IT sector drives demand for property

IT sector drives demand for property
Poornima B V
outlines some factors that are playing a significant role in the increase in demand for property in localities here


Bangalore South and East have always been the city's IT hubs. In Bangalore South, the residential expanse spreads across Koramangala, Hosur Road, Bannerghatta Road Sarjapur Road, Outer Ring Road, HSR Layout, Jayanagar, J P Nagar, Banashankari, Kanakapura Road and neighbouring locations. According to Knight Frank Research, the average capital value in these locations ranges from Rs 3,000 to Rs 6,000 per sqft.
There is a high concentration of residential projects along the Sarjapur-Outer Ring Road due to its proximity to the IT corridor. Huge integrated township projects have been lined up by major developers along the Outer Ring Road. In anticipation of the upcoming Knowledge City and the Bangalore-Mysore Infrastructure Corridor Project, prominent developers have positioned their projects along the Kanakpura Road, Hosur Road and Bannerghatta Road.
Residential options
The peripheral regions of Whitefield, Kanakapura Road, Bannerghatta Road and Outer Ring Road have been the major contributors to the Bangalore residential supply through the year. The development of the Outer Ring Road (ORR) has contributed substantially to the connectivity of the peripheral locations with the other business and residential hubs of Bangalore. This has been mainly due to the fact that large parcels of land have been available here. Moreover, the development of an IT corridor from the East to the South along the Outer Ring Road, Bannerghatta Road and Hosur Road has led to a huge supply of IT parks, SEZs and campus style developments in these locations, according to Cushman and Wakefield Research.
The real estate sector in the city is on a constant growth curve in the peripheral and suburban regions. It is estimated that the city will have a residential supply of approximately 6.4 million sqft by 2009-10.
Commercial options
Bannerghatta Road, Hosur Road, Sarjapur Road - Outer Ring Road, and Kanakapura Road are some hotspots as far as demand for commercial space is concerned. On Bannerghatta Road, rentals are Rs 50-60 per sqft per month, according to Knight Frank Research. The growing demand for residential accommodation along Kanakapura Road has triggered demand for retail space too. Large retail units are sprouting here on a regular basis.
In anticipation of the Bangalore-Mysore Infrastructure Corridor project, Knowledge City and increased connectivity, there is growing demand for office spaces. The upcoming elevated road to Hosur Road will lead to an increased demand in surrounding locations following better connectivity.
The demand for commercial office space in Bangalore has increased to 14.54 million sqft since last year due to the continuing demand for Grade A development. The peripheral locations of Whitefield and Outer Ring Road (Sarjapur - Marathahalli stretch), Hebbal quadrant and the southern peripheries of Hosur Road and Electronics City found high demand.
Retail options
The rapid growth in the city has led to emergence of new retail pockets. The rentals have nearly doubled across these locations during 2007. Established high streets like 11th Main, Jayanagar 4th Block have witnessed increase in demand.
The massive increase in property prices, the expansion of the city, and the development of Special Economic Zones and industrial townships has led to a spurt in property development and availability of office space in peripheral locations as large corporates prefer their own campuses even if it happens to be outside the city centres.
Outlook
The development of the Peripheral Ring Road and the plan to set up five satellite townships with the concept of 'walk-to-work' has also provided a huge impetus in the peripheral areas. There are also plans to set up a hi-tech corridor consisting of integrated townships between Magadi Road and Mysore Road.
Added to this, the revised master plan has given a new dimension to the real estate sector with an increase in the FAR (floor area ratio), thereby further impacting the real estate market. All this is bound to have a positive impact on the real estate prospects in Bangalore South, which is a major IT hub in the city.