Tag: Bangalore Property Prices

Bangalore attracts more private equity money investment

The real estate market in Bangalore attracted the maximum private equity (PE) investment in the country in the first half of 2014, beating the national capital Delhi as well as the commercial capital Mumbai, according to property consultancy firm Cushman & Wakefield.

Led by high demand for office spaces as well as steady demand for residential property, the city’s real estate market saw PE investments jump nearly 20 times yearon-year to Rs 2,005 crore. The city had received PE investments worth Rs 103 crore in the first six months of 2013.

While Mumbai received investments worth Rs 1,140 crore, Delhi-NCR got Rs 490 crore and Chennai Rs 200 crore during the same period. “Availability of investible leased office assets and stable yields kept the interest levels high,” said Sanjay Dutt, executive managing director, South Asia, at Cushman & Wakefield.

“The share in overall PE investments is expected to remain significant in the coming years for Bangalore,” he said, adding “Most of these assets have high occupancy rate and provide stable yields of approximately 9 per cent, making them highly attractive to investors.” Piramal Fund Management has just concluded a non-convertible debenture of Rs 100 crore with Century Real Estate Holdings against two projects in Bangalore. The deal was preceded by Tata Capital investing Rs 470 crore for about 15 per cent stake and a board seat in Shriram Properties and Vaswani Group raising Rs 100 crore from J P Morgan.

“It is easier to underwrite projects as the ticket size is reasonable in Bangalore,” said Khushru Jijina, managing director at Piramal Fund Management. “We close almost one or two transaction every month but there is reverse challenge of velocity that one has to be careful about.” Piramal Fund is looking to invest Rs 300-400 crore per deal in Bangalore compared with Rs 100 crore earlier.

Red Fort Capital is targeting midincome projects between Rs 60 lakh and Rs 4 core in Bangalore.

“While Mumbai and NCR is a high value and margin market, Bangalore is the most stable with demand driven by end users. The churn in capital is also faster as compared to other markets,” said Jasmeet Chhabra, managing director, Red Fort Capital.

Other funds looking for transaction opportunities in Bangalore include Milestone Capital Advisors, Motilal Oswal Private Equity, Xander, Shapoorji Pallonji and Blackstone. “We will invest 30-40 per cent of our total fund outlay in Bangalore market and are evaluating multiple transaction for our new Rs 500-crore fund that will be launched in coming months,” said Navin Kumar, ED, fund raising & investor relations, at Milestone Capital Advisors.
Source: The Economic Times

A High Rise in demand in residential and commercial properties in Bangalore

The demand for commercial property in Koramangala is high despite the sluggish demand for real estate in Bangalore and other major metros. Many residential buildings are being replaced with commercial towers with small offices, businesses and restaurants.

From Retail to Restaurants, this place is on a commercial high. Statistics reveal that the price rise is between 10 to 15 percent the last year and the trend is expected this year too. The average price for a commercial property is approximately ₹ 12000 to 14000 per sq.ft. The advantage of being located close to ORR and CBD is luring crowds.

Bangalore witnessed approximately 1.6 million sq.ft of grade A office supply in the last quarter of 2012. The supply was primarily focussed on peripheral locations of outer ring road due to excellent connectivity and growing residential catchments. The IT sector was dominant with over 60 percent of net leasing activity, followed by banking and financial institutions at around 9 percent of the total.

The demand for office space is likely to spike the rentals on outer ring road and whitefield. With more businesses moving to Koramangala, ORR and Whitefield, prices of residential housing is expected to spike. The tremendous growth of IT companies have revolutionised the real estate market of Bangalore and triggered massive infrastructure development. Among various developed localities in Bangalore, a lot of interest is generated about Infantry Road. So, let’s delve into this locality and learn what makes the area perfect for investment.

All the major localities like Commercial Street, Church Street, Shivaji Nagar and Lady Curzon Road are in the vicinity of Infantry Road. It is just half a kilometer away from the MG Road Metro Station. The area is even close to the Bangalore Cantonment Railway Station which is at a distance of 3 km and Shivaji Bus terminal about a kilometer away.

According to Jamal Ahmed, Mansions Real Estate connectivity of the area through buses has largely contributed to the locality’s real estate prospects. The area has seen four per cent appreciation in rental values as it is preferred by people working in the nearby areas.

Additionally, there are many industrial areas and business parks in and around Infantry Road, which makes it a brimming commercial hub. Companies like Sony Ericson and Cisco have their offices in the vicinity.

There is an array of housing options with many renowned developers holding a presence here. Prestige Group, Embassy Group, Nandini Builders and Hoysala Projects Private Limited these developers have targeted mainly the working professionals in the city thereby, offering housing options for different income groups.

Source: Aawas.in