hubs
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Advantage ORR
The following characteristics of ORR stretch
between Hebbal and Silk Board Jn. makes it one of
the most attractive IT growth corridors of
Bangalore:
** Mutation Corridor: The subject stretch of ORR as been designated as Mutation Corridor under Revised Bangalore Master Plan,
2007. As per this provision, plots with frontage equal to or more than 12m are eligible for conversion of land-use to commercial
and the permissible FSI being in the range of 2.75 to 3.25 (depending on the plot size, frontage and abutting road width). In addition
to the frontage, the entry and exit to the plot should be provided along the mutation corridor.
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The following table summarizes the potential of these stretches for IT developments:
Table 1: ORR-Potential for IT Developments
Stretch 2: KR Puram to
Marathalli
Stretch 3: Marathalli to
Sarjapur
CBD (km)
9.5
13.5
15
11
32
42
47
52
Limited
Available
Available
Limited
Attribute
Distance Chart
Land Availability
Availability of land for IT
development
Zoning and Reulatory Attributes
Main Land-use
Residential;
Industrial (Hi-Tech Zone)
Residential
Permissible FSI
~25%
~40%
~25%
~15%
None
Marriott
None
None
None
Moderate
Moderate
High
Low
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To BIA
Bellary Road
Nagwara
Hotel Westin
Hebbal
BEL
Hennur
Sanjay Nagar
Hebbal
HBR Layout
Hormavu
To Hosakote
RT Nagar
Banaswadi
Ramamurthy Nagar
OMBR Layout
Kasturi Nagar
Frazer Town
KR Puram
To Whitef ield
HP
Mahadevpura
CV Raman Nagar
DRDO
Kaggadaspura
CBD
Kartik Nagar
Soul Space
Arena
BEML
AECS Layout
Indiranagar
NAL
ISRO
HAL
Marathahalli
BEML Layout
To Whitef ield
Yemalur
Marathahalli
Old Airport
Park Plaza
NAL
Novotel IBIS
6
7
Legend
STPI Parks
Koramangala
Marriott
BTM Layout
Bellandur
SEZ Parks
Soul Space
Spirit
11
Hosur Road
Legend
To Electronics City
Under-construction
SEZ Parks
SEZ
Parks
17
18
Salarpuria
Merill Lynch
8
Palm Retreat
Existing
Serviced
Apartments
WIPRO
Upcoming
Hotels/
Serviced Apartments
Existing
Malls
/ Hyper-markets
Haralur Road
To Sarjapur
PSUs R & D
Organizations
Upcoming
Malls
STPI Parks
BTS /facilities
Existing
Malls
Hyper-markets
SEZ
STPI /Parks
Upcoming
Under-passes
Existing
Hotels/
Serviced Apartments
SEZ Parks
Residential
Locations
Upcoming
Malls
Under-construction
STPI Parks
Upcoming Hotels/
FlyoversServiced Apartments
Potential
Growth
Regions
Existing
Hotels/
Serviced
Apartments
Under-construction
SEZ
Parks
Under-construction
STPI Parks
STPI Parks
Upcoming
Hotels/
Apartments
BTS facilities
Existing
Malls / Serviced
Hyper-markets
Upcoming Under-passes
Under-construction
SEZ Parks
SEZ Parks
PSUs
R & D Organizations
Residential
Locations
Upcoming
Malls
Upcoming Flyovers
BTS
facilities
SEZ
/ STPI Parks
Upcoming
Under-passes
Potential
GrowthServiced
RegionsApartments
Existing
Hotels/
Legend
Upcoming
Flyovers
Upcoming
Hotels/ Serviced Apartments
Potential
Growth
Regions
Under-construction
SEZ Parks
Manyata
Tech Park
PSUs R &Tech
D Organizations
Prestige
Park
Bagmance
World Technology
BTS facilities
Centre
RMZ Ecozen
Fortune City
Residential Locations
Potential Growth Regions
13
14
Pritech Park
Salarpuria Hallmark
15
Upcoming Under-passes
Upcoming Flyovers
Ferns Icon
10
Salarpuria Touchstone
16
Salarpuria Supreme
11
Salarpuria Softzone
17
12
RMZ Ecospace
18
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Operational Area
as of H1 2010
(in million sqft)
6.80
Bagmane World
SEZ
Technology Centre
1.00
EMC2
Ferns Icon
0.38
Lenovo,
STMicroelectronics
STPI
Marathahalli to Sarjapur
RMZ Ecospace
STPI
2.00
Accenture, AOL,
Capgemini
Pritech Ecospace
SEZ
1.80
Quest, Firstsource,
Symphony Services
Vrindavan Tech
Village
SEZ
1.48
Cisco, OPI,
T-systems
STPI
1.00
Oracle, Nokia,
Yodlee
0.90
0.77
Honeywell, Subex,
KPIT Cummins
0.42
Salarpuria
Touchstone
STPI
0.42
MTS, Mentor
Graphics, ARM
Global Technology
STPI
Park
0.27
LSI Logic
0.21
RMZ Ecozen
0.11
Aricent
SEZ
STPI
Expected
Completion Date
Area
(in million sqft)
Prestige Exora
Building 1
STPI
Q1 2011
0.67
SEZ
Q4 2010
0.50
STPI
Q1 2011
0.45
SEZ
Q4 2010
0.32
Key Tenants
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Stretch
Operational
U/C
Planned
Total
Hebbal - K.R.Puram
36%
11%
15%
23%
K.R.Puram - Marathahalli
7%
30%
22%
17%
Marathahalli - Sarjapur
57%
59%
63%
61%
Vestian
Estimate
30.0
25.0
18.6
17.6
20.0
15.0
10.0
3.3
0.4
5.0
3.2
0.0
Operational
U/C
(2010 - 2012)
Supply Absorption
Planned
(2012 and beyond)
8
7
8%
6
5
6%
Vestian
Estimate
4%
3
2
2%
0%
2006
2007
Supply (STPI)
2008
Supply (SEZ)
27.8
2009
Absorption (STPI)
2010
Absorption (SEZ)
Vacancy in %
Page | 10
INR/sqft/month
80
60
40
20
0
2006
2007
CBD
2008
Suburban
2009
ORR
H1 2010
Peripheral
Occupier
IBM & IBM Daksh
> 1.0
Cisco Systems
Honeywell
Philips
> 0.5
EMC
Nokia
Outsource Partner International
T-Systems
AOL
Accenture
> 0.2
Capgemini
Nokia-Siemens
ANZ
LSI Logic
Area
(in sqft)
Nokia Technologies
1,26,000
Brocade
90,000
Company
70,000
Symphony Services
Pritech Park
60,000
Teleca
Salarpuria Hallmark
43,000
Cynivwea
RMZ Ecospace
42,000
Ocwen Financials
Salarpuria Supreme
28,000
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IT/ITeS companies occupy more than 95% of the total operational space of which, 80% are MultiNational Companies (MNCs).
IT companies located in this micro market operate in software development, R&D and engineering
services space. ITeS companies provide knowledge and back-end services in IT & Telecom, BFSI, and
Retail and Healthcare verticals.
1%
57%
42%
IT
ITeS
Others
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
IT and Telecom
BFSI
Healthcare
Retail/
Manufacturing/
Media &
Entertainment
Others
Software
Product
Development
Engineering
and R&D
Support
Services and
Training
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Uncertainty on future of tax holiday for SEZ units post implementation of DTC in April 1,
2011 may have adverse effect on ORR, atleast in short term, as most of the office space
supply along ORR is scheduled under SEZ category.
Growth of ORR may slowdown due to the shift in focus towards Bangalore North for
upcoming developments.
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ACRONYMS
ORR Outer Ring Road
Jn. Junction
MNCs Multinational Companies
IT Information Technology
ITeS Information Technology Enabled Services
CBD Central Business District
SBD Suburban Business District
PBD Peripheral Business District
ITPB International Tech Park, Bangalore
KIADB Karnataka Industrial Areas Development Board
JV Joint Venture
EPIP Export Promotion Industrial Park
SEZ Special Economic Zone
STPI Software Technology Parks of India
DTC Direct Tax Code
FSI Floor Space Index
PSU Public Sector Undertakings
BIA Bangalore International Airport
Q1 Quarter 1 (January March)
Q2 Quarter 2 (April June)
H1 First Half (January June)
BTS Built to Suit
BFSI Banking Financial Services and Insurance
R&D Research and Development
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