Bengaluru’s prominence in the commercial office segment is even more pronounced. The city historically has been accounting for around one-third of the total demand of Grade A office spaces in the country. 2023 was no different – Bengaluru witnessed over 15 mn sq.ft. of leasing activity, leading the next high-volume Delhi-NCR market by around 35%. As far as flex stock is concerned, Bengaluru is the largest flex space market in India with 34% share in total flex stock.
In the industrial and warehousing segment too, the city is an important centre, consistently generating annual demand of 3-5 mn sq.ft. of Grade A space. With close to 100 MW of colocation capacity, Bengaluru is also an established DC market and holds tremendous growth potential in the foreseeable future.
The commercial real estate segment is robust, with a steady demand for office spaces, especially in the central and peripheral business districts. The retail segment growth is driven by the expansion of organized retail and the emergence of mixed-use developments.
The industry is grappling with regulatory changes, liquidity constraints, and the lingering impact of the pandemic. Developers also face challenges due to rising construction costs and regulatory approvals.
The real estate market in Bengaluru is currently experiencing a robust surge, primarily propelled by the city’s flourishing IT industry. Kengeri in the southwest is experiencing rapid growth, driven by the presence of multinational corporations and IT parks. This region provides a range of luxury and affordable housing options, boasts excellent connectivity through various routes, and features well-established social infrastructure, making it an increasingly attractive residential destination.
Sarjapur Road has witnessed a staggering surge in property prices, soaring over 100% in the last five years, marking a meteoric rise from its agricultural roots. This growth is substantiated by the presence of major IT giants which have established expansive campuses, fostering job creation and spurring demand for residential spaces. The real estate landscape along Sarjapur Road is characterized by a diverse array of offerings, ranging from opulent 4-bedroom penthouses in gated communities to compact and affordable studio apartments, ensuring a tailored fit for various lifestyles and budgets. Looking ahead, the impending completion of the Namma Metro extension in 2025 is poised to be a game-changer, not only significantly reducing commute times but also potentially boosting property values by up to 15%, as predicted by industry experts. At Kengeri, affordability takes center stage, with residential housing options here being 30-40% more budget-friendly compared to Sarjapur Road. This affordability factor makes Kengeri an attractive prospect for first-time buyers and those mindful of their budget. The area’s economic vibrancy is fuelled by the presence of prominent companies alongside thriving IT parks like Global Village Tech Park creating a dynamic job market. Connectivity is another notable strength for Kengeri, enjoying excellent accessibility through major routes such as Mysore Road and NICE Ring Road, supplemented by the recently inaugurated Kengeri Metro station. This well-connected infrastructure provides residents with multiple commuting options, contributing to the area’s overall appeal. The social fabric of Kengeri is woven with essential amenities, encompassing renowned educational institutions, healthcare facilities and vibrant shopping destinations This comprehensive social infrastructure assures of a. well-rounded living environment, further enhancing Kengeri as a preferred residential destination.
The residential real estate sector in Bengaluru is thriving, showcasing a remarkable surge in apartment sales, surpassing a substantial 20% increase in 2023. This positive trend extends across both luxury and affordable housing segments, underlining the strong demand in the diverse residential market. On the commercial front, the sector is experiencing robust growth, with office space absorption witnessing a significant 15% uptick in 2023. This is further fuelled by the emergence and popularity of co-working spaces and flexible work arrangements, contributing to the sector’s overall dynamism. In the retail sector, the industry is adapting to changing consumer preferences with a shift towards mixed-use developments and experiential shopping, embodying resilience, and adaptability. These positive developments underscore the resilience of Bengaluru real estate market, reflecting a landscape that is not only thriving but also evolving in response to the changing dynamics in each segment.
Bengaluru’s real estate market is witnessing a surge in demand, driven by various factors. While rising prices may present challenges, it’s important to note that the market is still vibrant, offering a range of housing options to cater to different budgets, especially in emerging areas. Addressing infrastructure concerns is a key priority for the city, and ongoing initiatives are set to enhance the overall quality of life. Efforts to alleviate traffic congestion and improve public transport are in progress, indicating a positive path for the city’s liveability and, consequently, its property values. The limited land availability within city limits has prompted development on the periphery, opening new opportunities for growth and community expansion. While longer commutes are a consideration, this trend contributes to the creation of well-planned, sustainable neighbourhoods.
Read the full story that first appeared in Our Bangalore dated Jan 26 to Feb 2 here: