Bangalore real estate and commercial properties agressive growth

Aggressive growth is forecast for the Bangalore commercial and retail real estate by real estate services firm Jones Lang LaSalle (JLL). New supply will prevent the market from overheating.

The retail market in Bangalore has been equally active. The city witnessed the launch of hyper marts by retailers such as Pantaloon, Food World and Spencer’s. Upcoming malls are expected to witness preleasing activity on account of increased occupier demand. Recent transactions indicate that highstreet shops will continue to command high occupier-interest in the medium term.

Acoording to JLL, the Bangalore commercial real estate market is increasingly seeing land acquisitions by the IT/ITES industry. Corporations such as Hewlett Packard, Siemens, Tata Consultancy Services, Synergy Systems and Bharti Televentures are setting up owned facilities rather than opting for leased spaces in Bangalore. This indicates their long-term interest in Bangalore as the preferred location.

The pre-leasing activity has been quite buoyant in Bangalore since 1Q06, evidenced by Grade A stock in SBD registering vacancy levels of 0% for the first time in 3Q06.

16 IT/ITES SEZS to come up in Bangalore. The state of Karnataka has received the highest number of approvals for IT/ITES SEZs compared to any other state in the country. The total approved land area is 1,210 ha or 130.3 million sq ft spread over 22 SEZs.

Out of these 22 IT/ITES SEZs, 16 SEZs will be developed in Bangalore and it’s suburbs, with a total land area of 803 ha or 86 million sq ft. These include SEZs by leading corporations and developers such as the following:

WIPRO Limited at Sarjapur with a land area of 6 ha WIPRO Limited at Electronic City with a land area of 5 ha

HCL Technopark Limited with a land area of 11 ha

Vikas Telecom Limited with a land area of 36 ha

Golden Gate Developers Private Limited with a land area of 26 ha

Tanglin Developments Limited with a land area of 27 ha

Cessna Garden Developers Private Limited with a land area of 19 ha

Shyamaraju and Company Private Limited with a land area of 30 ha

Given that the buoyant demand for Grade A commercial space in Bangalore is primarily by the IT/ITES sector, JLL expects that this new supply will not only meet the demand in the longer term but also prevent the market from over heating thus resulting in its stability. The SEZs would allow the construction of better quality buildings at lower costs.

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