Bengaluru office spaces grow pricier with hiked guidance values
With guidance values for commercial spaces shooting up by 40 to 70 per cent last week, the market value of properties is also expected to see a northward trend by up to 20%
Nov 29, 2014
Source : The Economic Times

 

BENGALURU: Prices of office spaces in Bengaluru have increased enormously lately, only deep pockets will be able to afford these places. With guidance values for commercial spaces shooting up by 40 to 70 per cent last week, the market value of properties is also expected to see a northward trend by up to 20 per cent.

Revised guidance values came into effect on November 18, and will determine stamp duty and other charges to be paid during registration of property. The market value of commercial space, especially in the CBD, which accounts for nearly 40 per cent of total commercial space in Bengaluru, has already gone up from 5 to 15 per cent, realty sources said. This includes traditional business streets like Commercial Street, Brigade Road, Vittal Mallya Road, among others. The biggest guidance value increases of up to 70 per cent are in IT corridors like Whitefield, Sarjapur, Marathahalli, Hosur and KIA Road. Realty sources admit commercial prices are already up by 10 per cent in prime areas, ever since guidance values were hiked.

The real estate industry is obviously worried. Farook Mahmood, chairman and managing director, Silverline Group, said, "Whenever there's a hike in guidance value, expectations from property owners go up and they instantly quote high rates for their property, without logic or reason. This leads to a situation where transactions come to a standstill till the market catches up with this increase."

Some also feel real estate transactions will never be the same again. "Buyers, sellers or builders who strike commercial property deals will look to avoid payment of stamp duty and registration charges by using instruments like general power of attorney (GPA) or sale agreement (SA). The hike will definitely be a deterrent for the industry and state government, which is hoping to make big bucks," said Prashanth Sambargi, partner, Mars Realty.

Suresh Hari, secretary, Credai, Bengaluru, said the industry isn't worried about the increase in guidance values, but feels it should be in line with services provided, especially with regard to commercial properties. "Guidance value should reflect the situation on the ground. But that isn't the case now. I hope the state government takes note of it and fixes registration costs and charges more for value addition. This will not only ensure transparency but also make the real estate market vibrant," he added.

"We are yet to see a material impact as this is a new announcement. However, we anticipate a significant inflationary impact on the sector in Bengaluru, which will adversely impact business. Bengaluru has an even demand across most parts, but more so east Bengaluru. The maximum adverse impact will be in the CBD area which will push occupants to more decentralized locations. In a relative sense, east Bengaluru areas like Whitefield will become even more attractive for corporates. The government should improve infrastructure and make the city more attractive so that corporates increase investment, which will in turn improve their revenues," said Vishal Mirchandani, CEO (retail and commercial), Brigade Group.

"We've increased guidance values for commercial properties by 40 per cent across the city. I don't think it will have any impact on the real estate business as there is still a huge gap between the guidance value and market value," said N Prakash, Inspector General of Registration and Commissioner of Stamps.

Latest Realty News

Launch of the new logo of Yashada Realty Group held in Pune
Nov 29, 2014
Pune: Yashada Realty Group, a rising star of the realty industry recently unveiled their new corporate identity, logo and website
Builders slam BMC’s diktat on sale of flats on basis of food, other preferences
Nov 29, 2014
MUMBAI: Builders slam BMC's general body resolution, seeking to stall construction permissions if any builder sells flats on grounds of caste, religion or food preferences
Government to set up house panels to probe coop housing societies
Nov 29, 2014
Hyderabad: The state government has decided to set up two joint House committees to probe into the functioning of all cooperative housing societies
HUDA clears dues to 1485 plot owners
Nov 29, 2014
GURGAON: Nearly 1,500 plot holders in Sector 52 heaved a sigh of relief as HUDA administrator Anita Yadav ordered immediate refund of dues to them in compliance with a directive by the Punjab and Haryana high court
Norms for registering flats in Ghaziabad highrises relaxed
Nov 29, 2014
GHAZIABAD: The department of stamps and registration of Ghaziabad has relaxed the norms for registration of flats in high-rise apartments of the city
Centre likely to drop plans to introduce land acquisition bill in winter session
Nov 29, 2014
New Delhi: The Centre is likely to drop its plans to introduce the land acquisition amendment bill this session
Realty market seeing no slowdown, says HDFC CEO Keki Mistry
Nov 29, 2014
Mumbai: Housing Development Finance Corporation (HDFC) has seen no reluctance among home loan borrowers and overall sentiment is upbeat
CAG trashes SEZ Policy for diverting land to realty projects
Nov 29, 2014
New Delhi: The CAG has trashed the Special Economic Zones (SEZs) Policy as it has ended up diverting huge tracts of land acquired for setting up manufacturing facilities and generating jobs to real estate projects
DDA goes for image makeover with luxury houses in west Delhi
Nov 29, 2014
New Delhi: Delhi Development Authority (DDA) is all set to give top private builders of Delhi-NCR a run for their money
In 3 years, Robert Vadra firms reaped up to 600 per cent profit in land deals
Nov 29, 2014
Three companies owned by Robert Vadra, son-in-law of Congress president Sonia Gandhi, made profits up to 600 per cent within three years of investment in real estate in Rajasthan

Latest Realty News Of State

Realty Talk's