Over the last decade, Whitefield has become a self-sustaining suburb with residential projects, modern-format retail malls, hotels and other social infrastructure.

This micro-market is one to watch out for in the next couple of years, as it is set to be better connected to the rest of Bangalore through a Peripheral Ring Road from Electronic City and the Metro Rail when completed.

In the commercial segment, Mr Srinivasa Reddy, Manager - Research and Real Estate Intelligence Service, Jones Lang LaSalle - India, says that the Bangalore market witnessed a notable improvement in demand, mainly for large-sized offices, as companies such as Microsoft, Unisys, Accenture, Cognizant, NDS, ACS, Infinite Computer Solutions and L&T Infotech each leased office space of more than 1 lakh sq ft.

Projected demand

During 2011, a total of 7.64 million sq ft is expected to be absorbed.

“This is based on the 'request for proposals' in the market for buildings likely to be completed and pre-commitments in under-construction buildings. The secondary business districts and Whitefield will continue to contribute to the bulk of the demand as the supply and demand is concentrated here,” he says. In Whitefield, by end-2011, 4.09 million sq ft of office space will be absorbed.

In Whitefield region, 82 per cent of the space is occupied by IT/ITeS companies, 90 per cent of which are MNCs. Mr Shrinivas Rao, CEO- Asia Pacific, Vestian Global Workplace Services(a real estate services firm), says that at over 25 million sq ft, Whitefield has 20 per cent of Bangalore's total operational non-captive IT/ITeS SEZ space.

The report from Vestian Global, “IT/ITeS Growth Corridor Series” focusing on Whitefield and Electronics City, says space underconstruction is 5.1 million sq ft, and planned supply 20.6 million sq ft. Whitefield's captive space (office and manufacturing) is 10.7 million sq ft and planned supply is about 3.6 million sq ft.

“The challenge in the Whitefield market is that the planned development in the non-captive space may not come up in the immediate future,” says Mr Rao.

This challenge mainly comes from the serious competition from the development in Outer Ring Road, especially the Marathahalli-Sarjapur Road stretch, where over 28 million sq ft space has been committed, he points out. “These will get completed in the next three years, and Whitefield might be impacted from that perspective.”

On the office space rentals, Mr Reddy says that rates in Whitefield increased from Rs 27 per sq ft per month in the third quarter of 2010 to Rs 28 per sq ft in the fourth quarter. “The Whitefield micro-market witnessed substantial leasing activity in the fourth quarter and is likely to see improvement in leasing activity during 2011 and 2012”.

Due to shortage of ready-to-move-in office space rental values in Whitefield are expected to increase from Rs 30 per sq ft a month by end-2011 to Rs 32 per sq ft by end-2012.

Vacancy levels high

However, the vacancy levels are quite high in Grade-A buildings at about five million sq ft after the commissioning of the 3.1-million-sq-ft Prestige Shantiniketan Park in the third quarter of 2010. Vacancy levels are similar in grade-B buildings too. Thanks to the IT-centric commercial market, the demand for residential space in Whitefield is spread over villas, row houses and apartments.

All prominent developers in the city including Prestige Group, Sobha Developers, and Brigade Group have projects here.

“Peak demand is for villas, followed by row houses and then apartments. My recommendation is very positive on the residential sector,” says Mr Koshy Varghese, Managing Director, Value Designbuild, a Bangalore-based developer.

Mr Bijay Agarwal, Managing Director, Sattva Group, says “If office demand picks up, automatically it will translate to increase in residential demand.”

Property prices in the area have gone up 10-15 per cent in the past two quarters. The company is also planning a 20-acre mixed use development project in this area.

The hub now has a multitude of retail outlets coming up in many malls including Cosmos Mall, Big Bazaar, HyperCity and Forum Value Mall.

Mr Ashutosh Chakradeo, Business Head - Food and Grocery, HyperCity, says “We looked at 45 different pockets across the city before zeroing in on Whitefield. This area will also have a high acceptance of premium malls such as HyperCity that can cater to customers within 10-km radius.”

According to Mr Rao, about five malls — Phoenix Market City, Park Square, Forum Mall, Inorbit Mall and one from Synergy Constructions - are expected to come up in the next couple of years.

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