Leasing drives property market in Bangalore

Leasing drives property market in Bangalore

The Hindu

BANGALORE, FEB. 11. During 2004, 7 million sq ft of commercial space was absorbed by corporates in the city, up by 48 per cent over 2003.

The leasing of commercial property in the city increased by 47 per cent.

Corroborating this trend, international property management consultancy Cushman and Wakefield said this manifests Bangalore's attraction as a preferred location for companies.

The reported plans of the IT and IT-enabled services to relocate in other cities have not yet been significant enough to adversely affect the property market here. Most corporates are still only exploring the possibilities of relocation to other cities. Relocation plans, if any, are mostly confined to companies that have been successful in the Tier 1 cities and are trying for more efficiency in their value chain.

Outlook

The outlook for 2005 is that the strong leasing activity in the commercial property segment may continue. The overall performance of the economy supports corporate expansion and growth, market observers say. The rental and capital values across all micro market are expected to see growth of 3 to 5 per cent with sustained demand. Apart from the technology sector, demand from the pharma and biotech sectors for research and development facilities is expected to increase, though the IT sector is likely to be the key demand driver.

Retail activity

An interesting aspect of the commercial property scene in Bangalore has been acceleration in retail activity, spurred by bigger pay cheques and spending levels. The Forum Mall in Koramangala, with the largest multiplex of 11 screens in the city, has 350,000 sq ft occupied by major international domestic brands. Developers such as Prestige, Mantri and Brigade are building malls in locations such as Rajajinagar and Malleswaram where big stores did not venture earlier. Mantri is developing a mall of 180,000 sq.ft. Prestige is developing a mall at Whitefield to cater to factory outlets.

Govt. initiatives

The property market is feeling buoyant about some initiatives of the State Government. The Bangalore Development Authority will soon allot sites at Arkavathi Layout, which is expected to boost development in the north of the city.

The Hebbal Flyover and the widened National Highway 7 will add to this development.

Projects

Among the campus developments in recent weeks has been investment banking and financial services major JP Morgan setting up a 150,000 sq.ft facility at Prestige Tech Park. Global software major Oracle has taken up 16 acres at the same location. Electronics and software major Phillips is building a 250,000 sq.ft facility and Hewlett Packard is in the process of finalising plans to consolidate into one campus, occupying 600,000 sq.ft. The U.S.-based Symphony Services has taken up four acres for its campus.