Category: Bangalore Real Estate

Improved infrastructure to development in Bangalore West

Bangalore west is a market that is coming of age. One of the early residential areas with industrial growth, this region has now opened out to witness stand-alone commercial and integrated developments. Connectivity has led to a significant boost in the development of this region – the Tumkur Road highway, improvements to Mysore Road and Magadi Road with connectivity enhanced through the Outer Ring Road (ORR). With the Metro line soon to be inaugurated between Peenya and Sampige Road, commercial property development will receive another boost.

Ram Chandnani, Deputy Managing Director – South India, CBRE South Asia, elaborates, “Localities in Bangalore west lie within an 8-10 km radius from the Central Business District (CBD), along with the required social infrastructure growth. Over the years, it has primarily developed into a residential hub with Rajajinagar, Basaveshwaranagar, Malleswaram, Yeshwanthpur, Mathikere, Mahalakshmi Layout, Nandhini Layout and Chandra Layout being some of the prominent localities. Although currently not seeing much commercial development with the exception of a prominent mixed development project, this is expected to change with Metro connectivity and quality residential developments coming in.”

“Commercial development in Bangalore west is still at a very nascent stage with handful of Grade A developments. Office space in this micromarket is typically characterised by Grade C standalone buildings having average size of 10,000 sqft,” says Naveen Nandwani, Director – South India, Cushman & Wakefield.

Factors pushing commercial growth

According to Ram, factors pushing growth in this micromarket are future Metro connectivity, rise in Grade A residential developments, enhancement in social infrastructure, proximity to the airport, improvement of infrastructure through the NICE corridor, State Highway development projects connecting to Mysore, and industrial development in Kumbalgodu, Kengeri and Bidadi.

He adds, “Owing to these, Rajajinagar, Magadi Road, Jalahalli and Mysore Road have emerged as commercial hotbeds. Some emerging trends in the region are mixed use developments promoting the ‘walk-to-work’ concept, small to mid-sized stand-alone commercial buildings which are more suitable for corporates looking for smaller office spaces, and tech parks due to proximity to Mysore, residential catchments of west Bangalore and the NICE corridor.”

Naveen explains, “Considering the commercial space market, the west still remains largely unexplored. Office space developments in this quadrant are still to witness growth on the lines of commercial development in Electronics City, Whitefield and now along the ORR belt (Sarjapur Road to Hebbal). Further, areas such as Mysore Road with sizeable land parcels are yet to see significant growth in terms of residential catchments and support infrastructure. However, Mysore Road was the first to witness quality supply in 2001 followed by Malleswaram in 2010.”

With connectivity augmented through various civic infrastructure projects such as the upgraded NH-4 and the upcoming Metro line, this region is opening up to further residential, industrial, commercial and retail growth. “The rise in the popularity of this micro-market can be attributed to three key reasons – the availability of land parcels that provides room for future development of healthcare, entertainment and other aspects of social infrastructure development; large and steadily growing industrial hubs as economic activity is directly correlated to residential growth; and improved connectivity through the NICE Ring Road that provides easy access to Hosur,” Ram states.

Bangalore west — scenario

Research by Cushman & Wakefield indicates that Grade A office space in the west comprises SEZs and other commercial spaces. SEZ space accounts for close to 48 percent of the total stock in the west. Operational Grade A commercial office stock measures around 3.3 million sqft with no under-development stock currently.

Other office space buildings primarily belong to the Grade C category. The organised office space development in the region stands at three percent of the total stock.

Naveen explains, “Companies already present in this micro-market and looking to expand in quality commercial spaces are moving towards locations such as the ORR. This is due to competitive rentals, proximity to residential catchments, and good connectivity to central and suburban locations of the ORR belt.”

Areas with potential

Naveen says, “In the long run, Mysore Road can be anticipated to emerge as a commercial destination due to availability of land, upcoming Metro and connectivity through NICE Ring Road.”

“Areas with potential as future commercial hotspots in the west are Mysore Road, Magadi Road, Rajajinagar, Tumkur Road and Jalahalli,” Ram adds.

Source: GharaBari.com

Latest Property News on ‘Bangalore’

The high court on Tuesday ordered notice to the government, KIADB and Bangalore Urban DC on a petition filed over two acres of grant land in BKPalya, near Devanahalli.

A high court judge’s son is said to have received Rs 1.24 crore in compensation from KIADB in lieu of the land.
Justice AN Venugopala Gowda also requested advocate-general Prof Ravivarma Kumar and senior counsel PS Rajagopal to assist the court as amicus curiae on the issue, before adjourning the hearing to Wednesday. The judge requested them to enlighten whether the court can proceed against the DC, who is also a quasi-judicial authority.

The court also held that a copy of the petition was deemed to have been served on Phaniraj Kashyap, one of the respondents and son of sitting HC judge K Sreedhar Rao, since it was sent by registered post on August 5. Phaniraj, who filed a caveat, did not appear on Tuesday, which the court took note of.

The petitioners, who claimed to be legal heirs of the original allottee of the land, said it cannot be alienated within a stipulated time. Yet the land changed several hands before reaching Phaniraj during the non-alienation period. When they challenged it, their petition was rejected by the assistant commissioner, following which they moved the deputy commissioner.
The DC initially stayed the assistant commissioner’s order. “Phaniraj approached the DC personally and with influence from his father, succeeded in getting the stay order altered,” they alleged.The land was acquired for an IT park by the KIADB, which awarded Rs 1.24 crore in compensation to Phaniraj, ignoring the petitioners’ objections, they said. PS Rajagopal said the high court has jurisdiction to look into orders passed by DCs under Article 227 of the Constitution, and that the case can be referred to a magisterial inquiry.

Justice L Narayana Swamy on Tuesday disposed of a petition filed by M Raghu, BBMP junior engineer (South), asking the civic body to pass a fresh order in his case.
This was after the court noticed that as against the BBMP commissioner’s directive to suspend him on August 7, the additional commissioner had issued a suspension order on August 6 itself, over 22.88 tonnes of missing iron rods obtained during the demolition of Puttanna Kanagal Chitramandira, as there was no auction or records about storing the same.

Source: WWW.INDIANREALTYNEWS.COM

Here’s an update on Bangalore’s real estate market

The proposed Mumbai-Bangalore Industrial Corridor is expected to connect Bangalore City in the north-western side of the city along Tumkur Road. Since the last 7-8 years (since 2005/2006), Tumkur Road and its surroundings are witnessing significant augmentation and improvement in terms of infrastructure in general and connectivity in particular.

Some of the key infrastructure projects rendered operational in the area in the recent past include the Elevated Expressway, Bangalore-Mysore Infrastructure Corridor (BMIC) and Bangalore International Exhibition Center (BIEC).

Other on-going and proposed infrastructure initiatives are Metro Rail Phase 1 & 2 and Peripheral Ring Road. These infrastructure projects, along with the proposed Mumbai-Bangalore Industrial Corridor, are expected to significantly improve the physical characteristics of the area.

The result will be the development of large integrated projects, as there are large industrial land parcels waiting to be unlocked for quality real estate development with the growth of economic drivers in the area.

Until the recent past, the population of this micro-market had a low socio-economic profile – it was dominated by blue-collar workers as the area was a hub for small scale industries manufacturing ancillary parts for PSUs, automobile industries, garment industries, etc.

Over a period of time, the area saw the arrival of large Indian and multinational industrial entities such as Kennametal, Widia, ITC , Volvo, BOC , Reliance Packing Industries, etc.

Since last 4-5 years, the area is being viewed as one of the fast developing micro-markets in the city, as is evidenced by the launch of some large real estate projects complemented by key infrastructure initiatives.

This has vastly improved the characteristics of the area, which now has good availability of large land parcels due to the unlocking by sick industrial units at competitive prices, and a visibly changing socio-economic profile of the resident population.

Some of the large developments envisaged then (now completed) are Brigade Gateway Project on 40 acres land parcel, BIEC, Taj Vivanta – Tumkur Road, etc., to mention a few.

Till date, about 17 residential apartment projects launched and an there is expected to supply about 5,099 units in the micro-market on a cumulative basis.

Some of the graded developers like Brigade, Prestige and Sobha have also ventured into this market and are targeting the upper-middle income, middle and upper-lower income segments.

Social infrastructure facilities like hospitals and schools are already in place and are acting as catalysis for residential development in the area.

Most of these social infrastructure developments are adequately catering to the existing residing population. With the proposed Mumbai-Bangalore Industrial Corridor, this micro-market is expected to benefit from an increase in much-needed economic driver, which will significantly increase demand for all core real estate asset classes like residential, commercial / office, retail, hotel, industrial infrastructure, etc.

Some of the commercial / office and retail developments envisioned during 2005/2006 within this micro-market and its surroundings are operational now. These include the Brigade Gateway Project – an integrated development comprising residential apartments, commercial / office, retail and hospitality which is currently known as ‘Brigade World Trade Center’.

Commercial Grade A developments in the area account for about 260,000 sq. ft., which includes Brigade Rubix at HMT Township (about 180,000 sq. ft. of office space) and 80,000 sq. ft. of office space by IBC Developers within the residential development of Platinum City.

Tumkur Road is also fast emerging as an attractive destination for stand-alone developments and graded shopping complexes. This is evident from newly launched Brand Factory at 8th Mile, McDonalds, etc. along with ‘vanilla ‘ stores having brands like United Color of Benetton, Wrangler, Levis, Lee and Woodlands.

The proposed Mumbai-Bangalore Industrial Corridor is likely to leverage the residential, commercial and industrial infrastructure along with existing, ongoing and proposed infrastructure initiatives in terms of transforming this micro-market into a major growth node for the city.

We see the emergence of an important economic hub catering to the city in general and the micro-market in particular. The area within a 4-5 km radius along both sides of Tumkur Road is likely to develop into an influence zone for the proposed Mumbai-Bangalore Industrial Corridor in terms of residential belts like Magadi Road, Hesaraghatta, Jalahalli, etc. up to Yeshwanthpur.

Metro Rail Extensions To Spawn New Residential Locations

The Bangalore Metro Rail Project is envisaged as a major game-changer for Bangalore City in terms of inter-connecting different parts of the city and reducing traffic congestion on city roads, and significantly cutting down the commuting time.

Phase 1 of the Metro Rail Project largely covers the city centre, running a total length of 42.3 km through two corridors – the East-West Corridor (about 18.10 km linking Baiyappanahalli and Puttenahalli along Kanakapura Road) and the North-South Corridor (about 24.20 km liking Mysore Road with Tumkur Road till Hesaraghatta Cross). Phase 1 is likely to be commissioned by 2014.

Details of the proposed Phase 2 of the Metro Rail Project, consisting of four extension lines and two new lines with a total length of 72.095 km and 61 stations are given below:

The four proposed extension lines under Phase 2 are expected to provide much-needed ‘last mile’ connectivity to commuters and also optimize the utilization of Phase 1. The two new lines traverse through some of the densest and traffic-congested areas of the city, and will offer faster connectivity to the Information Technology Industry. The Phase 2 is planned to be completed within 5 years from the date of approval by the Government of India.

With Phase 2 covering a large part of the city, especially fast-growing locations like Whitefield, Mysore Road, Tumkur Road and Bannerghatta Road, these areas are likely witness further development in terms of all core real estate asset classes for the following reasons:

* Metro Rail Projects are being developed across the world’s high-density corridors because they provide vastly improved connectivity. This phenomenon is likely to be seen all along the alignment in Bangalore as well, resulting in substantial development

* There is a proposal to permit a maximum FAR of 4.00 (against the current average FAR of 2.50) all along the Metro Rail alignment within 500 meters on both sides of the Influence Zone. This additional built potential of the properties along the influence zone will be able to make use of this additional FAR, as land values along these corridors are very high

* Improved connectivity and reduced travel time may encourage the city population to prefer suburban locations for residential purposes (to avoid residing in high-traffic areas), which would further catalyse the development of social infrastructure like schools, healthcare, retail developments, leisure and entertainment facilities, etc. in the suburban locations due to the further development of residential catchments.

Considering the combined coverage of both Phase 1 and Phase 2 of Metro Rail Projects, all localities up to the BMIC Corridor alignment within Bangalore City are likely to witness significant growth over next 5-7 years.

Source: moneycontrol.com

Housing prices begin to fall as slowdown bites

NEW DELHI: The rising interest rates, liquidity tightening in the banking system and slowing down of economy have badly affected the real estate sector. As the demand for residential real estate has softened, its prices across the markets in India have started showing a declining trend.

According to National Housing Bank residential index, the prices have shown a declining trend in 22 out of 26 cities in the April-June 2013 quarter compared to the January-March quarter. Real estate prices have softened in major cities like Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune. (see chart)

Real Estate Price Fall Index
Real Estate Price Fall Index in Major Cities

R V Verma, CMD of NHB, said rising interest rates have adversely affected the demand from end-users, which led to rise in the inventory of unsold property. As builders have to meet the loan repayment liability as well as complete the already started projects, they find it more prudent to cut prices to sell the units and generate cash.

Sanjay Dutt, joint MD at Cushman and Wakefield, a property consultancy, said the decline in prices is not sufficient enough to attract the buyers. But, the good thing is that a beginning has happened. He felt if the economic conditions do not change, the trend will continue and it will provide a good opportunity to the end-users to buy a house. Dutt said as the sentiment is subdued the investors are also absent from the market.

Verma too argued that the declining trend in the real estate prices is good for both builders as well as end-users. As the cost of money has gone up and the chances of making money in the short-term are not very bright, the investors are absent. This will be a positive for end-users to buy house.

Verma added that if prices come down, transactions will increase, which would improve the cash flow in the sector. In 2008 and 2009, when the entire country was reeling under the global financial crisis, real estate came out of it unscathed mainly because of its strategy to cut prices and increase turnover.

Source: The Times of India

Brokers turn developers as realty business booms

BANGALORE/ MUMBAI: PrashanthSambargi, partner at Bangalore-based real estate brokerage firm Mars Realty, is these days busy designing residential projects for two land parcels he owns in the IT capital of India. “I am now looking at smaller size projects with 18-40 units with 20 months’ turnaround time… big builders do not enter this segment,” he says.

Sambargi is among a growing group of property brokers turning builders, armed with huge savings from their booming business and a ground-level understanding of what homebuyers want as well as the issues faced by developers.

Like Sambargi, who plans to float a separate company for real estate venture while continuing with his brokerage business, many brokers are opting for smaller projects of 10-30 units in relatively cheaper locations to get into the capital-intensive business. Many are entering into joint development pacts with landlords or developers.

Silverline Realty, another Bangalore brokerage, has already floated a real estate arm. “We are looking at growing slow and not taking huge projects as the business is at nascent stage and there are many establish name in the market,” its director Zahed Mahmood says.

Started by Farooq Mahmood who earned a brokerage of 8,000 for his first deal, Silverline today owns large land parcel across Bangalore and has five residential projects with an average price of 7,000-10,000 per sft in the development stage.

It is entering into joint development with builders like Prestige Estate Projects to penetrate deeper in the market. “Our brokerage business is growing at 20-25% quarter-on-quarter and helps us channelise our resources into the new business venture,” Mahmood says.

According to property research firm PropEquity, 13,797 residential units were sold in Bangalore in the first quarter of the current fiscal, up from 9,742 units absorbed in the year-earlier quarter. “Bangalore has been performing well with a 58% increase in new launches and 42% increase in absorption in the first quarter,” Samir Jasuja, Founder and CEO of PropEquity, says.

Bigger markets of Mumbai Metropolitan Region and National Capital Region (NCR) saw absorption of 15,501 and 26,798 residential units, respectively, in the first quarter. Property business has been booming across Indian cities, helping brokers increase their business manifold both in terms of the deal value and the number of transactions. And most tend to park their money in a market they best know-property.

“Project delay hits your clientele. There are many projects, which have been delayed for years. My focus is on-time delivery and doing projects in smaller towns where land prices had not shot up,” says Deepak Kohli, director of Deep Realtors in Delhi, who has launched a real estate firm, Abode. Kohli, who started his real estate brokerage and consultancy business 15 years ago, now has three residential projects and one four-star hotel project in Vrindavan at different stages of planning and construction stages under Abode.

“Brokerage is still a lucrative business with raw income, but I do not focus on it anymore and has put it on the backburner,” he says. Another Delhi-based mortgaged professional Mrityunjay Kumar has started a 700-unit group housing project at Noida Extension in a joint venture last year.

“I had worked with builders for mortgage and knew the business well. However technical know-how and competing with big brand in the market continues to be a challenge as I have to depend on my colleague for it,” says Kumar, who has worked with Reliance capital as branch area manager and ICICI Bank, decided to foray into real estate seeing demand for low income homes.

Two decades-old broking firm Realistic Realtor is setting up a million sq ft mixed used commercial property in Gurgaon with investment from high net worth individual and small investors. The ground-level experience helps many broker-turned-realtors to deal with regulatory and financing hurdles that challenge new entrants.

Manoj Nihalani, MD at Mumbai-based Pacific Landmarks, says, “The ground-level experience we had as a broker helped us in overcoming these as we were aware how funding management and other things could be resolved through stock selling, incentivising customers and contractors.” New launches driven by higher sales across some of the major markets have made property brokers in big cities turn to real estate development business to tap the market.

Organised developers launched around 38,000 residential units in the first quarter of 2013 in major cities with mid-range segment constituting 60% of the total. Bangalore contributed 31% of the overall new supply in the top eight cities followed by NCR and Mumbai, according to real estate consultants Cushman & Wakefield.

Source: The Economic Times