Bengaluru emerges new realty destination

Bengaluru seems to be edging Mumbai and Delhi out when it comes to real estate launches. Whether it is commercial or real estate, developers are betting on Bengaluru for its high absorption rate.

Among the developers who have entered the city recently is Shapoorji Pallonji Real Estate. Godrej Properties and Mahindra Lifespaces are among those who have renewed their commitment to the Bengaluru residential markets.

Kekoo Colah, CEO, Shapoorji Pallonji Real Estate said, “With a stable and growing residential market, and improved infrastructure, Bengaluru is poised for sustained growth.”

Mahindra Lifespace Developers Ltd, which forayed into the Bengaluru market in June this year, too bets on the potential for real estate.

Windchimes is one of the projects in the portfolio of Mahindra Homes Pvt Ltd (MHPL), a JV between Mahindra Lifespace Developers Ltd and SCM Real Estate (Singapore) Pvt Ltd (SCM), an investment arm of Standard Chartered Bank. Both MLDL and SCM hold an equal stake in the JV.

Emerging Trends in Real Estate Asia Pacific 2016 report, jointly published by the Urban Land Institute and PricewaterhouseCoopers (PwC), ranked Bengaluru, Mumbai and New Delhi at 12th, 13th and 16th positions for investment prospects and at 15th, 13th and 11th positions for development prospects respectively, in the list of the 22 markets covered in the report.

While there has been a marginal drop in rankings of Mumbai and New Delhi from an investment prospects perspective, Bengaluru has shown a remarkable improvement as it has moved up five notches over its last year’s ranking (17th).

The report attributes the surge in Bengaluru’s rankings to its technology industry and the availability of a large pool of skilled labour necessary to ramp up the venture capital backed startups.

Abhishek Goenka, Partner, PwC India, said the story in Bengaluru is, however, different from that in Mumbai and Delhi. In Bengaluru, the large number of upcoming commercial office inventory is not perceived to be a cause for concern as it is expected to be matched by an equally high absorption rate.

Property consultants Jones Lang LaSalle’s in its latest Asia-Pacific City Investment Intensity Index ranks the southern city among the top-20 destinations globally.

At the 20th position, it is well above New Delhi (34th) and Mumbai (42nd). JLL had earlier this year listed Bengaluru among the top-20 technology-rich cities globally.

The report says that nearly 13 per cent of over $6.7 billion (₹44,450 crore) that PEs have invested in India's property market from 2013 through the first half of 2015 has gone to Bengaluru.

Leased office assets such as IT parks and IT-SEZs attracted significant interest from foreign investors as they continue to ramp up their portfolio of office space.

PropEquity too has found that the southern Indian city is now the country’s leading real estate destination, beating Mumbai, Pune, Thane, Noida and Chennai, which were ahead of it six years ago.

The lists are based on PropEquity’s study of the cost, sale and delivery of 21,000 projects across 14 cities.

PropEquity points that in 2014 alone, Bengaluru saw 50 per cent more completed projects, compared to 2013. And with almost 500 new projects in 2014, Bengaluru accounted for 20 per cent of the total number of new projects launched in India’s top 14 cities.

Another property consultant Knight Frank say that Bengaluru’s residential market has remained resilient despite a slowdown in the country’s overall economic scenario.

Samantak Das, Chief Economist and National Director, Knight Frank India, said, “Going forward, we believe that incremental employment and upcoming infrastructure projects will give a substantial push to the residential markets of east and north Bengaluru. Considering this, we have identified new investment destinations.”

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