The Bangalore real estate market is witnessing stable rentals across all micro markets for the last few months and it is expected that the supply situation for this current demand will continue.
According to a snapshot survey by real estate consultants Cushman & Wakefield for July, IT and IT-enabled services will continue to drive this demand until other sectors such as banking and finance and telecom gain momentum.
However, the outlook for real estate prices indicates that the market is stagnant and is likely to weaken. These include the Central Business District (M G Road), off-CBD, suburban and peripheral Bangalore.
While real estate prices per month in CBD, off-CBD and suburban Bangalore, is about Rs 43 per sq ft, Rs 37 per sq ft and Rs 30 per sq ft, respectively, it is interesting to note that the suburban Bangalore continues to be a prime hot spot for new companies as well as for those wanting to expand.
The average price per month in this locality is Rs 50 per sq ft. Peripheral Bangalore includes the second phase of International Technology Park Ltd. Being a newly developed locality and owing to the popularity of ITPL phase 1, this locality is in for a major real estate boom with regards to commercial properties.
In comparison with prices during December 2002, off-CBD and peripheral Bangalore have not remained stagnant, while real estate prices in CBD and suburban Bangalore have gone down by 4.4 per cent and 6.3 per cent.
Key leasing transactions for the month of July include Velankani Software Park in Electronic City where Accenture has leased approximately 40,000 sq ft of office space and Dell Computers leasing about 500,000 sq ft of office space in Divyasree Greens, Indiranagar, in the vicinity of the Koramangla Ring Road.
Paragon Solutions has leased nearly 12,000 sq ft of office space at HM Towers on Brigade Road (CBD) .
At the Discoverer Building in the International Tech Park, Infineon Technologies has leased 19,500 sq ft, while Mysys Ltd has leased nearly 25,000 sq ft in the Innovator Building. There were no significant investment transactions during the month of July.
A market summary on well-established companies in July has also indicated that robust expansion plans in SAP Labs India, Wockhardt, Yahoo Inc., HP and Huawei Technologies are on the cards.
SAP Labs is investing euros 20 million for building a new world-class campus at Whitefield, with a built up area of 250,000 sq ft.
Heartcare major Wockhardt is establishing a specialty hospital across three acres of land on Bannerghatta Road. This hospital will be built in two phases and is expected to be commissioned within the next 24 months.
Global internet firm Yahoo Inc. is also planning to set up its first off shore R&D centre in Bangalore. This centre will focus on technology and product innovation and will house 150 engineers by the end of next year.
Meanwhile, in a bid to consolidate al its facilities and looking at its future growth requirements, HP India Software Organisation is planning to set up a campus in Bangalore will soon be finalising a location.
Huawei Technologies, China's largest communication hardware company is looking at setting up a 40-50 acre campus at the IT corridor in Bangalore in order to scale up its research and development activities in India.