Bangalore the city 

The Boom in the real estate sector has given rise to property barons across the country. Bangalore, a city synonymous with development---be it industry or technology. With Bangalore developing at a brisk pace there is a healthy interest in its Real Estate market. This calls for sound and reliable information on the existing real estate scenario in the city.

Bangalore is the capital city and the political, social and economic hub of the State of Karnataka. It is one of the fastest growing metropolitan cities in India at present. The population of the city at 4.8 million in 1991 is expected to exceed 7 million by the year 2011. With less than 0.5% area of the state, it is home to nearly 10.5% of its population.

Bangalore is India's fifth largest city and its population has almost doubled over the past 10 years. This growth is attributable to economic reforms in India; the city's growing popularity as a software destination and its ability to attract individuals to live and work has been commendable.

Bangalore is not widely dispersed geographically as is the case with Delhi, Mumbai and Calcutta. The population growth and corporate incursion that Bangalore has witnessed since 1990 is not sustainable by the current infrastructure.

Historically, the Government of India has taken the initiative to establish institutions like MAC, HMT, ITC and ISRO etc.,in Bangalore. This thrust has helped the city develop to a hub of information technology, electronics, precision engineering, aerospace, ready-made textiles and electrical machinery. In fact, 33 of the top 200 software companies in the country are headquartered in Bangalore.

Real Esate

In Bangalore Jaya Prakash nagar and Whitefiled are witnessing a boon in construction activity. Most major builders have undertaken large projects in two hot areas. Once completed the will add several million square feet of commercial and residential space to city.

As in case of any city there are certain advantages and disadvantages. High cost of living, poor infrastructure support from the government, inefficient public manpower utilities, inadequate air and surface transport links are the deterrents which make people think twice about investing in property in Bangalore, but these are very small thing as compared to the facilities like Good quality real estate, Better career growth opportunity, Ease of availability of skilled laborers, Mild and stable climate, Good social life, recreation and entertainment possibilities which makes people a beeline for Bangalore.

Majority of the commercial developments in the city has been done by the Private Sector. The BDA (Bangalore Development Authority) controls the growth process of the city. The industrial growth is controlled by KIADB, but in the absence of strict enforcement by the authorities, there is a considerable misuse of residential premises for commercial purposes.

Defining Market Segments

The two central areas of Bangalore are:

M.G. Road extending southward towards Richmond Road and towards Cunningham Road in the north.

The Majestic area

M.G. Road and its surroundings comprise the city's Central Business District. The area neighboring Majestic is mostly comprised of local trading outlets and is the heart of the traditional/old city.

The Bangalore commercial market segment has been delineated into three limits.

» Central Business District

» Suburban

» Peripheral

Central Business District: Unlike Connaught Place of New Delhi and Nariman Point of Mumbai, Bangalore has no true concept of a CBD (Central Business District).

The flexibility provided thus, for the business sector, has seen the CBD grow from the main business address of MG Road to other main roads such as Residency Road, Richmond Road and Brigade Road, Infantry Road and Cunningham Road.

However the CBD is not limited to that area only. The Prime CBD falls within the radius of 2 km from the city core. The center of the CBD is defined as the public utility building of MG Road. This area as seen substantial commercial developmental activity in the past few years.

The Prime CBD consists of MG Road, Brigade Road and Bylanes directly around these two roads. With the spiraling costs of Real Estate on MG Road in 1994 and the unavailability of good quality premium space, the CBD extended towards the north and south of MG Road. It as the cities most premium quality office space and retail outlets. The level of infrastructure and commercial facilities like Banks, Offices and accessibility to transport etc are best found in the prime CBD area. Brigade Road has seen some premium quality developments. However the usage on Brigade Road is primarily retail and commands the higher rental and capital value.

A little outskirt of M.G. road is the off prime CBD area within a radius of 2 to 5 km from the central point of public utility building of MG Road. Some of the prominent streets in this area like Commercial Street, Infantry Road, Cunningham Road, Richmond Road, Residency Road, Millers Road, St.Mark's Road, Vittal Mallya Road, Lavelle Road. These areas have experienced strong development activities in the past few years. The advantage of these locations is reduced congestion, ease in availability of space, proximity to the city central and cost benefit relative to the city center.

The suburbs of Bangalore are classified as areas in a 5-10 km radius of city center. Areas that have seen some commercial development activity into Airport Road, Koramangala, Indiranagar and Jayanagar.

Peripheral Areas: The Peripheral Areas of Bangalore comprise of Bellary Road, Whitefield, and Bannerghatta Road. Industrial Areas: The Industrial Areas of Yeswanthpur, Peenya, Veersandra, Bommasandra, Bommanahalli etc. have seen many small and large Industrial developments.

Bangalore Office Sector: Declining rentals result in increased demand for commercial space in the CBD area, even as the secondary micro markets remain popular with corporate looking for large independent facilities.

Corporate leasing activity in the city continued to be strong in the city center witnessing resurgence in leasing activity. Bangalore however, remains the IT hub of India, with over 70 per cent of the revenues of the software industry being generated here.

The supply of premium quality commercial space increased considerably during this period, with the availability of the International Technology Park (Whitefield), supplying approximately 1.2 million square feet.

Consolidation of real estate portfolios by both Indian and multinational (MNCs) information technology (IT) companies have lifted the sagging real estate markets in Bangalore city. In this sector, both software and hardware have been the biggest contributor for the growth in central business district (CBD), off-CBD and suburban areas.

The Bangalore city continues to enjoy the status of most preferred city' by the new and existing companies whose sentiments range from "We get what we want" to "It is desirable more is done to infrastructure; but yes we are comfortable here."

Today, the Indian and MNCs companies, who are in IT related business occupy close to a million square feet of space and have paved the way for a lot more peer groups to absorb several million square feet of space. On the whole, the up swing in commercial (office and retail) and residential space transaction continues. As predicted by many international real estate consultants like Brooke International, CB Richard, Jones Lang LaSalle, Cushman Wakefield and many Bangalore-based builders like Gopalan Enterprises, Bearys Real Estates, Prestige Group, most facilities which are ready/nearing completion have been leased by end-users.