Steady Bangalore market witnesses interesting trends

Bangalore witnessed a steady growth in the past one year in its residential market in terms of
demand as well as capital values. The growth has been healthy averaging around 30 percent
across the city. While larger valued properties priced around Rs 2 crore have not been selling as
fast as being promoted, the large mid-segment, comprising mostly of 2 BHKs and 3 BHKs have
recorded a steady growth.
In the past one year Bangalore has witnessed maximum number of launches by all the big
builders in the high-rise apartment segment. Most of these launches have been around Hebbal,
Tanisandra, Jalahalli, Sarjapur Road, Marathalli, Bellandur, Outer Ring Road and Whitefield
areas. As expected, most of the builders have launched primarily mid-segment oriented projects
around Rs 40 70 lakh budget. As Bangalore is an all out end-user driven market, the industry
players have done reasonably well in the Rs 40-70 lakh 2BHK category and the Rs 60-75 lakh
3BHK segment.
Although the market recorded some correction in KR Puram, Hosur Road-Silk Board area by
around 2 per cent, the rest of the Bangalore market held steady.
Many new township projects are coming up especially in North Bangalore, which add to more
supply in these areas, as connectivity via roads and Metro is expected to improve in the coming
years. Developments around the new Airport Road tend to create a new suburban area in North
Bangalore, especially towards Bellary Road and Tumkur Road.
In South Bangalore, the area between Bannerghatta Road and Kannakpura Road has recorded
impressive growth. Going forward, the areas towards, or on Mysore Road are expected to
witness a spurt in growth.
The major reasons for the demand in property on lease or outright purchase is due to the close
proximity of IT hubs near Marathalli, Sarjapur Road, JP Nagar and Koramangala and lots of new
commercial establishments springing up in Indranagar and Malleshwaram localities. The
upcoming Metro and the international airport area witnessing the presence of corporate houses in
and around Manyata Tech Park, are further contributors.
Developers also attribute other reasons for this growth. Capital values have remained constant
in Koramangala, Bannerghatta Road and CBD areas due to heavy congestion of traffic in these
localities. This has resulted in the growth of outskirts, says Umang Badjatya, GM-South, Kumar
Properties. With regards to rentals, Hebbal and KR Puram localities have witnessed an increase
in availability of apartments on lease at lower rental values this has resulted in less rental yields
across this belt.

The 1BHK or studio apartment market still remains dull in Bangalore. While the 700-800 sq ft
1BHK is still facing resistance, studio apartments of around 300 sq ft are doing reasonably well.
The slightly larger studio apartments market in the above 700 sq ft range however has witnessed
a lull.
Areas close to IT hubs and industrial areas have recorded more demand for 2 BHKs. These
include localities close to IT parks near Hebbal, Sarjpur Road, Maratahalli, Bellundur and
Industrial belts like Yeshwantpur, Peenya and Mysore Road, with several new projects launched
in 2012.
As compared to this, 3 and 4 BHK residences have seen a good momentum in areas close to
places like Hebbal, Malleshwaram, JP Nagar and Brookfields areas, due to upcoming road
infrastructure and Metro connectivity. A number of top builders have launched high-end and
high-rises projects here.
Only about 2 to 3 per cent of the entire Bangalore market is investor driven. There may be
several end-users who buy more than two apartments; some even buy 4-5 apartments spread
across Bangalore. Although they are buying it as investment they cannot be really classified as
the traditional investor community, states Balakrishna Hegde, MD, Chartered Housing (P) Ltd.
They are merely aiming at more capital or rental yields in the future.
In the last one year, the city has witnessed a change in the size of apartments. Builders today are
open to constructing 2 BHKs starting from 800 sq ft to 1,200 sq ft, and 3 BHKs ranging from
around 1400 to 1600 sq ft. This is a new format for Bangalore as primarily the customers
preferred to have 2 BHKs above a minimum of 1,000 sq ft areas, and 3 BHKs starting at around
1,600 sq ft.
This is a relatively new trend, concentrated in places where there are more cosmopolitan
population, like large sections of HBR layout, Madiwala and areas closer to Electronic City,
observes Krishna Bhat, MD, Srujana Architects and Developers.
The other trend that has been observed is the development of more space efficient designs. The
concept of 1 BHK + study and 2 BHK + study with improved space management and efficient
designs within budget is the latest format which you would see in next couple of years to come,
states Badjatya. This transformation has come up in Bangalore as the end user is looking
increasingly at Rs 40 - 60 lakh budget apartments.
Membership in associations like CREDAI has an encouraging effect on prospective buyers. The
customer is more comfortable with large and established players. Most of them are CREDAI or
other association members, and they do not violate building norms. Ensuring the end-user has
greater peace and guarantee of quality, states Narain.

The Bangalore real estate market has performed well in the last two quarters as compared to
other Metros like Delhi, Mumbai and Chennai. This momentum is expected to continue for two
more quarters at least, till mid 2013.
We expect the market to grow further in 2013, forecasts Bhat. At the current rate of
development one can expect about 15 to 20 per cent growth in the first half of 2013 at the least.
Government policy of providing continuing sops to SEZs and other technology parks, and other
infrastructure development projects coming up towards Dodabellapur, Tumkur Road and Mysore
Road are expected to provide further impetus to this sector.