BANGALORE: The growth in Bangalore’s commercial realty market began from the Central Business District (CBD), and expanded into the extended or Secondary Business District (SBD), south and south-east Bangalore. Over a period of time, corporates with long-term occupancy plans relocated to south-east and east Bangalore, owing to better connectivity and the availability of IT parks. With the establishment of two prominent tech parks and the location of the international airport, Bangalore north has come into focus with many corporates expressing interest in the region.
Ram Chandnani, Deputy Managing Director – South India, CBRE South Asia, elaborates on the reasons. “Over the last eight to nine years, developers began building tech parks in north Bangalore which started attracting corporate clients. These initial developments, however, were restricted within 12-14 km from the CBD, considering the travel time from other parts of the city as the northern micromarket did not offer enough residential or social infrastructure options. The areas that saw the initial commercial development were the Nagawara section of the Outer Ring Road (ORR), with a prominent tech park being the pioneer in this respect.”
Preferred destination for IT
IT continues to be the prime demand driver for commercial space in the north. Girish K S, Local Director – Strategic Consulting, JLL India, says, “Demand stems largely from knowledge-based industries and the key knowledge sectors which dominate the city’s economy – IT/ITeS and biotech. Most of the occupiers in the two prominent business parks here represent these two sectors. Occupier categories such as IT/ITeS, hardware and aerospace have also secured land allotment within the Devanahalli Industrial Area.”
IT and corporate houses are considering north Bangalore as a preferred destination. Most of the IT/ITeS clients evaluating the region for fresh commercial spaces are either seeking consolidation options or have longterm occupancy plans. Ram adds, “Traditional corporate firms typically prefer to be located on the main highway (NH7) with their corporate offices/headquarters, while many have been evaluating spaces in upcoming business parks in the region too. A noted feature is that many developers have been creating self-sustained hubs, with integrated corporate office, retail and residential developments within their projects.”
Commercial space: Availability and options
Research by CBRE indicates that currently, commercial options are available in tech parks as well as in independent properties. SEZ options are available in upcoming projects. At present, there is approximately three million sqft of commercial space in this market. While some options are in final stages of construction, some are ready-to-occupy, and includes secondary supply.
While Bellary Road has approximately 0.80 million sqft of Grade A space, Hebbal has close to 0.42 million sqft, the Nagawara-ORR stretch has the highest current availability at around 1.23 million sqft. Thanisandra has close to 0.56 million sqft of Grade A space while Yelahanka has around 36,000 sqft.
Girish says, “The estimated supply during the current year is about 1.70 million sqft. Overall, Bangalore north’s commercial stock represents about nine percent of the overall stock available in the city, which is about 75 million sqft.”