IT hub of India - Bangalore Real Estate Update 2013 by Mr. Sanjay Chugh, JLL India

Bangalore has been the fastest - growing city of India since the past few decades. IT has been the major growth driver & is responsible for aggressive real estate development in the Bangalore city.

IT hub of India..

Being the IT hub of India, Bangalore has a multi-cultural population with good social infrastructure, excellent educational institutes & constantly upgrading physical infrastructure.

Currently, the most promising residential micro-markets are Outer Ring Road (ORR), Sarjapur Road, Whitefield & North Bangalore.

Luxury Residential..

Bangalore is the 3rd largest hub for High Net worth Individuals (HNIs). It is estimated to be home to more than 10,000 individual dollar millionaires. Bangalore has a large base of expatriates who live and work in the city.

Mr. Sanjay Chugh, JLL India

The Bangalore residents are well travelled, cultured & have sophisticated tastes. There has been increased demand for high-end residential apartments in the city, particularly in the Central Business District (CBD), Secondary Business District (SBD), Whitefield, North Bangalore and Outer Ring Road sub-markets.

We expect consumer demand for high-end residential projects in these sub-markets to be steady over the short term.

Bangalore is one of the most promising markets for villa projects in India. Villa and row house developments are most active in the North Bangalore, ORR, Sarjapur Road and Whitefield micro-markets. High-end residential property buyers in Bangalore are very sensitive in terms of amenities, product quality and unit sizes.

Mid - Income Housing...

This segment is mainly driven by individuals working in the IT &  ITES industry. The main driving factors for this segment are social infrastructure, proximity to workplaces, good physical infrastructure & access to medical and educational facilities.

Because of these reasons, micro-markets such as Whitefield, the ORR IT corridor, Electronic City and few areas in North Bangalore have witnessed a steady demand from the mid-income segment.

Affordable Housing Concept..

The demand from this segment comes from extremely price sensitive buyers - therefore, affordable projects are developed in the suburbs as these areas offer large land parcels at lower acquisition costs.

Areas like Mysore road, Hosur road, Kanakapura road etc.. have witnessed high demand for this segment.

The affordable housing concept has gained ground in Bangalore City, mainly due to a few graded developers such as Purvankara, Brigade Group, Shriram Properties, Golden Gate Properties, Ozone Group and Nitesh Estate who are focusing their projects for customer segment.

In most cases, the housing units are made affordable by reduced unit sizes, compromising on civic amenities and other USPs which were typically provided as differentiators to the competing projects in the micro-market / city.

Demand on the Outskirts of Bangalore..

Affordable housing has seen constant demand on the outskirts of Bangalore, in all directions. Availability of large land parcels at lower price points has encouraged these developments.

Also, the planned Metro Rail & Peripheral Ring Road have increased the demand on the outskirts of Bangalore. VBHC Attibele and Patel Neo Town in the South Bangalore, Provident Welworth & Sovereign Lakefront in North Bangalore, and Provident Sunworth and VBHC Kengeri in West Bangalore are some of the affordable housing projects in the city.

The demand for affordable housing in East Bangalore is lower when compared to Bangalore’s other micro-markets.

With increased demand, ‘affordable’ housing projects have witnessed an increase in the capital prices & are now priced higher than or /  similar to mid-income segment projects. These projects have also seen substantial rise in capital values because of increased cost of land acquisition and construction.

Developers / builders have therefore resorted to redesigning their projects to address the demand of a wider target segment looking at the budget homes category. Major national level players & local developers have plans to enter the affordable housing segment of Bangalore. These include Tata Housing, Usha Breco Realty, Godrej Properties, Ashoka Group, Jannaadhar Construction, CSC Builders, Brigade Group, etc...

About the author..

Mr. Sanjay Chugh  is Head (Residential Services -Bangalore & Chennai) at Jones Lang LaSalle India

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