BANGALORE: Around 20 years ago, Rajarajeshwarinagar in Bangalore west was a little-known area. Early homeowners found it a densely forested region with little security. Pan to 2014 and the very same neighbourhood is now a well-established residential locality.
Thanks to civic infrastructure initiatives that upgraded connectivity via Mysore Road and the Sirsi Circle flyover, the Outer Ring Road (ORR), Tumkur Road, the NICE Ring Road and BMIC expressway, the nearly-operational Metro line and the planned Peripheral Ring Road (PRR) project, many existing and new localities have opened up for residential and commercial development. Integrated, mixed development projects have had significant impact on development in the region.
Changing face of Bangalore west
Bangalore west is defined as the area between Tumkur Road in the north and Mysore Road in the south. Vestian Global’s research reveals that Tumkur Road accounts for more than 50 percent of the total inventory in Bangalore west, thereby making it an attractive location. Shrinivas Rao, CEO – Asia Pacific, Vestian Global Workplace Solutions, elaborates, “These areas were earlier serviced by government and privately developed residential areas (Vijayanagar, Basaveshwarnagar and RPC layout). They were developed in order to provide housing for employees working in various industries like the textile mills and public sector undertakings such as BHEL and state government employees. However, in the late 2000s, the availability of mills lands for re-development led to transformation of this region into integrated townships with eminent developers venturing into this area.”
High-end options: Locations and availability
Over the last three quarters of 2013, this region has witnessed 14 new launches in the mid-segment and luxury housing segments in offcentral and peripheral locations. Kalpana Murthy, Associate Director – Residential Services, India, Cushman & Wakefield, explains, “West Bangalore was primarily a market with traditional independent houses, witnessing a rise in apartment developments over the last two decades. Locations in the north-west including Rajajinagar, Malleswaram, Yeshwantpur, West of Chord Road etc are witnessing the rise of high-end options. Demand for high-end options is coming from the old business community, from IT/ITeS professionals whose organisations are located in these micromarkets and also people who sold their independent houses and prefer to move into apartments. The price range for such options in the west is Rs 7,500 to Rs 12,500 per sqft.”
Shrinivas Rao adds, “Projects of ticket size greater than Rs 1 crore are all located in off-central and suburban locations of Malleswaram and Rajajinagar, and primarily cater to the business and high net worth individual community. Reasons for emergence of high-end homes in these localities are saturation of offcentral locations such as Indiranagar and Koramangala towards the east, improved connectivity due to the Metro Rail and proximity to upscale locations of Sadashivanagar, Malleswaram etc. The prices range is in the region of Rs 1.50 crores upwards for a three-bedroom apartment. Most of the villa projects are located on Mysore Road and one on Tumkur Road. Vestian’s research reveals that a majority of the projects are in the Rs 1-3 crores ticket size.”
Demand and potential for appreciation
According to statistics with Cushman & Wakefield, capital appreciation for high-end options in the west is 25-30 percent with the rental returns at around 30 percent. Shrinivas Rao states, “All the different housing segments in this region are growing. Bangalore west accounts for nearly 10 percent of the total absorption of residential spaces in the city. The current availability in this catchment area is around 8,390 units and the annual absorption in Bangalore west is about 1,800-2,500 units. The region has witnessed average annual capital value appreciation of 12-14 percent and yield rate of 3-6 percent. Malleswaram and Rajajinagar have performed better than the region’s average.”