Known to be the largest office market in India and the biggest in the Asia-Pacific region, Bangalore is one of the most preferred markets among the Indian cities for office expansion. According to the recent estimates by a leading real estate consultancy firm, the city reported absorption of 11.6 mn sq ft of office space last year on a net basis.
With the increase in the number of global companies who are willing to set up captive technology and back office centres in Bangalore, the city has maintained its leadership position in the country’s corporate real estate market. As a matter of fact, with the expansion of the nation’s technology sector, Bangalore has emerged as a dominant growth frontier catering to new economic sectors such as Information Technology, biotechnology, aerospace, and research and development. As per reports, the city has even surpassed the figures of office space absorption in Tokyo, Shanghai, Hong Kong, and Beijing which stood at 7 million, 6 million, 3 million, and 2.5 million, respectively in 2018.
Over the last few years, prominent corporate firms have established their footprints in Bangalore and stimulated the growth of commercial real estate across the city. The availability of good quality office spaces at an affordable rent as compared to Delhi NCR and Mumbai has further propelled the demand for office spaces in recent years. “Availability of niche talent pool, friendly environment, affordable rentals and self-sustained office projects are some of the reasons behind the large scale office absorption in Bangalore. The commercial market of the city is brimmed with famed names including IBM, Accenture, Infosys, Wipro, Intel, Cisco, Goldman Sachs, and Shell. Besides these, e-commerce majors such as Flipkart, Amazon, Myntra, and eBay are also amongst the major office space occupiers in the city. The monthly rental rates across the city are as low as Rs 40-80 per sq ft, depending upon the location of the project. For a furnished space, the monthly rates vary between Rs 100 per sq ft and Rs 350 per sq ft,” avers Vishal Parwani, Owner, SSB Properties, Bangalore.
According to a recent report, which took into consideration the prime rental values across 33 global cities in 2018, New Delhi witnessed a prime rental value of Rs 326 per sq ft per month, whereas the recorded prime rental rates in Mumbai stood at Rs 300 per sq ft per month. The prime rental rates in Bangalore, on the other hand, stood at Rs 125 per sq ft per month.
While the availability of top talent for business is one of the major factors behind the steady corporate occupier interest, the well-established social infrastructure and good climate of the city has also helped significantly to attract and retain businesses in Bangalore. Comprising numerous large-sized technology parks such as Manyata, Global Village, and Prestige, the city has continuously witnessed a rise in the number of clients who are looking to consolidate their operations in such integrated parks across the city. “Connectivity has played a pivotal role in introducing talented workforce to the city. Bangalore is well connected by means of railways and roadways. Owing to this, professionals from the neighbouring States can easily commute to Bangalore. Hosur Road, Bellary Road, Tumkur Road, Mysore Road, Kanakapura Road, and Old Madras Road are some of the major roads which not only facilitate movement across the city but also connect the city to the surrounding States such as Kerala, Andhra Pradesh, and Tamil Nadu. Moreover, the frequency of flights, connecting Bangalore to other major cities, is also quite high. As a result, the city is brimmed with a talented workforce from different States. This is one of the other major reasons behind the long-term expansion of the city’s commercial real estate sector. Some of the renowned names that are soon going to expand their network in Bangalore include Boeing, IKEA, and Deloitte,” shares Vishal.
The vibrancy of the commercial market in Bangalore has also attracted investors from abroad. Embassy, Xander Group, and Canada’s Brookfield Asset Management are some of the prominent names which are looking forward to a foray into the market. Buoyed by improved economic sentiment and owing to the factors mentioned here above, Bangalore is likely to maintain its position in the commercial real estate market even in the long run.