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Offices Spaces in Bangalore are Good Bet for Commercial Property Investment

The vast expanse of office spaces in Bangalore have been the biggest grosser of the city’s commercial market. Investments in this sector can turn out to be some of the best investment bets. Read on to know more.

 

Real Estate has always been one of the best opportunities for investments. For majority, real estate investment always implied residential property market. Does this mean that commercial segment is not really valued in terms of investments? Well, not really. Growth in commercial realty is an indicator of the development of the economy.

 

Major Indian cities do offer ample options in commercial real estate investments. Cities like Delhi, Mumbai, Bangalore and Chennai are some of the leading destinations for commercial property investment in India. Office spaces in these cities are in high demand and often turn out to be some of the best deals for investments.

 

Commercial Real Estate in Bangalore

 

Bangalore in southern part of the country is a leading market for commercial property investments. The office market of Bangalore has evolved considerably due to the presence of the Information Technology Sector (IT). Although several other sectors like manufacturing, electronics and automobiles have a strong presence, the IT/ITeS happens to be the major driving force of the commercial properties in Bangalore.


The fact that Bangalore is home to several IT companies, prove that the city is a preferred destination for all major IT companies and moreover, availability of an immense talent pool within a moderate cost, has turned Bangalore into one of the leading markets for commercial realty in India. Since the IT/ITeS Sector continues to dominate the market, it accounts for 57% of the office spaces in Bangalore, followed by the Banking and Financial Services (18%) and the manufacturing sector (15%). Of late, the Internet Retailing has also been covering a lot of office spaces in Bangalore. Organizations like Flipkart, Snapdeal, Amazon and eBay have their offices in the city.


Office Space Absorption in Bangalore

 

Currently, the total office space stock in Bangalore covers is 99.3 mn.sq.feet of which 86.3mn.sq.ft is engaged causing in a vacancy level of 13%. The vacancy stages have progressively declined since 2009 when they were at a middling value of 23%. This augurs well for the city’s office market,a stable demand for office space has supported Bengaluru to maintain its absorption levels on a yearly basis.

 

With a revival of the property market in 2009, developers extended their projects and a reconstruction spree began in 2011 and 2012. While most of these projects have been completed, few more are set to be completed in the coming one or two years’ time. A well staggered office space quantity of 41.1 mn.sq.ft. is projected to come up during 2013-2017. Moreover, a firmer demand during 2013-17, will ensure that the vacancy level accomplishes a satisfactory value of 12% by 2017 and rentals continue to be steady without much variation. Some of the major micro-market within the Bangalore commercial realty segment is highlighted below:

 

Business Districts

List of Micro-Markets

CBD and Off CBD

Richmond Road, Residency Road, Cunningham Road, Infantry Road

         SBD

Indiranagar, Koramangla, Old Madras Road

         PBD East

Whitefield, Brookefield, KR Puram

         PBD South

Hosur Road, Kanakpura Road, Electronics City

         ORR Road

KR Puram, ORR

 

Bangalore has went on to occupy the highest place for maximum office space absorption within the country even when global economy does not seem to be the very best. This has led to the launching of multiple innovation centres in the city.

 

 With FDI taking a leap ahead within the real estate market of India, commercial realty market of Bangalore is all set to witness a rapid boom and returns on investments are absolutely assured in the forthcoming years. Analyzing the market dynamics and the cyclical nature of the overall real estate business, rentals are on a rise currently. Therefore commercial investments are bound to yield substantial results in the coming future.

 

"It's a good time to buy pure commercial properties. When I say this, I am excluding properties zoned as IT (information technology), ITeS (IT-enabled services) or industrial. Commercial spaces help investors earn better rental yields than houses," says Raja Kaushal, managing director, Gatere Real Estate and Infrastructure Advisory Services, a real estate brokerage with focus on commercial properties.

 

Areas like Indiranagar, Koramangla, and the sub-markets of Outer Ring Road, are some of the best bets for commercial investment in Banaglore. A number of official reserves running into numerous million dollars have been promised by marquee investors such as Mapletree and Blackstone in Outer Ring Road sub-markets.

 

So, if you are looking forward to investing in the commercial real estate in Bangalore, now is the best time.

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