Admin December 19, 2015, 6:49 AM Bangalore real estate and its micro markets
Bangalore is the unquestioned Silicon City of India Introduction to the Past

Bangalore’s emergence as a centre for information technology stems from decisions taken by the federal government shortly after independence to locate strategically sensitive industries well away from borders and coastlands. Bangalore became a ‘city of choice’ to base the Indian air force and other public-sector institutions.This resulted in establishment of a number of universities, institutions, and colleges providing engineering and scientific training. Apart from the above strategic reasons, choosing Bangalore for heavy investments into large public sector undertakings was due to existence of educated workforce and availability of cheap electrical power.

One can partly attribute the presence of IT in Bangalore to the initial establishment of electronics firms in the city. In the initial phases there were more hardware companies in the city, and it was more appropriate for IT firms to locate in the vicinity of these hardware units. The emergence of modern industry in Bangalore predated independence and along with post-independence, investments created a large modern industrial workforce in the city. Existence of such a workforce was conducive for the emergence of the IT and electronics sectors and therefore, Bangalore was able to exploit the potential in a better way than other regions.

The potential of software exports was recognized as early as 1972 when the Software Export Scheme* was launched. The scheme provided a variety of concessions to software exporters including hardware imports at low tariffs. Simultaneously, computer, software education and training were emphasized and institutions focused on these specific trainings.

Moving forward, in1976, the Government of Karnataka attempted to encourage the electronics industry through the establishment of Karnataka State Electronics Development Corporation (KEONICS). It promoted private enterprises through marketing support, created testing & development centres and also operated manpower training centres. In 1977, the Department of Electronics of Karnataka state formed an Electronics Park that also housed the Software Technology Park (STP), the first in the country. This facilitated the exploitation of emerging IT opportunities in Bangalore. In late 1980s (during 1988-91), the Software Technology Parks of India Scheme was launched by the federal government. As more resources became available from the Centre for the STP, the scheme provided many facilities and helped the fledgling STP scheme that the Karnataka government had launched earlier in Bangalore.

During 1960 and 1970, a number of skilled Indian professionals migrated toUSA and returned to set up centres in Bangalore utilizing the market to the fullest.The factors which contributed to the growth of Bangalore include social and political stability within the state, absence of labour conflicts, establishment of technology parks, improving the physical infrastructure, high-quality residential complexes and extensive support of the government during the initial phases (i.e., simplifying the procedures for establishment of software unit) and the existence of decent educational and R&D institutions. This deepened the local labour market and provided the facilities needed.


In current times Bangalore is the unquestioned Silicon City of India. It is anticipated that by 2020, we are on track to be the largest IT cluster globally, employing the highest number of IT professionals. Karnataka alone created 73,000 new jobs in IT, last fiscal year and employs 10 lakh people directly and 30 lakh indirectly. This number is expected to double to 80 lakh direct and indirect jobs by 2020.

Considering the work in progress, activities of the ITIR (IT Investment Region near Devanahalli on the outskirts of Bangalore), views are: it will bring in investments of over $20 billion, create 1.2 million direct jobs and 2.8 million indirect jobs once it is completed in 2032.

OFFICE RETAIL MARKET DYNAMICS Primary Office/Retail Supply in Bangalore Type of development
Values are in Mn sq. ft. Primary Supply Availability
Office 46.02 33.23
Retail 2.80 48.82
Grand Total 48.82 35.78

The commercial real estate market of Bengaluru offers a total primary supply of 48.82 Mn sq. ft. The total primary supply comprises of both office and retail space. Office space accounts for 46.02 Mn sq. ft. Whereas retail has 2.8 Mn sq. ft. of primary supply. From the grand total of 48.82 Mn sq. ft. of primary supply 35.78 Mnsq. ft. of space is vacant and available to occupy.

”Primary Construction Status
Values are in Mn sq. ft. Primary Supply Availability
Office 46.02 33.23
Ready to occupy 10.59 2.34
Upcoming 15.83 15.83
Under Construction 19.60 15.06
Retail 2.80 2.55
Ready to occupy 0.13 0.13
Upcoming 1.55 1.55
Under Construction 1.12 0.87
Grand Total 48.82 35.78

2.34 Mn sq. ft. of office space is available and ready to occupy, whereas 15.06 Mn sq. ft. is under construction and 15.83 Mn sq. ft. is planned to be developed in near future. From the total primary availability of 2.55 Mn sq. ft. of retail space, 0.13 Mn sq. ft. is ready to occupy, whereas 0.87 Mn sq. ft. is under construction and 1.55 Mn sq. ft. is planned to be developed in near future.

”Office ”Retail
Suburb wise
Values are in Mn sq. ft. Primary Supply Availability
Central 4.99 4.01
East 27.25 16.90
North 6.72 5.78
South 9.21 8.53
West 0.64 0.56
Grand Total 48.82 35.78

East quadrant of Bengaluru has the highest primary supply as well as the primary availability of commercial real estate in the city. The primary supply accounts to 27.25 Mn sq. ft. and the availability is at 16.90 Mn sq. ft. Next to East Bengaluru is the South quadrant with 9.21 Mn sq. ft. of primary supply and 8.53 Mn sq. ft. of available space in it.

Suburb wise development
Suburbs Office in Mn sq. ft. Retail in Mn sq. ft.
Primary Supply Availability Primary Supply Availability
Central 3.669 2.681 1.325 1.325
East 26.728 16.625 0.520 0.270
North 6.468 5.527 0.254 0.254
South 8.515 7.837 0.698 0.698
West 0.639 0.560 NA NA
Grand Total 46.019 33.230 2.797 2.547

Out of the massive primary supply of 26.72 Mn sq. ft. of office supply in the East quadrant of Bengaluru, 16.62 Mn sq. ft. is available.
Retail space has a primary supply of 1.32 Mn sq. ft. in central Bengaluru. The whole of primary retail supply in the central region is available for use.

Suburb wise Availability of office/Retail inventory Office
in Mn sq. ft. Ready Under Construction Upcoming Grand Total
Central 0.41 2.27 NA 2.68
East 1.22 10.59 4.82 16.62
North 0.27 0.59 4.66 5.53
South 0.44 1.05 6.35 7.84
West NA 0.56 NA 0.56
Grand Total 2.34 15.06 15.83 33.23

10.59 Mn sq. ft. of the primary supply of office development in the East quadrant is under construction. South Bengaluru is all set to see 6.35 Mn sq. ft. of upcoming office space in near future.
2.34 Mn sq. ft. of primary office supply in Bengaluru is ready to occupy, whereas 15.06 Mn sq. ft. is under construction and 15.83 Mn sq. ft. is yet to come

in Mn sq. ft. Ready Under Construction Upcoming Grand Total
Central 0.13 NA 1.20 1.33
East NA 0.27 NA 0.27
North NA 0.25 NA 0.25
South NA 0.35 0.35 0.70
Grand Total 0.13 0.87 1.55 2.55

Bengaluru central has a ready to move in primary supply of 0.13 Mn sq. ft. of retail space and its yet to see an addition of 1.20 Mn sq. ft. of retail space in the central region in days to come.
South, East and North quadrants of Bengaluru have 0.35, 0.27 and 0.25 Mn sq. ft. of available retail development under construction.

List of Key Areas with an available inventory of 1 Mn Sq. ft. and above Office
in Mn sq. ft. Ready Under Construction Upcoming Grand Total
Outer Ring Road 0.50 9.03 3.04 12.57
Koramangala 0.04 0.25 5.40 5.69
Bellary Road 0.04 0.20 3.50 3.74
Whitefield 0.68 0.85 1.18 2.72
Indiranagar NA 1.20 NA 1.20
Jakkur NA NA 1.16 1.16
Electronic city 0.01 NA 0.95 0.96

Outer Ring Road has the largest primary supply of office space. 12.57 Mn sq. ft. of primary supply of office space in outer ring road comprises of 0.50 Mn sq. ft. of ready to occupy space, 9.03 Mn sq. ft. of under construction space and 3.04 Mn sq. ft. of upcoming office space. Koramangala, Bellary road and Whitefield have available office inventories of 5.69, 3.74 and 2.72 Mn sq. ft. only next to outer ring road.

in Mn sq. ft. Under Construction Upcoming Grand Total
Indiranagar NA 1.20 1.20
Hosur Road NA 0.35 0.35
Bannerghatta Road 0.31 NA 0.31

1.20 Mn sq. ft. of Retail space is planned to be added to Indiranagar soon,which will be available to occupy. Bannerghatta road has an availability 0.13 Mn sq. ft. of retail space which is under construction. Hosur road also has a 0.35 Mn sq. ft. of upcoming retail space.

Capital Values and Rental values per sq. ft.
Suburbs Area Outright Rent
Central Brigade road NA 70
Cambridge Road NA 85
Cunningham Road NA 65
Domlur NA 135
Indiranagar 12,000 110
Lavelle Road 25,000 190
East Jeevan Bhima Nagar NA 65
Old Madras Road NA 30
Outer Ring Road 7,500 40
Whitefield NA 25-68
North Bellary Road NA 55
Hebbal NA 66-69
Sahakara Nagar NA 70
Vyalikaval NA 50
Yelahanka 6,500 60
South Adugodi NA 110
Electronic city NA 26
Jayanagar NA 60
Koramangala NA 65-70
Sarjapur road NA 45-60
West Malleswaram NA 75

Different regions in Bengaluru have varied rental values. On an average the rentals start from as low as INR 25 per sq. ft. to as high as INR 190 per sq. ft. Lavelle Road has a high capital value of INR 25,000 per sq. ft. for an outright sale where as other locations such as Indiranagar and outer ring road are selling at an average rate of INR 12,000 and INR 7,500 per sq. ft. respectively.

LJ Hooker tracked and analysed the above report for the first time concentrating on the Commercial Real Estate market.

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