24/12/2015
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Overall Demand Scenario in BANGALORE REAL ESTATE Industry:
The Bangalore market saw absorption of 6,519 units in 2Q13 against 6,689 units in 1Q13. Unsold stock in 2Q13 totalled 50,184 units in 2Q13 as compared to 46,823 in 1Q13, reflecting a vacancy rate of 53.4%, down from 54.2% in 1Q13.
Supply: A total of 21 residential projects were launched across Bangalore in 2Q13, offering 9,889 units against 10,009 units in 1Q13. Meanwhile, eight residential projects comprising 2,319 units in various sub-markets were withdrawn from active stock as they were completely sold out.
The major projects launched in 2Q13 included Prestige Sunrise, Prestige Ivy Terraces, Shriram Sameeksha, Sobha Santorini and Brigade Begonia.
Central (CBD) & Off Central (SBD): Low supply and high demand. Due to low availability of large land parcels and high capital values, these micro-markets have seen a limited supply of residential developments. These markets have very good social and physical infrastructure.
Nitesh Park Avenue, Prestige Kingfisher Towers, Westcourt Cityview, ETA Beau Monde, 77 Degrees East, Sobha Indraprastha and Prestige Edwardian are some of the high-end projects in these micro-markets.
1) North Bangalore:
The demand for high-end residential units remains high in the North Bangalore region. Residential real estate activity in North Bangalore has gained traction post the commencement of the Bangalore International Airport. The projects located around Hebbal, Bellary Road and surrounding areas are in the luxury segment. North Bangalore is assured to be the next economic centre of Bangalore.
Proximity to the International Airport and planned social and the physical infrastructure in the North have boosted development in the area. Embassy Lake Terraces, RMZ Latitude, Karle Zenith, Equinox, Embassy Boulevard are some of the high-end projects in the North Bangalore.
=> Demand drive in North Bangalore:
Proximity to the International Airport, planned infrastructure such as the Elevated Expressway (Bellary Road), High Speed Rail Link, Bangalore Metro Rail, etc. have been the major growth drivers for residential development in North Bangalore. Also, the Government is aggressively promoting this area for future economic activities. The planned Information Technology Investment Region (ITIR) near Devanhalli, Aerospace SEZ planned near the International Airport and the proposed Devanhalli Business Park are the key drivers for residential development in North Bangalore. Some of the prime developments in North Bangalore in the mid-segment residential category are Prestige Misty Waters, Hiranandani Glen Gate, Brigade Altamont, Mantri Webcity and Sobha City.
2) South Bangalore:
The demand for high-end residential developments is low in the South. The housing requirement in this area increased after Electronic City established itself as an IT Hub in this micro-market. However, it did not attract premium residential developments due to poor urban and social infrastructure.
=> Demand drive in South Bangalore:
South Bangalore is close to major work centres along the ORR and is primarily classified as an upper middle-class residential catchment. It has potential for further augmentation of existing physical and social infrastructure. Over the past few years, the Southern suburbs have witnessed a high percentage of appreciation on investments. Amongst the prime residential developments in the Southern suburbs of Bangalore, projects that can be listed are Salarpuria Greenage, SNN Raj Lakeview, Purva Highlands and Sobha Forest View.
3) East Bangalore:
Whitefield as a micro-market has developed into a self-sustaining area. Along with being an IT destination, this area has good social infrastructure and developing physical infrastructure. Hence, the demand for luxury residential developments remains high. Adarsh Palm Meadows, Prestige White Meadows, Chaithanya Sharan, Windmills of Your Mind are some of the luxury projects in this market.
=> Demand drive in East Bangalore:
Eastern Bangalore is characterized by major work centres like Whitefield, the EPIP Zone which has escalated the development of residential apartments over the past few years. Many mid-scale residential projects like Brigade Cosmopolis, Brigade Lakefront, Sobha Habitech and UKN Belvista have been launched in this area. These areas are self-sufficient in terms of social and physical infrastructure as well, which is of prime importance for residential development.
4) West Bangalore:
This micro-market has not been successful in attracting many real estate developers as it fails on the count of good social infrastructure. It is mainly dominated by industrial developments and has seen hardly any developments in high-end residential developments.
=> Demand drive in West Bangalore:
West Bangalore is characterized by a low social profile and industrial surroundings. Also, being located away from the major IT-ITES corridors, it shows less potential for real estate growth. Although it has high availability of land for real estate development, the demand is substantially low in this part of Bangalore. Further development of the Metro in the near future might boost the development of mid-segment residential apartments in this area. At present, one of the prominent residential projects in this area is Purva Sunflower.
Factors Influencing Appreciation:
The following are the factors influencing the capital appreciation and rental potential in Bangalore:
Growth in the IT Industry and a rapidly increasing number of High Net-Worth Individuals, and movement of expatriates.
The proposed infrastructure by the Government (Peripheral Ring Road, Metro Rail, Signal Free ORR, High Speed Rail Link, Mono Rail, Elevated Expressway).
The proposed SEZ and IT parks in North Bangalore. (ITIR in Devanhalli, Aerospace SEZ, Devanhalli Business Park, Airport city).
Credit's on information to: Economicalproperty , NRI assets management , Assetsinfini property solutions.
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