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Bangalore Residential Report

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Bangalore Residential Report

  1. 1. Bangalore: Residential Market Report April 2012 A REPORT BY STRATEGIC ADVISORY GROUPW O R K P L A C E S E R V I C E S
  2. 2. BANGALORE RESIDENTIAL MARKET STATISTICS: 2012 AND BEYOND 14 Million 13% Bangalore metropolitan population average annual price appreciation by 2021.1 rate in residential sector for last 4 years. 20,600 4.5% residential units absorbed in 2011. average annual residential yield rate. 100,000+ 44,000 average annual addition in IT/ITeS residential units launched in 2011 workforce for past 2 years; [38,700 and 5,300 in apartment expected to grow at least at this and villa/row houses category rate for next 3 years. respectively]. 55,400 15% residential units available. CAGR for residential sector during 2008-11. 1 Source: Census of India population in Bangalore of 9.6 million is projected assuming CAGR of 4.3% to arrive at a population of 14 million for 2021.1
  3. 3. EXECUTIVE SUMMARY• For the past two decades, Bangalore has been the fastest • Bangalore cannot afford to witness same number of projectgrowing city of India. Bangalore is termed as ‘World City’ being launches this year as 2011. If the activity level does not drop toestablished Silicon Valley of Asia; in addition it has multi-cultural half of 2011 then, Bangalore residential market is likely to facepopulation, good education & social infrastructure, and an oversupply situation.improving physical infrastructure. • Last year, Bangalore witnessed entry of new residential• Bangalore’s residential market interests all stakeholders – products namely Villament and Branded Homes. Villamentdevelopers, landowners and investors on account of large, projects have been launched in Off Central and suburbaneducated, young, double income household and growing locations by developers like Habitat Ventures, LGCL andmigrant population. Many prominent national and international Salarpuria. An international company – Westcourt has launcheddevelopers have entered Bangalore residential market and more a Branded Home project near Mekhri Circle, Bellary Road.are expected to join in the coming years. • Bangalore’s residential segment is likely to grow annually at• Currently, the most promising residential micro-markets in 15% for next 3 years. In 2012, Bangalore is pegged to absorbBangalore are Outer Ring Road (ORR), Whitefield and Bangalore 23,000 residential units. The capital value would appreciateNorth. between 12% to 20% across different micro-markets on account of rising construction cost and land price.• Old Madras Road and Mysore Road micro-markets haveuntapped potential for residential development. Old Madras • South East (SE) quadrant micro-markets – Whitefield, ORR andRoad is gaining traction faster due to its proximity to IT hubs – Sarjapur Road will remain active in short to medium term owingWhitefield & ORR, Bangalore International Airport and City to proximity to established IT economic hubs. However, nextCenter. growth direction would be North East (NE) quadrant – Old Madras Road & Bangalore North (Hennur Road, Thanisandra• In Apartment market, except budget category (less than INR Road and Bellary Road). Although, Bangalore North may face25L), residential products across other segments are under over supply situation in short term owing to over enthusiasm ofdownward pressure owing to high activity levels. Even in the mid developers towards this micro-market, the long term potentialcategory (INR 25L – 50L), developers have launched oversized of this micro-market is very high.apartment projects. • Economic outlook for the city remains strong in coming years• Bangalore is one of the most promising markets for Villa as many large IT/ITeS, Engineering and Automobile MNCs haveprojects in India. However, as per current statistics, the market aggressive growth plans for the city. This would ensure healthyhas very high expectation from this product. Many under growth rate in residential segment.construction projects may take a longer timelines forcompletion.• As per absorption analysis, Bangalore’s buyers are moresensitive compared to other southern Indian cities towardsquality of the project, amenities and unit sizes.BANGALORE: RESIDENTIAL MARKET REPORT 2
  4. 4. Bangalore boasts of the highest growth rate among all Indian cities, with double digit annual growth rate of IT/ITeS sector. Currently population of the Bangalore Urban District is 9.6 million and is expected to grow to 14 million by 2021. • Bangalore owes its multi-fold economic growth since 1990s to IT/ITeS industry. The wealth created by the new industry has had a multiplier effect leading to a real estate boom, a flourishing retail and leisure industry. The knowledge economy of Bangalore has transformed it from a small town, peaceful, pensioners’ paradise to a global technology hub. • Post 1991, economic liberalization led to the growth of knowledge economy thereby leading to migration of educated middle class to the city; exposure of the young urban population to global standard of living; availability of housing finance and private participation in real estate sector set the tone of social infrastructure residential, retail, education and others in the city. • Bangalore is expected to continue to follow upward prosperity trajectory in coming decades as well. As per Mckinsey 2, by 2030 among all Indian cities Bangalore would have highest per capita GDP. Bangalore Key Facts Key Facts 3 Area (sq.km) 1,306 Population as of 2011 9.6 million 4 5 Decadal Population Growth Rate 47% 2 Source: McKinsey Global Institute – Indias Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth, published in April 2010. 3 Bruhat Bangalore Mahanagara Palike (BBMP) was formed in 2007 and it includes 100 wards of the erstwhile Bangalore Mahanagara Palike, with seven neighboring City Municipal Councils, one Town Municipal Council and 110 villages around the city. 4 Census of India 2011, Provisional Population for States 2011. 5 With urban population of 9.6 million in the year 2011, Bangalore is the third most populous city and fifth largest urban agglomerations in India. Population in the city grew at an annual growth rate of 4.7% during 2001 – 2011; population for the year 2021 assuming the same growth rate could be pegged at 14 million.3
  5. 5. Bangalore’s emergence as a world city is closely tied with growth of IT sector. Currently, City has over 800,000 IT/ITeS workforce and adding over 100,000 workforces every year. As of now, 2,840 IT/ITeS companies including more than 100 Fortune 500 companies have established their operations in Bangalore. Key reasons of Bangalore’s emergence as an IT hub of India are: • Access to Talent Pool on account of : a) Availability of education institutions, during early 20th Century British Government developed excellent education infrastructure in Bangalore City. This resulted high penetration of English language in local population. b) Today Bangalore has over 5400 schools and 620 colleges. Colleges offering general degree are about 350, engineering colleges account for 80, medical seven, Law - 72 and Management-120. c) Karnataka was the first Indian State to recognize the importance of technical and engineering education and therefore encouraged the setting-up of privately-owned engineering colleges. d) Bangalore has nationally renowned professional institutes such as IISc, ISI, IIMB, NLSUI, NID, IIITB and many more. e) Presence of PSU and Research institutions. Until 1990s growth of Bangalore was largely driven by public sector companies and research organizations. Post-independence, the city evolved as an engineering hub with establishments of large Public Sector Undertakings (PSUs) namely HAL, ITI, ISRO, HMT, BEML, BEL and more. • Multi-Cultural Environment: Bangalore is home to diverse groups of people. Bangalore attracts a large number of immigrants from across the state and country. As per Bangalore City Development Plan for JNNURM (2006), immigrants from other parts of Karnataka constitute 53%, Tamil Nadu 19%, Andhra Pradesh 9%, Kerala 7% and Others 19% of the population. In addition, the city also attracts a large number of expats from other nations. • Good Social Infrastructure: Bangalore has well developed business and social infrastructure including renowned health institutes, modern format retail malls, entertainment options and star category hotels. • Moderate Climate: Due to its high elevation, Bangalore enjoys a more moderate climate throughout the year. Bangalore experiences a tropical wet and dry climate with summer temperatures ranging between 34°C–35°C and winter temperatures between 15 °C– 18 °C.BANGALORE: RESIDENTIAL MARKET REPORT 4
  6. 6. GROWTH OF BANGALORE METROPOLITAN CITY TIME LINE 1537 1807 • Bangalore founded by • British established Kempe Gowda Bangalore Cantonment LEGISLATION STRUCTURE Bangalore also called Bengaluru, is the capital of the Indian state of Karnataka. Located on the Deccan Plateau in the south-eastern part of Karnataka, Bangalore is Indias third most populous city and fifth- most populous urban agglomeration. Bangalore is well known as a hub for Indias information technology sector. It is among the top 10 preferred entrepreneurial locations in the world. A succession of South Indian dynasties ruled the region of Bangalore until in 1537 AD Kempe Gowda—a feudatory ruler under the Vijayanagara DEVELOPMENT OF THE CITY Empire—established a mud fort considered to be the foundation of modern Bangalore. Following transitory occupation by Maratha and Mughal, the city remained under the Mysore kingdom. Bangalore continued to be a cantonment of the British and a major city of the Princely State of Mysore which existed as a nominally sovereign entity of the British Raj. Following the independence of India in 1947, Bangalore became the capital of Mysore state, and later Karnataka. Today as a large city and growing metropolis, Bangalore is home to numerous public sector heavy industries, software companies, aerospace, telecommunications, and defence organisations. Bangalore is known as the Silicon Valley of India because of its position as the nations leading IT exporter. A demographically diverse city, Bangalore is a major economic and cultural hub and the second fastest growing major metropolis in India.5
  7. 7. 1889-1945 1945-1976 1976-1991 1991-2007 2011 - PRESENT • Bangalore had two • City Improvement • In 1976, CITB and • In 1991, Economic • BDA released CDP 2015 regions: Pette (a native Trust Board (CITB) was ? other planning bodies liberalization in India for Bangalore in July settlement) and constituted in 1945 and ? were transformed in to 2007 Cantonment (army in1949 Bangalore City ? Bangalore Development • In 1994, 74th settlement) with their Municipality and Civil & ? Authority (BDA) Constitutional respective Military Station Amendment came into administrative bodies Municipality merged • Publication of first existence namely Bangalore City under Bangalore City Comprehensive Municipality and Civil Corporation (BCC) Development Plan (CDP) • Revised Bangalore & Military Station for Bangalore in 1985 CDP in 1995 Municipality • Constitution of Metropolitan Planning • Government established • In 2005, FDI • Constitution of Town Board in 1961 Bangalore Metropolitan permission in real Planning Committee in Region Development estate sector 1889 • Town and Planning Act Authority (BMRDA) in in 1964 1985 • City Improvement Trust Board (CITB) was • Constitution of City constituted in 1945 Planning Authority to prepare Outline Development Plan (ODP) • The first ODP, master plan for the city was prepared & approved in 1972• Bangalore developed • Integration of Pette • BDA led allotment of • 74th Constitutional • In 2008, Bangalore as two different and Cantonment regions residential sites to Amendment International Airport settlements: individuals. Key BDA transformed the role of commenced its services • While BCC layouts include BTM and BDA from provider to thereby strengthening - Pette was an organic concentrated its efforts HSR layout towards enabler. This real estate activities development, with on maintaining the city south-east, HRBR and amendment also narrow streets and clean and beautiful, the OMBR Layout towards encouraged • Responsive zoning mixed land use. CITB paid attention to north-east of the city participation of private regulations by Between 1898 and develop new extensions and RMV and developers in real estate promoting mixed land 1920, Bangalore City to meet the housing Sadashivnagar towards developments uses along the Municipality developed new extensions - demand. Between 1945 north-west commercial axes and Chamrajpet, and 1976, CITB acquired • Rise of IT/ITeS sector mutation corridors Malleshwaram and 1,411 hectares of land • BMRDA provided created new economic which have led to the Basavanagudi and distributed 68,300 framework for the magnets – Electronics development of self- sites. It developed new organized growth of City, Whitefield and ORR sustaining - The cantonment locations including towns surrounding led growth of large scale neighbourhoods witnessed the adoption Jayanagar, Indiranagar, Bangalore City residential development of the British model – Rajajinagar and across different regions • Integrating urban broader streets with Koramangala of Bangalore especially infrastructure and avenue tress, sidewalks along South and Eastern transportation networks for pedestrians and • The Metropolitan suburban and peripheral by developing a multi- zoning regulations that Planning Board and regions modal public transport segregated residences Town & Country system in order to and workplaces. Towns Planning Act gave • FDI in real estate control sprawl like Richmond Town, institutional framework paved way for entry of Cleveland Town, Frazer Town, Cox Town, for city development international developers Langford Town were and investors developed in this part of • The ODP provided the the development vision for planned growth of the cityBANGALORE: RESIDENTIAL MARKET REPORT 6
  9. 9. Bangalore has 31 industrial hubs across the city. It Under construction and planned infrastructure houses different PSUs and private companies projects will ensure that Bangalore continues to across IT/ITeS, Bio-technology, Engineering, grow at current levels and establishes itself as Aviation, Textile and others sectors. one of the finest world cities.Key IT/ITeS Hubs Over the last 5 years, Bangalore has witnessed substantial Whitefield Electronics City, improvements on the infrastructure front. A few initiatives Hosur Road Outer Ring Road include commissioning of Bangalore International Airport in Bannerghatta Road 2008, Electronics City Elevated Expressway in 2009, Phase 1 of Old Airport Road. NICE corridor in 2009, Tumkur road elevated expressway in 2010 and Reach 1 of Bangalore Metro Rail in 2011.Key Industrial Hubs Bidadi Industrial Area Mysore Road The table below lists on-going and proposed infrastructure Peenya Industrial Area projects (physical) in Bangalore. Completion of these projects Tumkur Road Harohalli will not only enhance connectivity, but will also lead to Kanakapura Road and Others availability of land parcels for development of real estate. Bangalore - Ongoing and Proposed Infrastructure Projects Completion Project Project Details Timeline Signal free Existing stretch of ORR between Hebbal to Silk Board Jn. will be made 2012(E) Outer Ring Road (ORR) signal free with the construction of flyovers and under-passes. Expansion of Terminal 1 to double its capacity. To be increased to over Expansion of Bangalore 17 million passengers a year. December ‘13 International Airport Completion timeline of 18 months. Under-construction six lane elevated expressway connecting Hebbal to Elevated Bellary Yelahanka. The entire stretch between Hebbal and the BIA will be 2014 Expressways Road an 18 lane highway. Phase 1: N-S corridor – connecting Hesaraghatta to Puttenahalli in South and East-West corridor – connecting Byappanahalli to Vijayanagar. Entire Phase 1 Phase 1 Reach 1 of Phase 1 – Byappanhalli to MG Road was operational in in 2015 October 2011. Bangalore Metro Rail Phase II: Extension of Phase 1 lines connecting Whitefield (in the East), JP Nagar (in the South), Kengeri (to the west) and Nelamangala Phase 2 (to the North). Proposed In addition, two new lines, one connecting Nagawara to Gottigere and the other connecting BTM Layout to Bommasandra has been proposed. Project will act as a feeder network to Metro Rail. Four corridors, Mono Rail Proposed covering 60 km. Formal approval for the project is awaited. Proposed PRR is being executed by Bangalore Development Authority Peripheral (BDA) on Public Private Partnership (PPP) basis. The 110 km ring road Proposed Ring Road will circumnavigate the city connecting all major highways and is currently at land acquisition stage. High Speed Rail Link connecting Hebbal to BIA to the east of Bellary Road. High Speed A 5 m corridor has been identified between the carriageway of NH-44 Proposed Rail Link and the service roads for the HSRL. Timelines not yet announced. Bangalore - Mysore The 4 lane expressway of approximately 111 km connecting Bangalore to Proposed Express Way Mysore is currently on hold on account of land acquisition issues.BANGALORE: RESIDENTIAL MARKET REPORT 8
  10. 10. • In recent past, Bangalore witnessed entry of large national and In 2011, Bangalore residential market witnessed international developers namely Pashmina Developers, high activity levels in terms of project launches Peninsula, Pruska, Westcourt Real Estate, Unitech, Essar and and absorption rate; but, in 2012, developers many more. Integrated Funds (development arms of Private need to be cautious with new project launches in Equity Fund) have also acquired land across Bangalore region – Jayanagar, Sarjapur Road, Whitefield and other micro-markets. order to safeguard balance in the market. • Super Luxury projects have been redefined through launches • Bangalore cannot afford to witness same number of project of Embassy Boulevard, RMZ Latitude, Prestige White Meadows, launches this year as that of 2011. If the activity level does not Godrej Platinum and serviced apartments by Westcourt. Prior to drop to half of 2011 then, Bangalore residential market will face 2011, Bangalore never witnessed such high activity levels for over supply situation. products priced over INR 5CR. • Except Budget category (less than INR 25L), product across • Most of the developers such as Prestige, Brigade, TATA, other segments are under pressure with high activity. Even in Puravankara and others are enthusiastic with their experience in Mid category (INR 25L – 50L), developers have launched sizeable Budget category (less than INR 25 L). projects which may take longer time for completion. • In 2011, Bangalore remained one of the favored real estate markets for Private Equity Funds resulting in their sizeable participation in self-liquidating residential asset class. 15% 13% CAGR for the period Average Annual 2008 - 2011 Price Appreciation 232 Projects 20,600 Units ~44,000 Units 55,400 Units Total Absorbtion in 2011 New Project Launches in 2011 Total Availability 20,031 Apartment Units 49,568 Apartment Units 38,663 Apartment Units 5,768 Villa/Row House Units 568 Villa/Row House Units 5,297 Villa & Row House Units 3% - 6% 4% - 7% Average Rental Yield Average Rental Yield Rate for Class A Rate for Class A Apartment Projects Villa Projects9
  11. 11. Till now, the most vibrant residential micro- Bangalores cosmopolitan culture has space for markets were located in SE quadrant; but now different formats in residential developments – micro-markets of NE quadrant are also witnessing Apartment, Villa and Row Houses. Bangalore high residential activity. buyers have shown strong liking for lifestyle amenities, theme based and good quality in• Currently, Bangalores most promising residential micro residential developments.markets are ORR, Sarjapur Road, Whitefield and BangaloreNorth. Bangalore North, like any emerging micro-market during • Bangalore is one of the most promising markets for Villanascent phase is witnessing high activity level. projects in India. However, as per current statistics, the market• Bangalores Central and Off-Central locations have high has an over expectation from this product. Many underpotential but availability of land at reasonable price remains a construction projects may take longer timeline for completion.challenge. However, many sizeable mixed-use developments • Most active micro-markets for Villa & Row Housesalong Old Airport Road, Vivek Nagar and Koramangala are developments are Bangalore North, Sarjapur Road, Whitefieldexpected in next few years on account of relocation of large and Hosur Road.corporate houses and availability of land through slumredevelopment programs. • As per absorption analysis, Bangalores buyers are more sensitive compared to other southern Indian cities towards• Old Madras Road & Mysore Road micro-markets have quality of the project, amenities and unit sizes. In this city, end-untapped potential available for residential developments. Old users are ready to pay reasonable premium across differentMadras Road would gain traction faster due to its strategic categories towards these aspects of the project.location [proximity to IT hubs – Whitefield & ORR, BangaloreInternational Airport and City Center].• Hosur Road is showing signs of oversupply in residentialsegment on account of large developments and maturingeconomic hub in this region.BANGALORE: RESIDENTIAL MARKET REPORT 10
  12. 12. In 2011, Bangalore Residential Market witnessed entry of new products - Villament and Branded Homes. • Villament is a new type of development that is gaining • Westcourt has launched Branded Home - ‘Four Seasons Private prominence in Bangalore. This type of development offers Residences’ located near Mekhri Circle, Bellary Road. This is part people the best of both worlds, the villa lifestyle at affordable of an upcoming mixed-use development named City View. prices. A typical villament has about 4-8 units in each block with Branded homes come with bespoke design features and have an the ground floor enjoying garden space, the center floors array of services including 24-hour concierge, valet parking, in- enjoying balcony space and the upper floors enjoying their own room dining service and many more. In summary, the homes, terrace space. Some of the projects launched on this concept are although owned by individuals, will be maintained by the Habitat Crest (Whitefield), LGCL Luminaire (off Old Airport Road) hospitality brand. These branded private residences promise a and Sattva’s villament project along Sarjapur Road. lifestyle statement in the home segment offering 5-star luxury standards. Bangalore Residential Micro-Markets Bangalore has been divided in following eleven micro-markets based on geography, type of customers, capital values and type of residential development: 1. Central 2. Off-Central 3. ORR (Marathahalli – Silk Board Jn.) and Sarjapur Road 4. Whitefield 5. Old Madras Road 6. Bangalore North (Hebbal, Yelahanka, Thanisandra Road and Hennur Road); ORR (KR Puram to Hebbal) 7. Hosur Road 8. Bannerghatta Road 9. Kanakapura Road 10. Mysore Road 11. Tumkur Road11
  13. 13. RESIDENTIAL MICRO-MARKET ANALYSIS: POTENTIAL V/S ACTIVITYPotential Index has been established on existing and future and Kanakpura Road are in balanced state because potential,scenario for economic hubs, physical infrastructure, social activity level and inventory are proportionate to each other ininfrastructure and availability of land for development; whereas, these micro-markets.Activity Index is gauged through ratio of availability to annual 4. Mysore Road has opportunity for residential sector but itsabsorption rate. future depends on growth of occupancy levels in Global VillageFindings from this analysis are: and Bidadi Industrial Area.1. Hosur Road is on over supply status as the current availability 5. Bannerghatta Road has affinity for new developments butlevel is high and potential of this region is not likely to improve in availability of land parcel is the critical constraint for futureshort term. growth.2. Bangalore North can also fall under over supply status for 6. Central and Off-Central will always have potential forsome duration unless planned economic activities kick-off in this residential development in luxury category but land availabilitylocation in the near future. is the bottle-neck in these micro-markets as well.3. Whitefield, Outer Ring Road, Tumkur Road, Old Madras Road Off Central Mysore Road Whitefield Outer Ring Road Bangalore North Very High Very High Very High Very High Very High High High High High High Moderate Moderate Moderate Moderate Moderate Stable Stable Stable Stable Stable Low Low Low Low Low Very Low Very Low Very Low Very Low Very Low SM ML SM ML SM ML SM ML SM ML P A AV OL P A AV OL P A AV OL P A AV OL P A AV OL 10 OPPORTUNITY BALANCED 9 8 7 Hosur Road Very High 6 High Potential Moderate 5 Stable 4 Low Very Low SM ML P A AV OL 3 2 1 BALANCED OVER SUPPLY 0 0.00 1.00 2.00 3.00 4.00 5.00 6.00 Activity Central Bannerghatta Road Old Madras Road Kanakapura Road Tumkur Road Very High Very High Very High Very High Very High High High High High High Moderate Moderate Moderate Moderate Moderate Stable Stable Stable Stable Stable Low Low Low Low Low Very Low Very Low Very Low Very Low Very Low SM ML SM ML SM ML SM ML SM ML P A AV OL P A AV OL P A AV OL P A AV OL P A AV OL LEGEND P: Potential A: Activity AV: Availability OL: Outlook SM: Short to Medium Term ML: Medium to Long TermBANGALORE: RESIDENTIAL MARKET REPORT 12
  14. 14. CONSUMER PREFERENCE SURVEY End-user survey was conducted at CREDAI Bengaluru Realty Expo 2011 during 17th and 18th September 2011. Over 1,200 responses were collected [51% - IT/ITeS employed professionals, 13% self- employed & entrepreneurs and 36% included employees working in other sectors]. Key findings include: • Strong preference for apartment units: Overall, 52% respondents preferred an apartment unit. • High preference for Bangalore North, Whitefield, ORR and Old Madras Road locations: 50% of the total respondents preferred Bangalore North, Whitefield & Old Madras Road and 25% of the total respondents preferred ORR and Sarjapur Road. Most preferred locations include Hebbal, Thanisandra Main Road, Sarjapur Road, Hennur Main Road, Whitefield and Old Madras Road mainly owing to proximity to IT hubs including Whitefield, Electronics City and ORR. • 71% of the total respondents intended to invest in a residential unit for self-use as compared to 29% for investment purpose. • Respondents preferred products in the price range of 25L – 50L and 50L – 1CR budget and in terms of unit sizes, 2 BHK, 2 BHK+ Study and 3 BHK were the most preferred. 27% 52% 21% Apartments Villas Residential Plots 60% 40% 20% 0% South North North South Central West West East East Off Central 13% 4% 40% 43% < 25L 25L - 50L 50L - 1CR > 1CR13
  15. 15. BANGALORE CITY : RESIDENTIAL MICRO-MARKETS NH 7 To Hyderabad N Bangalore International Airport Doddaballapur k Lin Industrial Area ail dR ee Rajanukunte Sp igh dH ose p Pro Ro a d BANGALORE NORTH ng Ri al Baglur h er ip er Yelahanka P ed os op Pr Pr op os Hoskote Industrial ed Pe Area rip h er al Rin NH 4 : To M TUMKUR ROAD Jalahalli Sahakara Nagar Thannisandra gR oa umbai d Budigere HMT Township Manyata Embassy Business Park OLD MADRAS 4 nai BIEC H n Hesaraghatta Cross Hebbal Hennur ROAD N To Che Avalahalli HBR Layout NICE Rid Roa Nagawara Peenya Industrial Ou t ng IISc er R Seegehalli Area in g Ro ad od d a RMV Extension ITI gR Banaswadi Rin Palace Krishnarajapuram Malleshwaram ter Grounds Ou Rajaji Nagar Frazer Town Whitefield To Ma Byappanahalli gadi MG Road ITPB Bangalore City C.V. Raman Nagar Railway Station CDB Indira Nagar WHITEFIELD Bagmane Richmond Town Jeevan Bhima Brookefield MYSORE ROAD Vijaya Nagar Nagar Tech Park Marathahalli Varathur Mysore Road OFF-CENTRAL Jaya Nagar Cessna P oposed Peripheral r Koramangala Business Park Ring Road Banashankari Bellandur SH 17: To Magadi J.P. Nagar HSR Layout Kengeri Puttenahalli B.T.M. Layout Wipro IIMB Hosa Road NI Begur C ER Haralur in Jagaranahalli Arkere Kumbalgodu gR oa OUTER RING ROAD Industrial Area d Kothnur Kudlu Dommasandra Thalagattapura Gottigere BMIC Expressway NICE Ring Road KANAKAPURA ROAD BANNERGHATTA ROAD Electronic City Bommasandra Bommasandra & Jigani Prop Industrial Area os ed Pe riphe ral Ring Roa d HOSUR ROAD NH 209: NH 7: To Coimbatore To Salem Metro Rail Operational Proposed Mono Rail LEGEND Metro Rail Phase 1 Under Construction Proposed High Speed Rail Link Proposed Metro Rail Phase 2 Proposed Peripheral Ring RoadBANGALORE: RESIDENTIAL MARKET REPORT 14
  16. 16. CENTRAL15
  17. 17. This micro-market is set to witness development of Micro-Market Fact File luxury residential projects. Limited availability of Key Locations land for development is the only deterrent for this micro-market. MG Road, Kasturba Road, Brunton Road, Lavelle Road, Richmond Road, Residency Road, Frazer Town, Cox Town and Hanes Road• The micro-market has colonies/towns existing since British Key Economic Magnetsperiod. Therefore, this region predominantly comprises of old Central Business District (CBD) and Secondary Businessresidential developments mainly villas and individual District (SBD)bungalows. Today it is a preferred location by HNIs and NRIs. Key Retail Locations• Due to lack of availability of large land parcels and high capitalvalues, this quadrant witnessed limited fresh residential supply;most of the upcoming residential projects are small scaled MG Road, Brigade Road and Commercial Streetluxury apartment developments. Malls: Operational, UC & Planned (In million sqft)• Key under construction projects include Prestige Edwardian,Brigade Sonata, Total Environments Van Goghs Garden, Skyline Garuda Mall (0.3), Sigma Mall (0.12), Victoria Embassy (0.16),Villa Maria, HM Grandeur and Vaishnavi Prime. UB City (0.13), 1 MG Road (0.18), Embassy Galaxy Mall (0.19)• Key developments planned in this zone include Prestige Key Educational InstitutesKingfisher Tower, Century Renata, Nitesh Park Avenue, EmbassyOasis and others. University of Vishweshwaraiah College of Engineering (UVCE), Mount Carmel College, St. Josephs College• Size of typical development ranges between 30,000 sqft to80,000 sqft; residential units are sized between 2,000 – 3,500 Health Care Facilitiessqft (Class A); 1200 - 2600 sqft (Class B). Hospital for Orthopaedics, Sports Medicine, Arthritis & Trauma (HOSMAT), Mallya Hospital, Fortis Hospital, Seventh Day• This micro-market will continue to perform good owing to Adventists Hospital, Lakeside Hospitallimited supply and high demand. The capital values are expectedto appreciate at 12% – 15% per annum. In future, theredevelopment of old properties is likely to gain traction on 135 Units 138 Unitsaccount of availability of higher Floor Space Index (FSI) and rising Average Annual Totalcapital rate. Absorption Availability INR 7,500 - 25,000 INR 6,000 - 14,000 per sqft per sqft Apartments Capital Values for Capital Values for Super Class A Apartment Class B Apartment Particulars Premium Luxury Luxury Sub-Total Total Projects Projects 50L-1Cr 1Cr-3Cr 3Cr-5Cr >5Cr Availability* 0 22 29 87 138 138 15% 4% - 7% Average Annual Average Rental Total Supply** 18 53 91 127 289 289 Price Appreciation Yield Rate* Includes unsold stock of completed, under-construction and planned projects available with the developer.** Supply from under-construction and planned projects (Planned projects include developments at pre-launch phase)BANGALORE: RESIDENTIAL MARKET REPORT 16
  18. 18. OFF-CENTRAL17
  19. 19. This is one of the most desired micro-market by Micro-Market Fact File end-users, institutional investors and Key Locations developers. In next 3 to 5 years, this micro- market is likely to witness development of Indiranagar, Koramangala, Jayanagar, JP Nagar, Malleshwaram, RMV Extension, Sanjay Nagar, RT Nagar, Pottery Road, Rajajinagar mixed-use projects in luxury category. Key Economic Magnets• This micro-market comprises of sub markets located around Koramangala, Malleshwaram, Indiranagar, Jayanagarthe city center. This location also has high demand but qualityspace supply is limited. Key Retail Locations• It has access to high quality social infrastructure and improved Indiranagar (100 & 80 Feet Road), CMH Road, Koramangalaurban infrastructure. (100 & 80 Feet Road), Jayanagar (4th & 9th Block), Malleshwaram• Residential developments in this zone are marked by spacious (Sampige Road & Margosa Road), New BEL Road, JP Nagar (ORR)units with one unit in each floor or duplex; concept based Malls: Operational, UC & Planned (In million sqft)development and world-class amenities. Mantri Square (1.7), Total Mall (0.22), Mantri Junction (0.28),• ‘Four Seasons Private Residences’ would be Bangalore’s first Sigma Mall (0.25), Salarpuria Oasis Mall (0.55), The Forum (0.65), Brigade Orion Mall (1.1), Nitesh Mall (1.2), G Corp Mall (0.3)branded home. This is part of an upcoming mixed-usedevelopment named City View by an international player – Key Educational InstitutesWestcourt, located near Mekhri Circle, Bellary Road. Christ University, MES College of Arts Commerce & Science,• This micro-market will witness many more mixed-use BMS Institute of Technology, KIMS, BITdevelopments in coming years. As per market information, large Health Care Facilitiessized land parcels in Old Airport Road, Vivek Nagar andKoramangala are in planning stage for mixed-use developments Columbia Asia Hospital, St. Johns Medical Hospital, Nimhansin luxury category. Hospital, Fortis Hospital, MS Ramaiah Memorial Hospital, ESI Hospital• In recent past this micro-market has witnessed large scaleddevelopments including Brigade Gateway, L&T South City, ElitaPromenade and others.• Prominent under construction residential developments 1,500 Units 1,372 Unitsinclude Pride Picassa, K. Raheja’s Vivarea Brigade Crescent, ETA Average Annual Absorption Total AvailabilityBeau Monde, LGCL Luminaire, Pride Pavillion, Sobha DewFlower, Purva Atria, Four Season Residences, Vaishnavi Terracesand others. INR 4,000 - 18,000 INR 8,500 - 10,000 INR 3,500 - 8,000 per sqft per sqft per sqft• Key planned projects: Divyasree 77° East, Embassy Grove, Jain Capital Values for Capital Values for Capital Values forHeights – East Parade and others. National developers & Class A Apartment Class A Villa Class B Apartment Projects Projects Projectsintegrated funds including V Raheja, Phenoix Market City,Peninsula, Azure Capital and others have plans to launch theirprojects in this micro-market in 2012. 17% 4% - 7% Average Annual Average Rental• Availability of matured social infrastructure and limited quality Price Appreciation Yield Ratespace supply are the key reasons for good performance of thismicro-market; during next 3 years, this region is expected towitness capital appreciation of 15% - 18% per annum. Apartments Villas Particulars Budget Mid-Range Premium Luxury Sub-Total Premium Luxury Super Luxury Sub-Total Total < 25L 25L-50L 50L-1Cr > 1Cr 50L-1Cr 1Cr-3Cr 3Cr-5Cr > 5Cr Availability* 518 695 23 0 1,236 0 0 32 104 136 1,372 Total Supply** 1,101 1,094 80 13 2,288 0 0 72 0 72 2,360 * Includes unsold stock of completed, under-construction and planned projects available with the developer. ** Supply from under-construction and planned projects (Planned projects include developments at pre-launch phase)BANGALORE: RESIDENTIAL MARKET REPORT 18
  20. 20. ORR [Marathahalli Jn - Silk Board Jn] & Sarjapur Rd19
  21. 21. • Major upcoming developments include Assetz Homes’ Loft, Currently, ORR is the most active IT hub of India. Assetz Homes’ Clover Greens and others This is driving residential demand in this micro- • Currently, this micro-market is in stable status; prices are likely market. In addition on-going physical & social to appreciate at 12% -14% per annum. infrastructure developments are supporting the demand environment. This micro-market is likely Micro-Market Fact File to remain strong for at least next 3 to 5 years. Key Locations HSR Layout, ORR (Marathahalli Jn. - Silk Board Jn.), Sarjapur Road,• This micro-market can be subdivided into 3 sub-markets: Haralur Main Road, Hosa Road, Kasavanahalli Main Road- ORR (Silk Board Jn. – Bellandur Jn.), Key Economic Magnets- ORR (Bellandur Jn. to Marathahalli Jn.) ORR IT Hub, Whitefield IT Hub, Electronics City IT Hub, Hosur Road- Sarjapur Rd (ORR Bellandur Jn. to Sarjapur Village).• Key residential development along ORR (Silk Board Jn. – Key Retail LocationsBellandur Jn.) is BDA promoted HSR Layout. In HSR layout fewprivate developers have apartment projects. Whereas, ORR ORR (Marathahalli Jn. - Silk Board Jn.), Sarjapur Main Road, HSR Layout(Bellandur Jn. to Marathahalli Jn.) and Sarjapur Rd (ORRBellandur Jn. to Sarjapur Village) are dominated by private Malls: Operational, UC & Planned (In million sqft)developers’ projects housing mainly IT population working inORR, Electronics City and Whitefield. Soul Space Arena (0.48), Soul Space Spirit (0.45), Total Mall (0.24)• There are many international schools/education institutionslocated Off Sarjapur Road. However, other social infrastructure Key Educational Institutesis just adequate; but completion of under construction retail &entertainment developments will improve this aspect in coming New Horizon College of Engineering, Inventure Academy, Amrita School of Engineeringyears. Also, completion of ongoing fly-overs along ORR will easeaccessibility. Health Care Facilities• Urban infrastructure is good in HSR Layout but many parts of VIMS Hospital, Greenview Medical Center, Sri Sai Multi specialityother sub-markets of this region do not have quality roads, Hospital, Lakeview Hospital, Greenview Medical Centre,footpaths, street lights and other basic urban infrastructure. Star Hospital & Research Centre• Currently, outside BDA promoted layouts, municipal waterconnections are not available and population is dependent on 2,100 Units 7,709 Unitsbore wells for water. The water table is depleting at alarming rate Average Annual Total Absorption Availabilityin this micro-market on account of high residential activity.• This micro-market has witnessed residential developmentacross different segments and pricing points. INR 2,000 - 8,800 INR 2,000 - 7,500 INR 2,000 - 3,500 per sqft per sqft per sqft Capital Values for Capital Values for Capital Values for• Prominent residential developments which are under Class A Apartment Class A Villa Class B Apartment Projects Projects Projectsconstruction include Assetz Homes’ 27 Park Avenue, NiteshCape Cod, Prestige Sunnyside, Vaswani Reserve, SobhaCinnamon, Purva Skywood, Mantri Espana, Adarsh PalmRetreat, Embassy Pristine and others. 13% 3% - 6% Average Annual Average Rental Price Appreciation Yield Rate Apartments Villas Particulars Budget Mid-Range Premium Luxury Sub-Total Premium Luxury Super Luxury Sub-Total Total < 25L 25L-50L 50L-1Cr > 1Cr 50L-1Cr 1Cr-3Cr 3Cr-5Cr > 5Cr Availability* 1,067 1,895 2,721 740 6,423 899 262 125 0 1,286 7,709 Total Supply** 1,817 4,515 6,410 1,989 14,731 1,621 346 167 0 2,134 16,865 * Includes unsold stock of completed, under-construction and planned projects available with the developer. ** Supply from under-construction and planned projects (Planned projects include developments at pre-launch phase)BANGALORE: RESIDENTIAL MARKET REPORT 20
  22. 22. WHITEFIELD21