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Stretches along the ORR and extensions in north Bangalore find demand thanks to connectivity and airport-related development
The stretches along the Outer Ring Road (ORR) around Hebbal and localities such as Yelahanka in the vicinity of the new airport are emerging as realty hotspots with the IT development pushing demand, according to a coliera's International report.
Prime office properties in Bangalore are located in the central business district (CBD), secondary business district (SBD), Whitefield, Electronic city and along the Outer Ring Road in the peripheral business district (PBD). Currently, North Bangalore is emerging as the city's major micro market.
The third quarter of this financial year saw a significant total available supply of over 3.5 million sqft in the grade A office space segment. Primarily, close to half of this available supply was along the ORR, followed by other sub-markets such as EPIP Zone, Whitefield, Electronic city, Bannerghatta Road and the CBD.
The ORR has become a prominent IT destination in the city. It witnessed a rise in the demand from various IT companies due to availability of state-of-the-art IT campuses. The ORR has emerged as a preferred destination thanks to the connectivity put in place, there by reducing commuting time, says Goutam Chakraborty, Regional Director, colliers International. In addition, demand diversion towards North Bangalore was observed in this quarter and the trend is likely to continue in the near future.
The city's office market has seen marginal realignment in rentals. However, capital values remained stable. The CBD, ORR and Electronic City witnessed an escalation after a period of wait and watch. The construction of a six lane elevated road on the Bangalore-Hosur High-way is nearing completion, and is expected to solve traffic is sues. Rentals along the ORR and Hosur Road areas ranged from Rs 45-50 per sqft to Rs 25-30 per sqft per month, respectively.
The average yield for grade A office space in Bangalore was in the range of 9-11.5 percent.
The residential market comprises both apartments and independent residences. Currently, high-end residential developments are mainly concentrated along the CBD, eastern and south precincts of the city. Recently, north Bangalore has also witnessed a spree of realty activity facilitated by the new international airport at Devanahalli.
In the third quarter of 2008 approximately half a million sqft of supply was added in the prime residential areas of Bangalore. This supply has primarily concentrated in the new upcoming area such as Yelahanka and Whitefield.
The premium locations such as Palace Road, Richmond Road and Lavelle Road have witnessed nominal supply in the form of redevelopment. The demand position in north Bangalore remained high on account of increasing business activities in the vicinity of the new international airport.
In order to address the infrastructure issues, the city has witnessed an emergence of the walk-to-work concept. A number of mixed-use development projects have been launched in the city and the government has taken initiatives by planning five satellite townships to further reinforce this concept.
The rentals and capital values in most of the prime residential markets of Bangalore remained stable except north Bangalore where the market has witnessed a rise in rental and capital values in the range of 5-8 percent. â€œThe new airport is pushing demand for rented houses here from expats who are frequent fliersâ€, says Goutam. â€œThe international schools here are also pushing demand for rented houses. You have quality residential options here and these schools in the vicinity are drawing upper income groups, he adds.
The rentals in Bangalore central remained highest in the range of Rs 55-60 per sqft per month. The peripheral locations such as yelahanka and Bannerghatta Road fetched average rentals in the range of Rs 18-22 per sqft per month. The average yield on premium residential properties hovered in the range of 5-8 percent.