What ails Bangalore West?

While real-estate in the south, south-eastern and eastern parts of Bangalore have flourished since the mid-1990s thanks to the IT/ITeS boom, the spotlight focussed on the north in 2005 when Devanahalli was picked as the location for the new international airport. But the West has lagged.

Areas such as Malleshwaram, Yeshwantpur and Rajaji Nagar in the Western region, were once sought after locations. Malleswaram, where the prestigious Indian Institute of Science is located, is known for its old-world charm. The West is a predominantly industrial belt — from the Doddaballapur Industrial Area in the North West Frontier to the old town of Yelahanka (also an industrial region), Yeshwantpur Industrial Area, Peenya Industrial Area and Rajaji Nagar Industrial Area.

Mr Neville M. Vaswani, Managing Director, Vaswani Group, says the region did not grow as real estate destination “mainly due to the fact that it is predominantly an industrial hub. “This area also houses the garment industry and small scale industries. About 74 per cent of people fall in the income bracket of Rs 12,000-20,000 per household,” points out Mr Naresh Dandapat, National Director – South, Knight Frank India, real estate consultancy firm.

Infrastructure woes

Even government agencies did not show interest in the initial days to develop infrastructure, and so developers shied away, explains Mr Bijay Agarwal, Chairman, Salarpuria-Sattva. Bangalore West, especially Rajaji Nagar, Dasarahalli and Peenya suffered heavy traffic right from the beginning i.e. when real estate growth started, he says.

However, when the State government proposed to set up a second IT hub in the Bangalore West region around the Magadi Road area, and despite Tumkur Road being developed for better accessibility and good infrastructure in place, Mr Dandapat points out that “there was a mismatch between expectation from developers and cost of property”, and the area did not pick up well.

Challenge of selling

Only a few developers who catered to the lower middle and mid-income groups did well initially. “Those with larger projects found it difficult to sell beyond a third of the project space.” He points out that there are several projects that were launched in 2006 and 2007, that are yet to be sold fully.

Mr Viswa Prathap Desu, Vice-President — Sales, Brigade Group, says that the area has also not seen big projects like the other regions in this city of an ever-changing landscape, because there are very few large land parcels to come by for new developments. He does not agree that developers have shied away from this area, and points out that large developers such as Sobha Developers, Mantri Developers, Renaissance, and his own company, Brigade Group, have come up with new developments.

But the problem as Mr Dandapat points out is in the size of the project and the targeted buyers. While those with an affordable price tag have been able to sell, big brands with a mid-market price tag have found the going tough.

A large project from a branded player, which offered apartments at Rs 2,900 per sq ft, has not done well despite sustained ad campaign. Another commercial property lost out on a prime lease transaction from a multinational company because the MNC employees did not want to commute as they were living closer to the current IT hubs.

A senior banker says that lack of IT/ITeS companies was the main deterrent for developers to locate projects here.

But there is good news. “After the elevated track from Nelamangala till Yeshwantpur, the prices are soaring and many top-line developers are changing their mind to start development here,” says Mr Agarwal.

Price appreciation in the residential segment has happened been very good in the last three-four years with prices doubling. As the infrastructure improvesfurther, there is further scope for a lot of price appreciation, says Mr Desu of Brigade Group.

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