Real Estatemarketreport

Bangalore: Real Estate Market Report
November 2013
Office | Residential | Retail | Hospitality
An ISO 9001:2008 Certified Company
A REPORT BY STRATEGIC ADVISORY GROUP
BANGALORE REAL ESTATE: 2013 AND BEYOND
OFFICE
112
million sqft stock
5.7 million sqft absorbed in H1 2013
Y-O-Y growth in absorption:
(including 2 million sqft of pre-committed space)
8%
Average Annual Rental Appreciation (2012 -13):
40,336
units launched in 2012
33,988
RESIDENTIAL
0 - 8%
units absorbed in 2012
Grown at a CAGR of
26,620
units launched in H1 2013
18,076
since year 2010
units absorbed in H1 2013
Annual Price Appreciation (2012-13):
BANGALORE: REAL ESTATE MARKET REPORT
31%
5% - 25%
RETAIL
7.7
0.78
million sqft expected

to enter in 2013 (of which 0.35 million
sqft is pre-committed)
million sqft stock
Grown at a CAGR of
12%
since year 2010
Average Annual Rental Appreciation (2012 -13):
5% - 20%
HOSPITALITY
9,585
total number of existing hotel rooms
5,190
rooms likely to enter by 2017
56% - 59%
average occupancy rate
EXECUTIVE SUMMARY
During the last two decades Bangalore gained prominence as a
growth corridor in India on account of rapid development of the

IT/ITeS sector. Going forward, in addition to the IT/ITeS sector
other sectors such as biotechnology, automobile, aviation and
textiles are anticipated to strengthen the citys economy.
Bangalore witnessed a decadal population growth rate of 47%

and today, the city is the fifth largest urban agglomeration in the
country with a population of 9.6 million. A growing base of young
professionals with rising disposable incomes and substantial
global exposure has provided an immense opportunity for
development across the real estate segment.
The citys infrastructure is being constantly upgraded with
In the last two decades, real estate development in Bangalore

was focussed towards the southern and eastern corridors until
the city's International Airport became operational in 2008. Since
then, the real estate development migrated towards the north
quadrant of the city. In the past two years, areas in Bangalore
West especially Tumkur Road and its neighboring locations have
gained momentum due to availability of large land parcels and
improved connectivity. Currently, the most promising areas for
real estate development are the North - West region,
Kanakapura Road towards South and Old Madras Road towards
the North - East.
The city is poised for large supply in retail sector in the coming
years. The rentals have registered an annual appreciation of 5 %
- 20% in shopping malls and 4% - 13% in high street locations.
Most of the operational space is concentrated in SBD and PBD
locations. With 5.65 million sqft of mall space under-construction,
the city will have 13.30 million sqft of operational mall space by
2016. The city lacks specialty malls focusing exclusively on sale
of themed merchandise. The most promising locations for future
development are ORR-Sarjapur stretch, Old Madras Road and
Kanakapura Road.
projects like the Metro Rail, Elevated Road to the Airport and the
Signal-free ORR. Planned projects namely PRR, High Speed
Rail to the airport and Monorail are further expected to ease the
transport within the city. Despite the above mentioned
improvements, Bangalore faces two prominent challenges provision of infrastructure to match the pace of population growth
and provision of adequate water & electricity.
Bangalores residential sector continues to remain strong in

H12013. The city witnessed fresh supply of 26,620 units in H1
2013 and 18,076 units were absorbed during the same period.
The most vibrant micro-markets include Whitefield, ORR
(Hebbal to Silk Board Junction), Sarjapur Road and Bangalore
North. The sector registered CAGR of 31% during 2010 and
2012 with national and international players like Arvind Real
Estate, Address Makers by India REIT, Phoenix Group, Bhartiya
Group and Penninsula Land Limited progressively venturing into
the sector. Further, Private Equity players are also investing in
this sector.
Hospitality sector is likely to witness entry of 3,793 rooms in next

3 years. The current inventory is dominated by the 4 and 5 star
category projects and the same is likely to continue in the
coming years. Apart from CBD- Whitefield, ORR and Bangalore
North are potential locations for development. Currently, national
and international operators are keen to operate 3 star business
hotels across the city.
Overall, Bangalore has great growth potential for real estate

development across different segments.
Bangalores non-captive office space registered an absorption of

5.7 million sqft in H1 2013 including 2 million sqft of
precommitments. According to our estimate, Bangalore will
absorb nearly 9 million sqft by end of 2013 and ORR will remain
the most attractive micro-market for the next 3 to 5 years. Post
revision of SEZ regulation, many SEZ Parks are likely to witness
mixed developments owing to high residential demand.
BANGALORE GROWTH STORY
The modern metropolis Bangalore scores over many other Indian cities for various reasons: salubrious
climate, cosmopolitanism and growing knowledge economy.
Real Estate emerged as a major player in the economic growth

of the city during the last three decades. The key reasons that
supported the rapid development of Real Estate Sector in
Bangalore are:
Table: Bangalore - Demographic Snapshot

Bangalore - Area and Population Growth
Growth in the IT/ITeS industry that led to creation of large
Area: Bangalore City Corporation (sq km)
741
number of jobs across sectors which in turn led to migration

of working population to the city.
Area: Bangalore Metropolitan Area (sq km)
1,2761
Total Population (Bangalore City Corporation)2
Today close to 2,840 IT/ITeS companies including at least
100 Fortune 500 companies operate out of Bangalore.

The city today employs nearly 0.95 million people and
creates nearly 90,0003 new jobs annually.
Total Population (Bangalore Metropolitan Area)

Decadal growth rate of population (2001 - 11)
8.5 million
2
9.6 million
47%
The multiplier effect of this has led to a real estate boom
and a flourishing retail and entertainment industry. The

city is also sufficiently supported by the hospitality
industry with accommodation ranging from budget
segment to 5 Star luxury segments.
The working population in the city is educated, multi-cultural

and young with the median age being 28 years.
The growth in the IT/ITeS sector has been well supported
by the growth in the per-capita income of the city.

Bangalores per-capita income in 2011 - 12 was INR
237,0004, much higher than Indias per capita income of
INR 5,1305 for the same period. According to McKinsey,
by 2030 the city will have highest per-capita GDP in India.
Rising income levels, education and global exposure
have contributed to the evolution in the living standards of

the city.
Figure: Growth of Bangalore City & its Population

16
800
Entry of Multi-National Corporations (MNCs) in office,
700
hospitality, retail and residential sectors.
8
600
The city witnessed entry of various MNCs like Texas
Advancements in the IT/ITeS industry led to entry of
many other national and international developers in the

city. Key examples being the Ascendas Group
developing International Tech Park Bangalore (ITPB) in
Whitefield, Sun Forest City investing in the Aerospace
Park in Devanahalli. The residential sector saw the Tata
Group, DLF, Godrej Properties and Phoenix Group
expanding their portfolio in the city while international
hotel brands like Sheraton, Hilton Group, Radisson, Ritz
Carlton, Hyatt and Marriott entered the city. Bangalore
today, is also the most sought after retail destination in
the country followed by Mumbai and Delhi.
Area (sqkm)
Instruments, IBM, Intel, Motorola, Dell and Microsoft,

which provided the required thrust for development of
the residential and business infrastructure.
500
400
5
4
300
3
200
100
0
1950
1963
1969
Area (sqkm)
1979
1995
2007
2013
Population (in millions)
Revised Master Plan - 2007and Bangalore Development Authority (BDA)

Population has been sourced from Revised Master Plan - 2007 and Census of India, 2011
Working population has been arrived at using occupant load of 100 sqft of floor area per person for commercial buildings as per National Building Code (NBC) 2005
4
Market Skyline of India 2012 - Indicus Analytics, New Delhi India
5
Central Statistics Office
10
in millions
16
ECONOMY
Currently Bangalores economy is driven by the IT/ITeS sector. Other major sectors that contribute to the
citys economy include biotechnology, automobile, aviation and textile industries.
Apart from the IT/ITeS sector, Bangalore also accounts for close
to 60% of all Biotech companies in India and 50% of the total

revenues at national level.
Automotive majors like Volvo, Toyota, Honda, Mahindra and

Bosch have their presence in Bangalore.
Bangalore is home to some of the best R&D facilities in aerospace

& defense sector like ISRO, DRDO, Airbus Engineering Center,
Boeing Research & Technology Center. Apart from being the
base for most global players, Bangalore also accounts for
production of more than 25% of Indias aircraft and space craft.
Karnataka contributes to over 20% of national garment

production and 45% of the total raw silk production in India. The
garment sector employs close to 500,0006 people in Bangalore
with leading manufacturers like Tommy Hilfiger, Marks & Spencer,
GAP, H&M, Matalan and Mothercare having their presence in the
city.
With multiple economic activities, the city has grown from a uni-nuclear structure with a Central Business
District (CBD) to a multi-nuclear structure with several Suburban Business Districts and Peripheral
Business Districts (PBD).
Table: IT/ITeS Micro-markets in Bangalore
IT/ITeS Hubs
PBD
ORR (Hebbal to Silk
CBD & SBD
Whitefield
Board Jn.)
Electronics City &

Hosur Road
Bangalore North &

Mysore Road
Type / Sector
Corporate offices,
BFSI, IT / ITeS
IT / ITeS
IT / ITeS
IT / ITeS, Electronics,
Manufacturing
IT / ITeS, Aerospace
Total Office Stock

(in million sqft)
39.6
29.5
29
10.41
3.67
Working population
400,000
250,000
275,000
175,000
35,000
Projected Growth
10%
27%
10%
5%
5%
GE, SAP Labs,

TCS, HP, Dell,
Mercedes Benz,
Huawei
Infosys, Wipro,
Siemens, Mahindra
Satyam, TCS
Shell Technologies, SLK

Software, Tyco
Electricals, Wipro
Key Operating Companies
Microsoft, Dell,
Goldman Sachs, IBM,
Target, Google, Yahoo,
Amazon
Cisco, EMC , Capgemini,

Oracle, Intel, Accenture,
IBM, Cognizant,
Honeywell
The city being an important industrial town has significant presence of manufacturing, automobile and
textile companies.
Table: Industrial Areas of Bangalore
Industrial Area
Type of Industry
Total Area
(acres)
Key Industries
Growth Plans
Verasandra, Jigani &

Bommasandra Industrial
Area
IT / Manufacturing, Biotech
1,874
OTIS, American Power, KTTM, SKF,

Maine Precision Tools, HCL, Tata
Advanced Material
Phase III - Land acquisition

in progress on Jigani Harohalli Road (~712 acres)
Peenya Industrial
Area
Engineering, Auto Components, Textile,

Electrical Goods Manufacturing
1,485
Wipro Lights, ITC, Kirloskar, Karle,

ABB
Land acquisition of 200

acres for Greater Peenya
industrial area
Narasapura & Hoskote

Industrial Area
Auto & Auto Components

Manufacturing, Warehousing, Textile
1,602
Volvo, GE India, Celebration

Apparels, Autoliv, Indo-US MIM Tech
145 acres in Narasapura

industrial area is under
development
Doddaballapur Industrial
Area
Textile, Beverages
799
Gokaldas Images, Bombay Rayon

Fashions, Gati Limited, Arviva
Industries, Mudra Textiles, Grover
Vineyards
~ 60 acres in Apparel park is

under development
Kumbalgodu Industrial
Area
Auto Components, Food Processing,

Chemical Manufacturing
250
United Breweries, Sumi Motherson,

Wirtgen India, Micro Labs
Bidadi Industrial Area
Automobile & Auto components,

General Manufacturing, Electronics &
Electrical Manufacturing
1,192
Toyota, Coco-Cola, Tata Auto Plastic

Systems, Shashi Exports
Phase III: 400 acres in

planning stage
Harohalli Industrial Area
Granite, Printing, Automobile,

Hatcheries and General Engineering
1,102
Basant Betons, Komarla Hatcheries,

Stovekraft, AO Smith, Lotus
Polymers, Saint Gobain
Phase III: 1,365 acres under

land acquisition stage
Source: Karnataka Industrial Areas Development Board (KIADB) and Vestian Research
Favourable Government regulations and improving infrastructure are expected to promote development in
medium to long term towards Bangalore North.
Government of Karnataka (GoK) has announced the following projects within Bangalore Metropolitan Region in order to promote economic
development in the city.
Table: Key Government Initiatives: Proposed Economic Hubs in Bangalore7
Particulars
Location
Devanahalli
Business Park
Devanahalli Adjacent to BIA
Aerospace
Park
South of BIA
Hardware Park
Bagalur Village
IT / BT Park
Bagalur Village
ITIR
Logistics Park
Integrated
Textile Park
Muddenhall,
Kaniverayanapura,
Chikkaballapur
Balepura (near
Devanahalli)
Doddaballapur
Road
Area (in acres) 414
1,000
941
1,028
12,000
150
469
Agency
Karnataka State
Industrial &
Infrastructure
Development
Corporation
(KSIIDC).
Department of
Commerce &
Industries, GoK
GoK - Hardware
Park,
IFCI - Financial
City
Karnataka
Industrial Areas
Development
Board (KIADB)
Karnataka State
Electronics
Development
Corporation
Limited
(KEONICS)
KSIIDC
KIADB
Status
Fresh EOI invited

in August 2011 to
develop the
project on a PPP
basis. Design for
the convention
center within the
park has been
finalized
Land has been

alloted to some
companies
already.
BEML has started
construction.
Land has been

alloted to some
companies
already.
Foundation stone
laid for the
Financial city on
50 acres to be
developed by IFIC
Application
received from
various
companies to
develop IT/ITeS
SEZs. Land yet
to be alloted.
The Center has

Land aqusition is
approved the
underway
project. Land
acquisition
underway for 2,200
- acres of phase I.
Global tender yet to
be floated to select
the developer
Currently 41 units
are operational
across 48-acres
of land. Nearly
60-acres of land
under
development
BEML, AIMIL,
Dynamatic
Technologies,
Sunshine
Aerospace,
Starrag Seckert
Machine Tools,
Centum
Electronics
Bangalore BioSunlux
Tech labs, Shell
Technology
Technology, Moser
Baer
55 companies
including Infosys,
Wipro, TCS and
Cognizant have
signed up MOUs
Gokuldas
Images, Madura
Garments,
Raymonds,
Bombay Rayon
Fashion
Companies
that have
been alloted
land
Vestian Research
PLANNING & DEVELOPMENT
Currently majority of the real estate development

in Bangalore is within the Bangalore
Metropolitan Area (BMA 1,276 sqkm) under the
jurisdiction of Bangalore Development Authority
(BDA). However, with the development of various
under-construction and proposed infrastructure
projects in the Bangalore Metropolitan Region
(8,000 sqkm) under the jurisdiction of Bangalore
Metropolitan Regional Development Authority
(BMRDA), several new growth corridors have
emerged outside the BMA.
Some of these emerging growth corridors include:
Bangalore-Devanahalli corridor due to the development of

Bangalore International Airport (BIA) in Devanahalli.
Bangalore-Doddaballapur Corridor with the development of

Doddaballapur Industrial area and its proximity to BIA.
Bangalore-Nelemangala-Tumkur corridor in North-West with

the development of industrial areas in Peenya, Nelemangala
and Dobaspet and the announcement of Bangalore-Chennai
Industrial corridor.
KR Puram-Hoskote Corridor with the development of industrial

areas in Hoskote and Narsapura.
Hoskote-Malur-Sarjapur-Attibele corridor with industrial

development in this region; announcement of Bangalore Chennai Industrial corridor and proximity to Electronics City.
Bangalore-Mysore corridor was looked at as an emerging

corridor till 2008. However, with the Bangalore-Mysore
Expressway and the associated townships failing to take off,
this region has seen a decrease in activity levels.
BDA has currently embarked upon the process of

preparing the revised master plan for 2031. The
recommendations of the Structural Plan 2031
prepared by BMRDA will play a major role in
developing the RMP 2031 for Bangalore.
The Revised Master Plan (RMP) 2031 has faced challenges while
implementing the proposed infrastructure development & economic
plans in terms of land acquisition issues, lack of funding, water shortage
and complex institutional mechanism. Key proposals of the Structural
Plan 2031 include:
A cluster based approach for development of the region identifying 8

clusters and 4 growth nodes in order to decongest the core.
The identified clusters include Ramanagaram-Channapatna,

Bidadi-Harohalli, Nelamangala-Peenya, Dobaspete-Nelamangala,
Doddaballapur, Devanahalli-Yelahanka, Hoskote-KR Puram,
Jigani-Electronics City-Bommasandra-Attibele.
Growth Nodes include: Anekal, Kanakapura, Vijayapura, Magadi.

These clusters are connected by the Peripheral Ring Road (PRR),
Intermediate Ring Road (ITRR) and the Satellite Town Ring Road
(STRR).
Commuter Rail Services to key towns within the Bangalore

Metropolitan Region (BMR).
Figure: Key on-going and proposed infrastructure projects in Bangalore
Do
Towards
Doddaballapur
Industrial Area
dd
NH 7: To Hyderabad
ab
a lla
pu
ain
rM
Ro
ad
Bangalore International Airport
Be
ll
ar
yR
oa
Rajanukunte
ed
Pe
rip
he
ra
lR
in
Ro
ad
Yelahanka
os
Pr
Pr
op
op
os
ed
NH 4: To Mumbai
Pe
rip
Jalahalli
Tum
kur
BIEC
Ro
ad
he
Sahakara
Nagar
ra
Thannisandra
lR
in
Ro
Budigere
ad
HMT Township
Hennur
Hebbal
Hesaraghatta
Cross
ing Roa
Avalahalli
NICE R
IISC
HBR Layout
Nagawara
RMV
Extension
Out
er R
ing
Palace
Grounds
Roa
d
Roa
ras
Seegehalli
gR
ITI
Rin
Banaswadi
Krishnarajapuram
Hope Farm Circle
Ou
ter
efield
Main
Roa
Whit
Rajaji Nagar
Byppanahalli
M
M
MG Road
M
Majestic
C.V.Raman Nagar
Indiranagar
Bangalore City
Railway Station
Vijayanagar
ai
enn
Ch
Mad
Old
Magadi Road
oa
NH
o
4: T
Old Airport
Brookefield
Road
Varthur Road
Marathahalli
Varthur
Mysore Road
Jayanagar
Koramangala
r
ute
re
yso
ng
Ri
Ro
Bellandur
J.P. Nagar
d
oa
Proposed Peripheral
Ring Road
ad
Bangalore
University
HSR Layout
Silk Board
Kengeri
Puttenahalli
Sa
rja
Haralur
Jaraganahalli
IIMB
pu
rR
Hosa Road
oa
Begur
CE
NI
Dommasandra
Arkere
Kothnur
ng
Ri
M
Thalagattapura
M
Gottigere
ad
Bommasandra
Bannerghatta Road
NICE Ring Ro
Kanak
a
pura R
oad
oa
Electronics City
ur
os
ad
Ro
SH 17:
To Mysore
NH 7: To Salem
NH 209: To Coimbatore
Major Roads
Metro Rail Phase I (Operational)
Outer Ring Road
Metro Rail Phase I (Under Construction)
NICE Ring Road
Metro Rail Phase II (Proposed)
Proposed Monorail
Proposed Peripheral Ring Road

Major Landmarks
Bellary Elevated Express way
Key Residential Areas

Proposed High Speed Rail Link
M
Key Metro Stations
INFRASTRUCTURE PROJECTS
The development of urban infrastructure in Bangalore has not been able to keep pace with the rapid
population growth and economic development of the city.
Table: On-going & proposed infrastructure projects in Bangalore
Project
The proposed mass rapid system
for Bangalore 41 km of elevated
Phase 1 and underground rail network with
36 stations in Phase I
Bangalore
Metroa
Details
Timeline
Status
North-South Corridor: Hesarghatta Cross

(Peenya Industrial area) to Banashankari
via Malleswaram, Majestic and Jayanagar.
East-West Corridor: Bypanahalli - Mysore
Road via Indiranagar, M.G.Road, Majestic
and Vijayanagar.
Phase I
to be fully
operation
al by
2015.
Under
construction
(Phase I under
construction
& Reach 1
operational)
Phase II: Extension of Phase 1 lines connecting Whitefield (in the East), JP Nagar
Phase 2 (in the South), Kengeri (to the West) and Nelamangala (to the North).
In addition, two new lines, one connecting Nagawara to Gottigere and the other
connecting BTM Layout to Bommasandra has been proposed.
Monorailb
High Speed Rail

Linkc
Peripheral Ring
Roadd
Project will act as a feeder network

to the metro rail. Four corridors
have been identified covering 60
km.
Corridor I:Kanakapura Road - Mysore

Road,Kathriguppe - National College
Corridor II:Bannerghatta National Park Adugodi
Corridor III:Tumkur Road - Bellary Road
Corridor IV:Mysore Road - Tumkur Road,
Magadi Road - Toll gate
The High Speed Rail will connect

the CBD with the Bangalore
International Airport in Devenahalli.
The project will cover a distance of 34 km

starting from BRV Grounds, passing
through Cubbon Road, Raj Bhavan Road,
Hebbal and Yelahanka to the Airport
The Peripheral Ring Road is a

Public Private Partnership (PPP)
project to be executed by the BDA.
This ring road will circumnavigate
the city connecting all the major
highways.
NICE Ring Road connecting Hosur Road

and Tumkur Road has been declared as
Phase 1 of PRR.
Bellary Elevated
Expressway
A six-lane elevated expressway is

proposed to connect Hebbal to
Yelahanka. A ten-lane (6 lanes with
two services lanes on either side)
highway will connect Yelahanka to
Bangalore International Airport.
Signal Free Outer

Ring Road
Phase 2 of the Ring Road will connect

Tumkur Road, Bellary Road, Old Madras
Road, Sarjapur Road and Hosur Road.
Hebbal to Yelahanka and Yelahanka to

Proposed
(Geo-technical
survey is under
progress)
Impact
Better connectivity
from all parts of the
city to the CBD
Travel time
reduction
Formal
approval for
the project is
awaited
Better access to
Metrorail network
Better connectivity
from peripheral
areas to the city
Proposed
Improved
connectivity
between CBD and
International Airport
Proposed Tenders
invited for
(30
Phase 2
months
from the
start of
construction)
Diversion of truck
traffic from the city
roads will ease
traffic situation on
ORR and within the
city. Second, will
open up new areas
for development
2014 (E)
Under
Construction
Better and faster

connectivity to the
International Airport
The existing Outer Ring Road will be Hosur to Silk Board Junction
made signal free with the construction
of 7 more flyovers and an underpass
2014 (E)
Under
Construction
Traffic
decongestion and
reduced travel time
to key IT hubs
Expansion of
Bangalore
International
Airporte
Expansion of Terminal 1 to double its capacity. To be increased to over 17 million

passengers a year.
2014 (E)
Under
Construction
To increase
passenger and
aircraft handling
capacity
BMRDA Satellite
Townshipsf
Five townships proposed at Bidadi, Ramanagaram, Solur, Sathanur and Nandagudi.

Total area: 61,000 acres
Proposed
Expansion of
Bangalore city and
formation of new
peripheral locations
Proposed
Will open new

areas for Real
Estate development
Proposed
Ease traffic
congestion in
Greater Bangalore
Region and spur
Real Estate
activities
Satellite Town Ring 8 lane road connecting the proposal BMRDA satellite townships. Will connect the
satellite towns of Doddaballapur, Devanahalli, Hoskote, Anekal, Kanakapura,
Road(STRR)g
Ramanagaram and Magadi with each other and also to the Bangalore International
Airports
Intermediate Ring
Road(ITRR)h
8 lane road around the Bangalore Metropolitan region. Will come up in-between
Peripheral Ring Road and Satellite Town Ring Road. Will pass through
Nelamangala, the southern parts of Dobbspet, Doddaballapur and Devanahalli,
areas about 6 km from International Airport, the eastern parts of Hoskote and
Anekal, besides Harohalli, Bidadi and Magadi.
Expected Completion Time 0 - 3 years
Expected Completion Time 3 - 5 years
www.bmrc.co.in, www.karnataka.com, www.timesofindia.com, www.deccanhearld.com

www.timesofindia.com
www.ksiidc.com/tender.html, www.projectsmonitor.com/detailnews.asp?newsid=15665
d
www.deccanchronicle.com, 13 Feb 2013
Expected Completion Time more than 5 years
www.bengaluruairport.com
www.bmrda.kar.nic.in
www.timesofindia.com
f-g
10
REAL ESTATE MARKET SUMMARY
The real estate sector in Bangalore, one of the 8 largest Technology Innovation Clusters , will continue its
growth trajectory in future as well.
Bangalore continues to be one of the best cities for real estate

sector in the country-absorbing close to 1/3rd of the total
office space of the country. Since 2009, the city witnessed an
average annual absorption in the range of 7.5 and 9 million
sqft. With a total absorption (including pre-commitments) of
5.7 million sqft for H1 2013, the city is expected to achieve
similar statistics this year as well.
OFFICE
Citys real estate market witnessed sustained traction for SEZ

spaces in H1 2013; however, a large part of the planned supply
is not likely to materialize due to restricted time limit until March
31, 2014.
Office rentals across micro-markets largely remained unaltered

during H1 2013.
Economic outlook for the city remains strong in medium term as

many large IT/ITeS companies, Engineering and Automobile
MNCs have impending growth plans for Bangalore.
Office space take-up in Whitefield during 2012 - 13 was

mainly due to expansion and consolidation by existing
companies in this micro-market. Schneider Electric, TCS and
Societe General are prominent companies that have
expanded operations in the city.
Healthy office space absorption and on-going infrastructure
Bangalore witnessed a launch of 40,336 units in the year

2012 and absorption in the same year stood at 33,988 units.
H1 2013 witnessed a launch of nearly 26,620 units and
absorption during the same period stood at 18,076 units.
Apartments and villas are the key established residential

product types in Bangalore. 2012 saw Villaments gaining
prominence as a product type since it offers the best of both
apartments and villas. Leading developers like Habitat
Ventures, Nitesh Estates, Embassy Group have launched
villament projects in the city.
Capital Values for residential projects witnessed an increase

in the range of 5% - 25% across micro-markets. Among micromarkets- Tumkur Road, ORR-Sarjapur Stretch and Whitefield
observed the highest appreciation.
Bangalore remained one of the favoured real estate markets

for Private Equity Funds resulting in their sizeable
participation in this asset class. Besides residential asset
class, commercial asset class also witnessed large
investments by PE funds during the last one and half year.
In 2012-13, Bangalore witnessed entry of national

developers like Phoenix Group and the Address Makers by
India REIT.
Currently the most active residential micro-markets of the city

are ORR-Sarjapur stretch, Whitefield and Bangalore North.
Off-central location of Magadi Road is witnessing renewed
interest due to the availability of industrial land for
redevelopment in the inner ring city.
Sky Villas, duplex apartments with large terrace spaces, is

another new concept introduced in the luxury segment.
Although this concept was prevalent in Mumbai, it has recently
gained prominence in Bangalore with the launch of luxury
apartments in off-central regions.
projects have fuelled residential demand in the city.

Absorption of residential units has grown at a CAGR of 31%
since the year 2010.
RESIDENTIAL
Bangalore North witnessed increased momentum during H1

2013 with manufacturing and aerospace companies like Wipro
Systems & Controls and Starrag Heckert commencing
operations in this region.
Among all the micro-markets, ORR continues to remain the

most preferred market for expansion by IT/ITeS companies
mainly due to availability of Grade A office spaces and
support infrastructure. Honeywell Technologies, Volvo,
Goldman Sachs and Adobe have expanded and / or
consolidated their operations along ORR in the last two
years.
As per Massachusetts Institute of Technology (MIT), Technology Review
Strong economic outlook is likely to propel healthy growth rate

in residential segment.
Favourable demographics, opening up of FDI in single and
multi-brand retail and availability of large land parcels have

not only led to increase in mall space over the years but have
also facilitated development of larger malls.
one year. UB City on Vittal Mallya Road witnessed highest

appreciation in rentals due to lack of luxury spaces in the city.
The Forum at Koramangala and Garuda Mall at Magrath
Road also witnessed significant appreciation in the last one
year.
Bangalore with 7.7 million sqft of operational mall space will

see completion of 5.7 million sqft of mall space by the year
2016.
Based on the existing, under-construction and planned malls,
RETAIL
Some of the national and international brands that entered
Due to relaxation of FDI norms for both single and multi-brand

retail, the retail sector in Bangalore is posed to grow in the
coming years.
Continuous expansion of the city limits have led to availability

of large mills / industrial land for redevelopment.
Development of mixed-use integrated townships
encompassing office, retail, residential and hotels has gained
prominence over the years.
Bangalores hospitality sector is primarily driven by the

IT/ITeS sector with business travelers accounting for majority
of the room occupancy as compared to MICE and leisure
travelers. The city today has 9,585 rooms and 1,157 rooms
are expected to enter by Q1 2014.
HOSPITALITY
Bangalore in 2012 - 13 are Krispy Kreme, Promod, Aldo,

Charles and Keith and Debenhams.
High-street locations over the last one year witnessed lesser

appreciation as compared to shopping malls. Rentals across
the locations grew in the range of 5 - 12%. Among the highstreet locations, Vittal Mallya Road, which is a key high street
location for luxury brands, witnessed a significant increase in
rental value over H1 2012 due to limited supply of retail space
for luxury spaces. Other high-street locations that witnessed
growth in rental values included Kammanahalli Main Road
and M.G. Road.
Kanakapura Road, Bannerghatta Road, Mysore Road, Hosur

Road and Tumkur Road are in a balanced state in terms of
mall development vis--vis residential activity. ORR-Sarjapur
stretch is one of the most promising locations for
development of a shopping mall in short term while Whitefield
due to high under trading mall spaces offers less advantage.
Mall rentals have appreciated in the range of 5 - 20% in last
Occupancy levels in the city range between 56% and 59%.
Bangalore is increasingly witnessing development of hotels

as a part of mixed use developments with residential,
commercial, retail and hospitality in the same project.
The city today has potential for development of serviced

apartments and branded 3 Star category hotels.
Whitefield, ORR-Sarjapur Stretch, Bangalore North and

Tumkur Road are among the most preferred locations by
hotel operators.
Bangalore will continue to see entry of 4 and 5 Star Category

hotels as most of the under-construction hotels expected to
be operational in medium term are positioned in these
categories.
Currently the most sought after development model in

Bangalore is the management contract, wherein the landlord
undertakes the land acquisition, construction and fit-out of the
hotel and the hotel operator manages the operations.
Currently the hotel industry is dominated by 5 Star Category

Hotels. Nearly 42% of the total operational rooms fall under
this category. After 2008, the city started witnessing entry of
many branded budget hotel operators. Some of the key
operators in the city are IBIS by Accor Group, Keys Hotel by
Berggruen Hotels and Ginger by Tata Group.
In light of the upcoming developments in the IT/ITeS sector

and under-construction rooms, demand for hotels is
expected to remain unchanged in the short to medium term.
Room rates for the 5 Star category ranges between INR

7,000 - 8,500 per night while they range between inr 45005500 per night for the 4star category.
12
OFFICE MARKET OVERVIEW
112 million sqft

Total office stock in Bangalore
7.13 million sqft

Supply in 2012 out of which 3.3 million sqft was SEZ
8.39 million sqft

office space absorption in 2012 out of which
2.25 million sqft was SEZ
4.2 million sqft
of fresh supply in H1 2013
5.7 million sqft of absorption in H1 2013 including

2.0 million sqft of pre-commitment
16% overall vacancy level in Bangalore
Source: Vestian Research, 2012
Bangalore continues to witness steady office space demand since 2009 and absorption exceeded supply
for the third consecutive year since 2010.
Figure: Bangalore's Office Space Supply and Absorption
Since 2009, Bangalore witnessed an average annual

absorption in the range of 7.5 and 9.0 million sqft.
16
16
H1 2013 witnessed absorption of 5.7 million sqft of office

space while fresh supply stood at 4.2 million sqft. Of the total
absorption in H1 2013, 2.0 million sqft of the space was precommitted.
14
Absorption in the city has exceeded for the third consecutive
10
year since 2010. Cautious approach adopted by the

developers has led to controlled supply and precommitment activities have helped to maintain demandsupply equilibrium in Bangalores office space market in
2012.
Vestian Estimate
12
million sqft
8
6
4
2
0
2009
2010
2011
Fresh supply
2012
2013(E)
2014(E)
Absorption
14
Table: Bangalore Office Space Statistics H1 2013
Non-Captive Space (in million Sqft/Month)

Micro-Location
Non SEZ
Grade A
SEZ
Grade A
Non SEZ
Grade B
Captive Space (in million Sqft)

Total
Non SEZ
Total
SEZ
CBD
Operational Space
7.52
4.35
11.87
0.70
0.70
Under-Construction Space
134
0.1
1.44
0.00
Pre-committed Space
Available Space
0.70
0.92
1.62
Planned Space
0.10
0.10
SBD
Operational Space
22.2
5.56
27.76
1.3
1.3
1.68
1.68
Pre-committed Space
0.03
0.03
Available Space
1.20
1.3
2.50
Planned Space
0.70
0.70
1.7
1.7
ORR
Operational Space
12.84
16.40
0.25
29.49
2.25
2.25
8.94
5.50
14.44
0.45
0.45
Pre-committed Space
0.24
0.84
1.08
Available Space
2.51
0.78
0.06
3.35
Planned Space
37.33
10.36
47.69
1.0
2.5
3.5
Operational Space
17.77
4.66
6.61
29.04
10.5
0.2
10.7
0.71
0.96
1.67
4.1
4.1
PBD
Whitefield
Pre-committed Space
0.20
0.20
Available Space
4.46
1.04
1.89
7.39
Planned Space
5.41
15.22
20.63
2.5
1.1
3.6
Hosur Road & Electronic

City
Operational Space
8.00
2.41
10.41
13.1
5.1
18.2
1.70
1.70
Available Space
2.37
1.09
3.46
Planned Space
0.40
3.0
3.40
1.1
5.1
3.20
0.08
3.28
Pre-committed Space
Mysore Road
Operational Space
Pre-committed Space
Available Space
0.13
0.05
0.18
Planned Space
3.50
3.50
Bangalore North
Operational Space
0.35
0.04
0.39
2.04
2.04
Pre-committed Space
0.10
0.10
Available Space
0.02
0.09
0.11
Planned Space
19.20
3.80
23.03
ORR, for the next 3 - 5 years is expected to remain a preferred destination among IT / ITeS occupiers while
Bangalore North is anticipated to gain momentum by 2015.
The city accounts for 112 million sqft of operational non-captive

office space. The micro-markets Outer Ring Road (ORR) and
Whitefield in PBD dominate the office space market with almost
an equal share of 30% each amongst all others. Though,
Electronics City in PBD accounts for a mere 8% of non-captive
office space, this micro-market has significant presence of
captive campuses. CBD and SBD locations continue to attract
occupiers however availability of land is a deterrent.
Vacancy levels in the city range between 9% and 14%. However,
ORR today accounts for nearly 30 million sqft of operational
IT/ITeS spaces. ORR witnessed the largest supply of office

space in Bangalore accounting for nearly 56% of the city's new
supply for 2012. Further, this micro-market also witnessed 42%
of absorption during 2012 and H1 2013.
Shell Technologies is developing its Research and

Development (R&D) unit in Bangalore Hardware Park. The
40-acre campus will have built-up area of nearly 2.5 million
sqft.
Tyco Electronics is setting-up a manufacturing unit spread
across 25-acres in Aerospace Park, Devanahalli.
ORR will continue to remain a preferred destination by IT/ITeS
Bangalore North witnessed first major office space transaction in

H1 2013; SLK Software leased 0.2 million sqft of office space in
RMZ Latitude on Bellary Road. The region is likely to see
completion of nearly 2 million sqft of office space by the end of
2014. Key developers with presence in this location include
Assetz, RMZ Corp, Embassy Group, Salapuria Sattva, Brigade
Group, Hinduja Developers and Gokaldas Images.
Bangalore West is likely to see development of mixed use

townships. Apart from existing project by Brigade World Trade
Centre, Tata Realty & Infrastructure Limited is expected to
develop one of its flagship projects in this area. The integrated
township is spread over 1.7 million sq ft in Yeshwantpur.
Today, Whitefield has 29 million sqft of operational IT/ITeS office

(non-captive) space of which nearly 7.4 million sqft is vacant.
Existing companies in Whitefield are consolidating and
expanding their operations within the region. Some of the
companies that have expanded their operations are Schneider
Electric (0.5 million sqft) and TCS (0.3 million sqft).
Figure: Stock Vs Absorption and Vacancy Levels across Bangalore

micro-markets
Electronics City, a 680-acre electronics park is phased in three
50
phases. Phase I (332-acre) and Phase II (148-acre) in total

account for 8.6 million sqft of non-captive office spaces. Both
these phases have IT/ITeS, electronics and hardware
manufacturing companies. Infosys, TCS, HCL and Wipro have
their captive campuses in this region. Electronics City Phase III
(100-acres) is anticipated to be established as Biotech Hub.
30%
45
26%
16
16
40
35
25%
20%
30
million sqft
Bangalore North has seen a higher preference for a built-to-suit

campuses over leased office spaces. Some of the prominent
companies developing their facility are:
companies in medium term mainly because of availability of

Grade A office space, land for expansion and required support
infrastructure. Some of the prominent IT occupiers namely
Goldman Sachs (1.6 million sqft), Adobe (1.43 million sqft),
Honeywell Technologies (1.0 million sqft) and Samsung (0.45
million sqft) have expanded their base in this micro-market.
Volvo is developing its captive campus in this micro-market; the
company has bought 1 million sqft of office space in Bagmane
World Technology Centre. Apart from Volvo, Intel and Cisco are
also expanding their captive campuses along ORR.
Bangalore North, until 2013, witnessed activity from

manufacturing and aerospace companies. Wipro Systems and
Controls (SEZ) and Starrag Heckert have commenced their
operations in Bangalore Hardware Park.
PBD locations account for a high vacancy level of 26%. This may
be attributed to the presence of large number of Grade B / B+
developments in these micro-markets with limited amenities as
compared to Grade A developments.
Office space in Mysore Road is restricted to Global Village Tech

Park. The IT/ITeS SEZ has close to 3.2 million sqft of operational
IT space. Accenture (0.9 million sqft) and Mindtree Technologies
(0.5 million sqft) are among the key companies that have
expanded their operations in this region.
15%
25
14%
20
11%
10%
9%
15
Vacancy (%)
10
5%
5
0
0
CBD
SBD
Stock
ORR
Absorption
PBD
Vacancy
16
The city continued to witness sustained traction for IT SEZ spaces mainly along ORR and Whitefield in PBD.
Figure: SEZ Supply and Absorption in Bangalore
Bangalore has 24.3 million sqft of operational multi-tenanted

IT/ITeS Special Economic Zones (SEZs) space. Of this, ORR
accounts for nearly 16.4 million sqft while PBD locations of
Whitefield and Mysore Road account for the remaining 7.9
million sqft of SEZ spaces.
35
30
Year 2012 and H1 2013 witnessed absorption of 2.35 and 2.1

million sqft respectively of SEZ spaces. ORR and Whitefield
are the two micro-markets, which have witnessed
considerable SEZ absorption during the last one year. ORR
accounted for nearly 75% of total SEZ absorption and PBD
locations of Whitefield and Mysore Road collectively
accounted for 25%.
million sqft
16
40
25
24.26
35.88
20
15
22.31
10
Some of the major occupiers that leased out space in last two
years are Honeywell Technologies (1.0 million sqft),
Accenture (0.5 million sqft), TCS (0.3 million sqft), Societe
General (0.07), Cognizant Technologies (0.75 million sqft)
and Mu Sigma (0.33 million sqft).
6.46
The Government of India (GoI) has relaxed norms for key

criteria such as minimum land requirement. As a result of the
above revisions, it will be possible for smaller IT companies
to develop their own SEZ units. Also, developers who have
already constructed 100,000 sqm are allowed to utilize the
remaining land for residential purpose.
Operational Space
Annual Supplement 2013 14 to the Foreign Trade Policy 2009 14, released on March 18, 2013
Refers to Delhi NCR, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad and Pune
3.83
Planned Space
Supply
Absorption / Pre-committed Space
Table: Key Revisions in norms for IT / ITeS SEZ9

Particulars
w.e.f April 2013
Before April 2013
Minimum Land
Requirement
10 Hectares
None
Minimum
Built-up Area
100,000 sqm
100,000 sqm for 710 major

cities
50,000 sqm for category B
cities
25,000 sqm for other cities
Exit Policy for

SEZ units
10
1.04
Under-Construction
Space
Currently about 5.15 million sqft of non-captive SEZ space is

under-construction and expected to enter the market before
2014. However, a large part of the planned supply - nearly 31
million sqft of SEZ space is not likely to materialize due to
limited time frame. (As per the draft Direct Tax Code 2010,
units in SEZ spaces have to be operational before March 31,
2014).
None
Transfer of ownership of SEZ

units including sale permitted
2012 - 13 witnessed expansion by major IT/ITeS companies
Year 2012 witnessed absorption 8.39 million sqft of which
Figure: Occupancy Strategy 2012 - H1 2013
nearly 65% was a result of expansion by major companies.

Amazon.com, Intel Technologies, Caterpillar, Capgemini
and Samsung were among the prominent companies that
expanded their operations in the city.
14%
10%
9%
Of the total deals reported during 2012, nearly 20% were

consolidation and relocation deals and 15% were new
entrants to the market. Canadian High Commission, Wells
Fargo were some of the companies that commenced
operations in the city during 2012.
As of H1 2013, IT/ITeS companies continue to expand their

operations in the city. Of the total absorption (including precommitments), 70% of the deals were due to expansion by
major companies and 25% of the transacted space was for
re-location and consolidation of operations. Linkedin
started its operations in Bangalore during H1 2013.
67%
Consolidation
Relocation
Expansion
New Entry
Table: Key Lease Transactions in Bangalore during 2012 & H1 2013
Tenant
Name of the Building
Area Leased (Sqft)
Micro Location
Year of Transaction
Pritech Park
400,000
ORR
2012
Intel Technology
RMZ Ecospace
204,000
ORR
2012
In Mobi
Embassy Tech Square
121,000
ORR
2012
Atos Origin
Gopalan Millenium Towers
125,000
Whitefield
2012
Infosys
JP IT Park
175,000
Eletronics city
2012
Honeywell
RMZ Ecoworld
1,000,000
ORR
2013
Cerner India
Manyata Embassy Business Park
356,000
ORR
2013
Alti Source
Pritech Park
120,000
ORR
2013
Amazon
Brigade WTC
294,000
SBD
2013
Texas Instruments
Bagmane Tech Park
100,000
SBD
2013
NDS
18
Bangalore witnessed limited investments by Private Equity (PE) funds for office space compared to
Mumbai and Delhi NCR since land for development of commercial spaces in the city is allotted by KIADB at
low prices and the availability of pre-commitment loans at low interest rates.
Bangalore witnessed one of the countrys biggest commercial

real estate acquisition deals by the US based Private Equity
fund Blackstone Group. As a part of the deal, Blackstone
purchased stake in a SPV comprising of three commercial
properties (2 in Bangalore and 1 in Pune) totaling over 10
million sqft.
Qatar Investment Authority, a sovereign fund invested in RMZ

Corp with a focus of investing in commercial properties in
Bangalore, Hyderabad, Chennai and Pune.
Table: Key PE deals for office space in Bangalore during 2012 - YTD
Fund
Amount
(INR Cr)
Project
Owner
Blackstone
Embassy
Group
Manyata Embassy
Business Park SEZ
875
Blackstone, GIC
Singapore and
HDFC Property
Fund
Vikas
Telecom
Vrindavan Tech Village
1,951
Baring Private
Equity Partners
RMZ Corp
6 million sqft of office

space
500
Source: www.vccircle.com
Office rental values remained unchanged in most micro-markets during 2012 - H1 2013 owing to controlled
supply and healthy absorption levels. Investors are capitalizing Grade A office spaces between 11% and
13% whereas developers are capitalizing it at 8% to 10%.
Majority of the available Grade A spaces in CBD locations are

fully-furnished mainly due to limited availability of fresh supply in
this micro-market.
Despite healthy absorption and pre-commitment levels, rentals in

the ORR remained unchanged which is a result of huge planned
inventory and large built-to-suit transactions in this micro-market.
Table: Bangalore - Office Rental and Capital Values

Warm Shell Rental Value (INR/sqft/month)
Micro-Location
Grade A
Capital Values (INR/Sqft)
Grade B
Grade A
Non SEZ
SEZ
Non SEZ
80 - 100
60 - 70
9,000 - 12,000
Koranmangala
Indiranagar
Bannerghatta Road
Intermediate Ring Road
Old Airport
50 - 55
45 - 50
35 - 45
70 - 80
6,500 - 8,000
45 - 50
40 - 45
40 - 45
30 - 35
50 - 60
32 - 36
Electronics city
Whitefield
Mysore Road
Bangalore North
26 - 28
26 - 30
24 - 26
32 - 34
18 - 20
20 - 25
25 - 26
45 - 55
35 - 38
3,200 - 3,700
4,500 - 5,000
-
46 - 48
50
38 - 40
5,000 - 6,200
CBD
SBD
PBD
ORR
OUTLOOK - OFFICE
H1 2013 has witnessed entry of 4.2 million sqft of office space.

Another 4.9 million sqft of office space is likely to enter in H2
2013, totaling the fresh supply for 2013 to 9.1 million sqft.
Absorption in 2013 is pegged between 8.5 and 9.0 million sqft.

ORR, for the coming three years is expected to remain a
preferred destination among IT/ITeS occupiers. The micromarket has witnessed substantial activity in the past three
years and is expected to continue the trend with significant
planned supply.
With companies initiating development of their campuses in

Bangalore North, this micro-market is anticipated to gain
momentum by 2015.
Rental and capital values in Bangalore are expected to remain

unchanged in short term. Besides, increase in rentals is
expected in prominent Grade A IT Parks due to controlled
supply and healthy leasing activity.
20
RESIDENTIAL MARKET OVERVIEW
40,336 units
33,988 units
launched during 2012
absorbed in 2012
31% CAGR
of residential absorption
5% - 25% annual capital appreciation range
3% - 7% range of annual average rental yield
18,076
26,620
units launched
during H1 2013
Bangalore residential market witnessed a launch of 40,336
units including both Class A and Class B projects in 2012. This

was a drop by 8% compared to the number of launches in 2011.
Total absorption in Bangalore during the year 2012 was 33,988
units in Class A and B categories. Absorption of residential units

in Bangalore is growing at a CAGR of 31% over the last 3 years.
H1 2013 witnessed launch of 26,620 units and absorption for
Majority of these new launches have a ticket size in the range of
Annual capital appreciation ranges between 5% - 25% with

maximum appreciation of 25% observed in Tumkur Road, due
to Metro connectivity. Other locations that witnessed high
capital appreciation include ORR-Sarjapur Road and
Whitefield.
93% of the new launches were apartments and 7% were villas.

Absorption also followed a similar trend with apartments
accounting for 94% and villas accounting for 6% of the total
absorption witnessed in H1 2013.
Annual average rental yield in Bangalore ranges between 3% 7% with Bangalore North and Whitefield offering the best
returns of upto 7% and 6% respectively.
Among micro-markets, Bangalore North witnessed highest

number of launches accounting to 20% of the total units
launched. Whitefield and ORR-Sarjapur with 18% and 17% of
total launches respectively were among the other micromarkets to see high activity.
Figure: Supply and Absorption as per ticket size in Bangalore,

H1 2013
35,000
30,000
16
25,000
Number of Units
Unit sizes ranged between 3,000 - 6,000 sqft in Central and Offcentral locations. In peripheral locations like Whitefield, ORRSarjapur Road, Bangalore North and Bannerghatta Road- the
average unit size ranges between 1,250 - 2,500 sqft for
apartments and 2,500 - 4,500 sqft for villas. In micro-locations
like Tumkur Road and Hosur Road where target audience is
predominantly industrial workers, the unit size range between
900 - 1,800 sqft for apartments and 1,500 - 3,000 sqft for villas.
Analyzing new launches, absorption and availability across the

various segments- there is a demand for units in budget, midsegment and super-luxury categories. However, if the launches
continue at the same levels, there will be an oversupply
situation in the premium and luxury segments by 2014.
Bannerghatta Road, Mysore Road and Kanakapura Road

witnessed subdued activity in terms of new launches.
INR 50L to 1Cr (Premium segment). The remaining were in the

INR 25L to 50L (Mid-segment); INR 1Cr to 5Cr (Luxury
segment). Launches in the < INR 25L (Budget segment) and >
INR 5Cr (Super-luxury segment) were less than 1% of the total
number of units launched.
Off-central location of Magadi Road is witnessing renewed

interest due to the availability of industrial land for
redevelopment in the inner ring city.
corresponding year stood at 18,076 units.
Again Bangalore North, ORR-Sarjapur Road and Whitefield

micro-markets witnessed highest absorption; accounting for
29%, 16% and 14% of total absorption respectively.
20,000
15,000
10,000
5,000
0
< 25L
25L-50L
50L-1Cr
1Cr-5Cr
>5Cr
Segments in INR
Supply
Absorption
Supply includes fresh supply for H1 2013. Absorption includes sale of fresh and unsold stock of
previous years.
22
PE funds have invested close to INR 1,386 Cr in Bangalores residential market during 2012.
Residential sector is the most preferred Real Estate segment for

investment in Bangalore. Among the prominent channels available
for funding real estate projects are construction finance from
banks, private equity (FDI compliant & domestic funds) and NonBanking Financial Corporations (NBFCs). Apart from these,
overseas funding for Real Estate sector include External
Commercial Borrowings (ECB). However, ECBs can be used to
fund only low-cost affordable housing projects.
NBFC finance through structured debt / mezzanine finance

offer guaranteed returns and fixed timelines for exit. In addition,
provision of collateral including land and / or corporate
guarantees are a pre-requisite to avail funding through NBFCs.
Coupon rates for NBFC ranges between 18% - 24% depending
upon the reputation of the developer and project attributes.
Exit timelines for both PE funds and NBFCs range between 3 - 5

years.
Despite availability of construction finance from banks at a low
cost, developers are evaluating alternate sources for financing the

project mainly due to end-use restrictions. While selecting an
investment partner, sought after parameters for the developer
include availability of funding at land aggregation stage, lesser
end-use restrictions and lower monitoring of the funds.
Launch of Real Estate Investment Trust (REIT) on the

Alternative Investment Fund (AIF) platform is expected to
positively impact the industry.
PE funds and NBFCs are the major channels available for

financing large-scale residential developments in the city. Opening
of Real Estate sector in the year 2005 to FDI led to entry of Private
Equity (PE) funds in this sector. Until 2008 access to PE funds was
less challenging and funding was available at land aggregation
stage. However post 2009, funds prefer to evaluate projects post
land aggregation stage. PE funds today evaluate preferred /
promote return structure with Grade A developers. Also, minimum
IRR evaluated is 25%, although a few funds have exited with a
return as high as 35%.
Table: Key PE investments in Bangalore residential market during 2011-12
PE Firm
Developer
Madison India
RE Fund Ltd.
Shriram Land
Developers India Ltd.
GIC (Singapore
Soveriegn Fund)
Brigade Enterprises
Ask Property Fund
Shriram Properties
Ask Property Fund
Building
Residential Plotted
Development
Location
Amount
(in million USD)
Sarjapur and
Meesaganahalli
5.5
Whitefield
19
Land Acquisition
Bangalore
18.2
Mantri Developers
Residential
Lal Bagh Road
Redfort Capital
Prestige Estates
Residential
36
APG and Group of

investors
Godrej Properties
138
Portman Holdings
Tata Housing
Promont
Banashankari
12
Sun Apollo
Sobha Developers
Residential
Bangalore East
9.2
Pragnya
Habitat Ventures
Residential
Bannerghatta Road
Source: www.vccircle.com
14

Figure: Bangalore's Residential micro-markets
Do
Towards
Doddaballapur
Industrial Area
dd
NH 7: To Hyderabad
ab
a lla
pu
ain
rM
Ro
Doddaballapur Industrial Area
ad
ar
yR
oa
Rajanukunte
Be
ll
BANGALORE NORTH
ed
Pe
rip
he
ra
lR
in
Ro
ad
Yelahanka
Pr
os
TUMKUR
ROAD
Pr
op
op
os
ed
Pe
rip
NH 4: To Mumbai
Jalahalli
Tum
kur
BIEC
Ro
ad
he
Sahakara
Nagar
lR
in
Ro
d
ing Roa
i
nna
Che
: To s Road
4
H
a
Avalahalli
IISC
HBR Layout
Nagawara
RMV
Extension
Peenya Industrial Area
OLD MADRAS
ROAD
Hennur
Hebbal
Hesaraghatta
Cross
Budigere
ad
HMT Township
Manyata Embassy
Business Park
NICE R
Hoskote Industrial Area
ra
Thannisandra
er R
ing
Palace
Grounds
Roa
Seegehalli
ITI
gR
oa
Mad
Old
Out
Magadi Road
WHITEFIELD
d
Roa
Rin
Banaswadi
Krishnarajapuram
Hope Farm Circle
Ou
ter
efield
Main
Whit
Rajaji Nagar
Byppanahalli
M
M
MG Road
M
Majestic
C.V.Raman Nagar
ITPB
Indiranagar
Bagmane Tech Park
Bangalore City
Railway Station
Vijayanagar
CBD
Old Airport
Brookefield
Road
Varthur Road
Marathahalli
OFF-CENTRAL
Mysore Road
Jayanagar
ore
s
My
Global Village
Technology Park
i
rR
Wipro
HSR Layout
Silk Board
Kengeri
Kumbalgodu
Industrail Area
SARJAPUR ROAD
Haralur
Puttenahalli
Bellandur
te
Ou
J.P. Nagar
a
Ro
Ro
Jaraganahalli
IIMB
Sa
rja
pu
rR
Hosa Road
oa
Begur
Dommasandra
CE
NI
Arkere
Kothnur
ng
Ri
a
Ro
d
Thalagattapura
M
Gottigere
Kanak
a
KANAKAPURA
ROAD
NICE Ring Ro
ad
Bannerghatta Road
pura R
oad
oa
rR
Electronic City
u
os
SH 17:
To Mysore
Proposed Peripheral
Ring Road
ng
Cessna Business Park
ad
Bangalore
University
MYSORE
ROAD
Varthur
Koramangala
BANNERGHATTA
ROAD
Bommasandra
Bommasandra & Jigani

Industrial Area
NH 7: To Salem
HOSUR
ROAD
Major Roads
Major Rail Phase I Under Construction
Outer Ring Road
Proposed Metro Rail Phase II
Elevated Express Highway Under Construction
NICE Ring Road
Proposed Monorail
Metro Rail Operational
Major Industrial Areas

Major Landmarks
IT/ITeS Clusters
Key Metro Stations
24
Central
19
Target Segment: Mixed

Key projects launched in H1 2013: Legacy Mycon Vuv, Total
Environments Lost in the Greens
Type of developments: High end luxury homes

Social Infrastructure Maturity Status: High
33
190
units available as on H1 2013
INR 7,000 - 25,000
per sqft Capital value for each class A apartments
11%
Average Annual price Appreciation
3% - 4%
Average Annual Rental Yield
Off Central
1,505
1,116
3,340
Type of developments: This micro-location mostly comprises of
This micro-location has witnessed the development of not just

apartments, but has come up with newer concepts like sky villas
(duplex apartments with large terrace spaces) in Divyasrees 77
East; Doublements (Twin units) Divyasrees 77 East, row
houses and villas.
ORR - Sarjapur Road (Marathahalli to Silk Board Junction)
4,485
launched in H1 2013
Target Segment: Predominantly IT/ITeS employees
2,841
Demand for residential segment is highest in this micro-market
11,011
due to its proximity to Outer Ring Road (ORR) one of the most
sought after IT/ITeS hubs in India.
Key projects: Prestige Ivy Terraces, KMB La Palazzo, SJR

Parkway Homes, VBD Azure, LGCL Puevlo.
Social Infrastructure Maturity Status: Medium
INR 4,000 - 9,000

per sqft Capital value for class A apartments
INR 4,790 - 11,350
per sqft Capital value for class A villas / row-houses
15% - 20%
3% - 4%
and
first ring suburbs with industrial areas that are now open for
redevelopment thereby making large land parcels available for
mixed use development.
11%
3% - 4%
Key Projects: Sobha Indraprastha, Prestige Westwood, Purva

Sunflower, Total Environments Here comes the Sun
Assetz Lumos.
INR 5,000 - 11,000

INR 11,500 - 13,000
Whitefield
5,338
2,479
Target Segment: Predominantly IT/ITeS employees

Key projects launched in 2013 include: Skylark Ithaca, Brigade
Begonia, Rohan Avrithi

Class B project launches were higher than Class A.
9,886
INR 4,200 - 8,000
INR 7,500 - 11,300
11% - 21%
4% - 6%
Old Madras Road
3,281
1,387
3,940
INR 3,300 - 5,950
INR 4,000 - 5,250
11% - 21%
4% - 6%
Target Segment: Industrial workers

Key Projects launched in 2013: Brigade Golden Triangle and
Prestige Glenwood.
Social Infrastructure Maturity Status: Low

Infrastructure:
This location is strategically located between Bangalore

International Airport, Whitefield and Outer Ring Road, the three
economic magnets that will lead the economic growth in the next
5 -10 years.
The announcement of the Chennai-Bangalore expressway
connecting Hoskote will also lead to the growth of automobile,
aerospace and manufacturing sectors around Hoskote.
Currently, this location lacks water supply and social
infrastructure which is the key reason for low absorption by end
users. Absorption is mostly investor driven.
26
Bangalore North
4,730
Key projects: Ashed Properties Regency La Majada,
5,170
Prestige Augusta Golf Village, Samruddhi Rhythm, Bhartiya

City - Phase II and Equinox Waters Edge - Phase II.
Social Infrastructure Maturity Status: Low

Infrastructure: This micro-location has the advantage of
availability of large land parcels. The completion of physical
infrastructure projects like Elevated Expressway to BIAL,
High Speed Rail Link and operationalization of government
promoted & private industrial and / or business parks in
Devanahalli are likely to improve the long term potential for
residential growth in this market.
14,011
INR 3,800 - 11,500
INR 4,800 - 9,000
11% - 18%
4% - 7%
Bannerghatta Road
No
552
800
INR 2,100 - 6,300
per sqft Capital value for Class A apartments
INR 8,500
6% - 8%
3% - 4%
Target Segment: IT/ITeS employees

Key Projects launched in 2012: DLF Bella Greens was the only
Class A project launched in this micro-market in 2012.
No new projects launched in H1 2013

Social Infrastructure Maturity: High. However, travel time is an
issue during peak hours.
Infrastructure: Proposed new line of Metro connecting

Nagawara to Gottigere
Hosur Road
3,875
2,367
7,494
15% - 18%
Type of development: Class A developments are limited.

Absorption was high in this micro-market and was next only to
Bangalore North and Sarjapur Road due to the availability of
lower priced apartment and villa projects as compared to prices
in other nearby micro-markets.
INR 3,000 - 5,000

INR 3,500 - 6,400
Target Segment: IT/ITeS employees, Industrial workers
Key projects launched include Prestige Sunrise Park, Sattva

Greenage - Phase II, Godrej E City - Phase II, Indya Estates - The
Greens.
Social Infrastructure Maturity Status: Medium
4% - 5%
Kanakapura Road
728
610

Key Projects launched in H1 2013 are Golden Panorama and
Mahaveer Carnation
4,523
INR 2,100 - 6,300

Infrastructure: Ongoing construction of Metro Rail Project
INR 8,500
Phase I.
10% - 11%
3% - 4%
28
Mysore Road
2,385
Target Segment: Predominantly industrial

This micro-market witnessed limited supply. Absorption was
witnessed mostly in Grade A projects before NICE corridor.
Key projects launched include Provident Sunworth, VBHC

Vaibhava, Gopalan Sanskriti and Kumar Properties
Princeville
1,768
INR 2,900 - 4,300
INR 4,200 - 6,600

Infrastructure Projects: Metro Rail Phase I
1,079
will improve
connectivity to this micro-location.
5% - 6%
3% - 4%
Tumkur Road
274
442
INR 2,800 - 5,000

INR 8,000
20% - 25%
3% - 5%
Majority of the projects launched in 2012 were in the midsegment. However, this location also witnessed the launch of its
first luxury villa project by Godrej Properties.
4,111
Target Segment: Industrial workers
Key projects launched in H1 2013 include Tata Riva

Infrastructure: This micro-market was previously looked at as an
industrial location, and is now undergoing a shift with metro
connectivity. However, in the long term, the proposal to shift units
within Peenya Industrial area and the micro-locations proximity
to Bangalore International Airport will unlock land for commercial
Grade A developments, thereby making this location suitable for
the development of a range of residential projects.
New project launches are likely to be in the range of 40,000 45,000 units whereas absorption is likely to be in the range of
33,000 - 35,000 units.
Since the announcement of additional interest benefits at the

Union Budget 2013-14 on home loans up to INR 25L for
projects within a ticket size of INR 40L, developers are likely to
come up with projects in the 25L - 40L bracket.
New project launches are expected to increase especially in

the budget and mid-segment category; however will be
subdued in the premium and luxury categories due to
availability of large number of under construction units.
OUTLOOK - RESIDENTIAL
Meanwhile, super-luxury projects are likely to do well in 2013.
Bangalore North, ORR-Sarjapur Road and Whitefield will

continue to witness major activity in the residential segment
with several projects already lined up for launch.
Key upcoming micro-locations include Tumkur Road and

Kanakapura Road due to improvement in infrastructure and
Old Madras Road for its strategic location and announcement
of new infrastructure projects. This will result in capital value
appreciation in these micro-locations.
Strong demand for office space in ORR and Sarjapur Road is

expected to appreciate the rental values in these micromarkets.
The success of Integrated Townships like Brigade Gateway

and Prestige Shantiniketan, and availability of industrial land
for redevelopment in off-central locations (inner ring city)developers are likely to announce many more mixed-use
integrated township projects.
In terms of residential products, there exists a huge scope for

innovation in the budget and mid-segment housing. Increasing
use of technology in various aspects like design, construction,
project management, marketing and customer service is
necessary to arrive at newer products.
New brands likely to enter Bangalore residential market in

2013 include India REITs The Address Makers, Olympia
Group, Supertech and Sahara Group.
30
RETAIL MARKET OVERVIEW
7.65 million sqft

Total Mall space
operational in Bangalore
0.5 million sqft
vacancy in operational malls
5.65 million sqft

of mall space under-construction
0.78 million sqft is likely to enter in H2 2013

2.50 million sqft is pre-leased in
under construction malls
13.79 million sqft

is under planning stage
Bangalore will add of 5.65 million sqft of shopping mall space by 2016
Bangalore witnessed completion of 1.29 million sqft11 of mall

space during 2012; higher than Tier I cities of NCR and Mumbai.
As of H1 2013, operational shopping mall space in the city totaled
to 7.65 million sqft.
Between 2004 and 2008, shopping mall space in the city grew at a
CAGR of 8%; however, last four years 2009 - 12 witnessed
significant mall completions and the citys mall space grew at a
CAGR of 20%.
The city reported no new completion of malls during H1 2013.

However, with three malls under construction, completion of 0.78
million sqft of mall space is anticipated by year end. Shopping
malls expected to enter the market during 2013 are Vaishnavi
Sapphire (0.25 million sqft) on Tumkur Road, World Market Phase I (0.18 million sqft) on Old Madras Road and MSR Regalia Elements Mall (0.33 million sqft) on Thanisandra Road.
Favourable demographics, opening-up of FDI in single and multibrand retail and availability of large land parcels have not only led
to increase in mall space over the years but have also facilitated
development of larger malls. Until 2008, the malls were
predominantly neighbourhood and community malls with sizes
restricted between 0.35 and 0.60 million sqft while today the city
has witnessed completion of regional malls ranging between 0.75
and 0.90 million sqft.
Figure: Year-on-year increase in mall space in Bangalore

3.50
2.90
3.00
Vestian Estimate
GLA in million sqft
2.50
2.30
2.00
1.50
1.30
0.93
1.00
0.50
1.19
1.35
0.78
0.55
0.46
0.40
0.36
0.35
0.30
2004
2005
2006
2007
2008
2009
2010
2011
2012
0.00
Total number of malls operational in the respective year
11
2013(E) 2014(E) 2015(E) 2016(E)

3
Total number of malls expected to be completed in the respective year
Mall space statistics in the report are indicated in Gross Leasable Area (GLA) unless mentioned otherwise
32
SBD and PBD locations are likely to be focus areas for developments of shopping malls in next three to five
years.
The Forum (0.36 million sqft) in Koramangala, Garuda Mall (0.35
million sqft) at Magrath Road and Sigma Mall (0.18 million sqft) at
Cunningham Road are situated in Central Business District
(CBD)12 and Secondary Business District (SBD)13 locations.
Growth in citys population coupled with infrastructure projects like

completion of Outer Ring Road (ORR), NICE Ring Road and ongoing metro rail project have provided impetus for development of
retail spaces in Peripheral Business District (PBD)14 locations of
the city.
PBD location of Whitefield has witnessed highest mall space

activity in the past few years. The micro-market accounts for 33%
of total operational mall space in the city. The micro-location is also
expected to see completion of 0.87 million sqft of mall space in
next three years. As a consequence of this large under trading
supply, the potential for retail development in this micro-location is
low. Under-construction malls in this location include Forum
Shantiniketan Mall (0.45 million sqft) and Xander Mall (0.42 million
sqft).
ORR Sarjapur Road is one of the most promising locations for

development of a shopping mall due to high residential activity, low
existing mall space and no malls under construction.
Bangalore North and Old Madras Road have high potential for
mall development in long term due to proposed developments in
commercial and residential sectors.
Further lack of availability of large land parcels in CBD of the city

has fuelled development of shopping malls towards SBD and PBD
locations. Currently 4.5 million sqft of shopping mall space is
under-construction in these locations.
Based on existing, under-construction and planned malls

Kanakapura Road, Bannerghatta Road, Mysore Road, Hosur
Road and Tumkur Road are in a balanced state in terms of mall
development vis--vis residential activity.
Currently, CBD, SBD and PBD locations respectively account for

10%, 42% and 48% of existing mall space and this ratio is
expected to remain the same in next three to five years. Although
PBD locations are expected to witness completions of more
number of malls than SBD locations, the latter is anticipated to
house larger malls designed mostly as regional or community
malls.
Today, shopping malls are being developed as an

integral part of a mixed-use development having an
appropriate mix of office spaces, residences and
hotels.
Continuous expansion of the city limits have led to availability of

large mills / industrial land for redevelopment. These sick mills land
have facilitated development of mixed-use integrated townships
and over the years have emerged as preferred destinations for
development of shopping malls. Some of the key examples being
Brigade Orion (0.75 million sqft) on Kirloskar Factory land in
Rajajinagar, Mantri Square (0.93 million sqft) on Raja Mills land in
Malleshwaram and Salarpuria World Market (1.0 million sqft) on
BPL Factory land in Old Madras Road.
12
CBD covers areas around MG Road, Brigade Road, Magrath Road, Richmond Road, Lavelle Road, Vittal Mallya Road, Cunningham Road, Langford Town, Brunton Road and Residency Road.
SBD Locations include areas of Indiranagar, CMH Road, Old Madras Road (till KR Puram), Banaswadi, Bellary Road, Koramangala, Kanakapura Road (till ORR), Jayanagar, JP Nagar,
VijaynagarSadashivnagar, New BEL Road, Sanjaynagar, Malleshwaram and few locations of Bannerghatta Road, Hosur Road Rajajinagar and Yeshwantpur.
14
Locations of Whitefield, ORR-Sarjapur, Electronics City and Hosur Road, Bannerghatta Road, Kanakapura Road, Mysore Road, Old Madras Road, Tumkur Road and Bangalore North.
13
Bangalore mainly has shopping malls anchored around a department store / hyper-market chain and / or a
multiplex. The city offers an opportunity for development of specialty shopping malls revolving around a
theme.
Although Bangalore has the third largest High Net-worth Individual
(HNI) population in the country, next only to Delhi and Mumbai, the
city has limited luxury mall space. The Collection Mall in UB City
and Leela Galleria in Hotel Leela Palace are the only available
luxury mall spaces in the city. The upcoming Galaxy Mall on
Residency Road, the luxury mall in West Courts City View on
Bellary Road and luxury retail space within Ritz Carlton on
Residency Road are likely to add some luxury mall space in the
coming years.
The city lacks specialty malls focusing exclusively on sale of home

& furnishing products, cars &auto-accessories, jewelry, electronics
& white goods. No such malls have been planned presently, but with
the Government opening FDI in multi-brand retail the city is likely to
witness entry of retail giants that will provide necessary impetus for
development of themed malls
Currently mall spaces are largely anchored around departmental

stores or hypermarket chains. Until recent past, entertainment in
the malls was limited to multiplexes however; today it is growing to
a status of an important anchor.
High-street locations currently face traffic congestion, crunch in availability of parking space and lack of
unobstructed pedestrian walkways.
High-street, synonymous with a market, offers better brand visibility
and rental advantage as compared to a shopping mall.
Brigade Road and Commercial Street in CBD and Indiranagar 100

feet Road, Malleshwaram 8th Cross, New BEL Road, Jayanagar 4th
Block and Koramangala 80 feet Road in Koramangala in SBD are
among the prominent illustrations of evolved high-streets of the city.
Regardless of increasing mall space; Bangalores high-street

locations are preferred by Apparel & Footwear, Electronic goods
and Food & Beverage (F&B) retailers.
Among the recently developing high-street locations are

Kamanahalli Main Road, Sahakar Nagar and Marenahalli Road
towards the PBD locations.
High-street expansions during 2012-13 included Delsey

(Indiranagar), Baileys (Koramangala), Krispy Crme (Church
Street), Choki Dhani (Intermediate Ring Road) and Me n Moms
(Banashankari). Further, some of the entrant retailers namely
Starbucks coffee is currently evaluating high-street locations for
setting-up their stores in the city.
34
Legend: List of existing, under-construction and planned malls in Bangalore

Malls in CBD
Operational
Under Construction
G Corp 1 MG Road
Suraj Cambridge Mall
EVA Mall
Embassy Galaxy Mall
Garuda Mall
The Collection
Sigma Mall
Planned
Malls in SBD
Operational
Under Construction
Planned
Salarpuria Oasis Mall
17
Vega Mall
21
Sobha Grand Mall
The Forum
18
City View
22
Karle Mall
10
Swagath Garuda
19
Orion Mall - 2
23
Nitesh Mall
11
Gopalan Innovation Mall
20
World GT Mall
12
Mantri Junction
13
Mantri Square
14
Orion Mall
15
Gopalan Signature Mall
16
Leela Galleria
Malls in PBD
Operational
Under Construction
Planned
24 Soul Space Arena
35
Grand Mall & Towers
44
Gopalan Destination Mall
25 Phoenix Market City
36
Virtuous Xander Mall
45
Prestige Technostar
26 Inorbit Mall
37
Forum Shantiniketan Mall
46
MBD Zephyr
27 Park Square
38
Salarpuria World Market
47
Mantri Mall, Agara
28
The Forum Value Mall
39
Neo Mall
48
Raheja INXS Mall
29
Cosmos Mall
40
Gardens Galleria
49
Perk In Mall
30 Soul Space Spirit
41
Vaishnavi Sapphire
50
Prestige Falcon City
31 Royal Meenakshi Mall
42
MSR Regallia Elements
51
Mantri Mall, Kanakpura
32 Gopalan Arcade Mall
43
RMZ Galleria
52
Puravankara Mall
33 Gopalan Legacy Mall
53
Lotus Mall
34 Esteem Mall
54
Karle Town Center
55
Monarch Celestial
56
Century Istana High Street

Figure: Map of existing, under-construction and planned malls in Bangalore
Do
Towards
Doddaballapur
Industrial Area
dd
NH 7: To Hyderabad
ab
56
a lla
pu
ain
rM
Ro
ad

Rajanukunte
Be
ll
ar
yR
oa
55
in
Ro
ad
Yelahanka
ed
Pe
rip
he
ra
lR
43
os
Pr
Pr
op
op
os
ed
NH 4: To Mumbai
Pe
rip
Jalahalli
Tum
kur
BIEC
Ro
ad
he
Sahakara
Nagar
in
Ro
Budigere
34
42
Hebbal
54
Hesaraghatta
Cross
ing Roa
lR
ad
HMT Township
ra
Thannisandra
Hennur
Avalahalli
22
HBR Layout
NICE R
41
Nagawara
Out
er R
18
gR
oa
RMV
Extension
ing
Roa
13
Krishnarajapuram
36
M
25
Rin
Ou
ter
19
Hope Farm Circle
37
Byppanahalli
20
M
Bangalore City
Railway Station
MG Road
M
Majestic
4
44
15
Indiranagar
ras
efield
Main
Roa
Whit
27
45
24
23
d
Roa
38
ITI
Banaswadi
Rajaji Nagar
21
Vijayanagar
Palace
Grounds
ai
enn
Ch
Mad
Old
14
Magadi Road
NH
o
4: T
46
26
35
3
Old Airport
29
Road
Brookefield
28
Varthur Road
re
yso
30
10
12
HSR Layout
Silk Board
11
M
Puttenahalli
40
CE
NI
Sa
rja
Haralur
Jaraganahalli 17
50
IIMB
pu
rR
Hosa Road
oa
Begur
Dommasandra
51
Arkere
Kothnur
ng
Ri
31
52
M
49
Thalagattapura
M
os
ad
Ro
SH 17:
To Mysore
Bellandur
48
M
Kengeri
Varthur
47
J.P. Nagar
d
oa
16
Koramangala
Proposed Peripheral
Ring Road
Bangalore
University
53
32
Jayanagar
r Rin
g Ro
8
Mysore Road
Oute
33
ad
Marathahalli
ur
Gottigere
ad
39
Bannerghatta Road
NICE Ring Ro
Kanak
a
pura R
oad
oa
Electronics City
Bommasandra
NH 7: To Salem
Major Roads
Outer Ring Road
NICE Ring Road
Proposed Monorail

Major Landmarks

M
Key Metro Stations
36
Since last year, shopping mall rentals have appreciated between 5% and 20% while high-street rentals have
appreciated between 5% and 12%.
Mall rentals have appreciated in the range of 5 - 20% in last one
year. UB City on Vittal Mallya Road witnessed highest

appreciation in rentals due to lack of luxury space in the city. The
Forum in Koramangala and Garuda Mall on Magrath Road
witnessed significant appreciation in the last one year.
High-street locations over the last one year witnessed lesser

appreciation compared to shopping malls. Rentals across the
locations grew in the range of 5-12%. Vittal Mallya Road, a key
high street location for luxury brands, witnessed significant
increase in rental value during H1 2012 due to limited supply of
retail space in the luxury category. Other high-street locations that
witnessed growth in rental values include Kammanahalli Main
Road and M.G. Road.
Table: Malls and High-street Rental Value (INR/sqft/month)15
Micro-Location
Mall Rentals
Rentals on UCA
H1 2012
H2 2013
Rentals on SBA
H1 2012
% Change
H2 2013
CBD
Magrath Road
300
350
195
228
17%
Cunningham Road
165
185
107
120
12%
Vittal Mallya Road
330
395
215
260
20%
SBD
Koramangala
400
450
260
292
13%
Malleshwaram
210
225
137
146
7%
13%
PBD
Whitefield
150
170
98
110
Bannerghatta Road
180
200
117
130
11%
Mysore Road
100
105
65
68
5%
Rajarajeshwari Nagar
110
115
72
75
5%
High-Street Locations
CBD
Brigade Road
450
480
360
384
7%
Commercial Street
300
320
240
256
7%
Church Street
160
175
128
140
9%
Vittal Mallaya Road
200
225
160
180
13%
M. G. Road
300
330
240
264
10%
Koramangala 80 Feet Road
130
130
104
104
0%
Indiranagar 100 Feet Road
210
225
168
180
7%
Jayanagar 11th Main Road
245
255
196
204
4%
Malleshwaram - Sampige Road
120
125
96
100
4%
New BEL Road
130
140
104
112
8%
Kammanahalli Main Road
125
140
100
112
12%
ORR (Marathahalli - Sarjapur Road)
SBD
PBD
100
100
80
80
0%
Bannerghatta Road
95
100
76
80
5%
Yelahanka Main Road
90
90
72
72
0%
15
Shopping Mall rentals indicated on UCA are for a 1,000 sqft vanilla store on Ground Floor with an efficiency of 65%. High-street rentals indicated on UCA are for 1,000 sqft store on Ground Floor with an
efficiency of 85%.
The city is slated to add 0.78 million sqft of mall space by the
end of 2013. Total operational mall space shall account to 8.45
million sqft by the year end.
SBD and PBD locations are expected to witness significant

entry of new malls in the next three years. Close to 4.5 million
sqft of mall space is under-construction across these
locations.
Among the PBD locations ORR-Sarjapur has high potential for

development of malls in near future while Whitefield due to
high penetration of shopping malls remains less attractive.
The city offers an opportunity for development of specialty

malls that concentrate on a particular merchandise like
furniture, automobile and its accessories, entertainment and
jewelry to name a few. No such malls have been planned
OUTLOOK - RETAIL
presently, but with the Government opening FDI in multi-brand

retail, the city is likely to witness entry of retail giants that will
provide necessary impetus for development of themed malls.
Retail demand in high-street locations of Brigade Road and

Commercial Street is expected to strengthen with completion
of Bangalore Metro Rail. Indiranagar 100 feet Road and
Koramangala 80 feet Road will continue to be a preferred
location with F&B retailers while Jayanagar 4th Block and
Malleshwaram will be preferred by retailers focusing on
womens apparel and jewelry.
Mall Rentals in SBD locations are likely to increase in short

term while rentals in PBD locations are expected to remain at
current levels in coming one year.
High-street rentals are anticipated to contain past growth trend

in coming one year.
With Karnataka Government easing FDI norms for both single

brand and multi-brand retail, the retail sector in Bangalore is
poised to grow in the coming years.
38
HOSPITALITY MARKET OVERVIEW
557 rooms
added in Bangalore in 2012
9,585 rooms
at the end of 2012
5,190 rooms
under-construction
324 rooms entered in H1 2013

1,157 rooms likely to enter by
Q1 2014
The citys hospitality market is dominated by upscale hotels; 42% of the existing room inventory is under 5
Star Category. In medium term, the city will continue to see addition of 5 Star category hotels over other
formats.
Bangalores hospitality sector is driven by business travelers that contributes close to 75 - 80% of the citys hospitality demand. Leisure travelers
and Meetings, Incentives, Conferencing & Exhibitions (MICE) travelers contribute to a mere 20% - 25% of the citys hospitality demand.
Figure: Distribution of Existing

Inventory
Figure: Distribution of
Under-construction Inventory
6%
Figure: Distribution of Planned

Inventory
7%
10%
6%
18%
23%
42%
17%
0%
69%
82%
29%
Serviced Apartment
3 Star
Serviced Apartment
3 Star
Serviced Apartment
3 Star
5 Star
4 Star
5 Star
4 Star
5 Star
4 Star
Existing Inventory:
Bangalores hospitality market is dominated by upscale 5

Star category hotels. Nearly 42% of the total existing room
inventory falls under this category. Mid-segment hotels
have started penetrating the market only post 2008 and
currently accounts for a mere 23% of the existing inventory.
Branded serviced apartments contribute to 6% of the
existing inventory.
Upcoming and Planned inventory:
Going forward, the hospitality market will continue to be

dominated by 5 Star category hotels as of the 5,524 rooms,
nearly 4,000 rooms are under this category.
By Q1 2014 Bangalore is likely to witness entry of 1,157

rooms, of which 65% are in 5 Star Category.
In the year 2012, 557 rooms entered the citys market.

Sheraton (230 rooms) at Rajajjnagar and Vivanta by Taj
(327 rooms) at Yeshwantpur commenced operations in
2012. However, this is only 30% of the rooms that were
slated to enter the market in 2012. Ritz Carlton on
Residency Road, JW Marriott in UB City deferred their
construction schedules. H1 2013 witnessed completion of
Hotel Marriott (324 rooms) in Whitefield.
Table: List of Hotels likely to enter Bangalore market in 2013-14

Hotel Name
Location
Micro-market
No. of Rooms
Category
Fairfield by Marriott
Rajaji Nagar
SBD
140
Business
Hilton Residences
Inner Ring Road
SBD
251
4 Star Serviced Apartments
Taj Gateway
Bannerghatta Road
SBD
210
4 Star
Marriott
Devanahalli
PBD
307
5 Star
Double Tree Suites by Hilton
ORR - Sarjapur
PBD
172
5 Star Serviced Apartments
40
PBD locations account for nearly 48% of the total room inventory. Currently of the total 5,190 rooms underconstruction, PBD is expected to see an entry of 3,471 rooms.
Based on the micro-markets, CBD accounts for 3,582

operational hotel rooms. The location, due to its proximity to the
city center and high land prices is preferred for development of 5
Star category hotels. Currently, nearly 70% of the existing
inventory is under 4 and 5 Star category hotels. In medium term,
this micro-market will continue to see entry of 5 Star category
hotels; 1,098 rooms under this category are expected to enter
the market by 2015 - 16. Ritz Carlton (267 rooms), JW Marriott
(318 rooms) commenced operations while Hilton (285 rooms) is
presently under-construction in this region.
PBD tops the chart with 5,144 operational hotel rooms. Proximity
to IT micro-markets of ORR, Whitefield and Electronics City has
led to development of branded 3 Star category / business hotels
and branded serviced apartments as compared to CBD or SBD
locations. Some of the prominent national and international
operators with presence in this area include Novotel and IBIS by
Accor, Marriott by Marriott Group, Lemon Tree Hotel by Lemon
Tree Group of Hotels, Premier Inn by Premier Inn Group and Aloft
by Starwood Group of Hotels. With 3,471 rooms in various stages
of construction, PBD is likely to have the highest inventory in the
city in the near future.
SBD locations account for a mere 1,923 rooms. This location has
witnessed development of a hotel as a part of mixed-use
development having an office, residential and / or a shopping
mall within a development. Key illustrations being Sheraton in
Brigade World Trade Center, upcoming serviced apartments Hilton Residences by Hilton Group in Embassy Golf Links and
upcoming 5 Star hotel in Mantri Groups proposed integrated
township at Agara.
Table: Bangalore's Existing, Under-construction and Planned Hotel Room Inventory

CBD
Category
SBD
PBD
Total
Existing
U/C
Planned
Existing
U/C
Planned
Existing
U/C
Planned
3 Star
807
30
179
140
1,455
194
125
2,930
4 Star
1,192
186
1,734
988
4,100
5 Star
1,289
1,068
1,404
230
1,727
2,117
1,412
9,246
294
154
251
228
172
175
1,274
3,582
1,098
1,923
621
5,144
3,471
1,712
17,551
Serviced Apartment
Total
Among the PBD locations, ORR-Sarjapur Stretch and Whitefield are preferred locations by hotel operators
mainly due to its proximity to IT clusters while Tumkur Road and Bangalore North have gained prominence
owing to its proximity to Bangalore International Airport.
Table: Bangalore's Hotel Room Inventory in PBD locations

No. of Hotel Rooms
Location
3,471
1,712
Whitefield
2,129
1,160
502
ORR-Sarjapur
1,058
984
700
215
Tumkur Road
662
Bangalore North
31
1,112
510
1,264
ORR-Sarjapur Road accounts for nearly 30% of the total
operational IT/ITeS space in the city. This location has witnessed

increased penetration by hotel operators in the last two years
due to high commercial activity across this corridor. Some of the
prominent hotels in this location are Novotel and IBIS by Accor
and Park Plaza by Carlson Rezidor Group. Apart from the
operational hotels, Aloft by Starwood Group, Courtyard by
Marriott and Double Tree Suites by Hilton are among the
upcoming hotels in this micro-market. However, room inventory
in this micro-market is not sufficient to cater to the demand of this
micro-market.
Whitefield currently accounts for more than 40% of the
operational rooms in PBD locations. This micro-location also has
a significant under-construction and planned inventory, which is
likely to enter in medium term.
Planned
5,144
Hosur Road
U/C
PBD
Bannerghatta Road
Existing
Hosur Road has sufficient existing inventory to cater to the

demand. With office development in Electronics City almost
nearing saturation, the potential for developing hotels in this
micro-location is low.
Tumkur Road is emerging as a preferred location for hotels due

to its proximity to Bangalore International Airport and CBD
locations. Further, proximity to business hubs like Brigade
World Trade Center, Manyata Embassy Business Park,
Bangalore International Exhibition Center (BIEC) and industrial
areas of Peenya and Nelamangalais are make this an attractive
location. Vivanta by Taj and Golden Beach Palm Resorts are
among the major operational hotels in this location. However,
almost all hotels that are operational in this micro-location are in
the upscale categories. The micro-market has an opportunity
for development of branded 3 Star category hotels.
With Bangalore International Airport commencing operation in

2008, several hotel projects have been announced in the
Bangalore North micro-market. Currently 1,112 rooms are
under construction and are likely to enter the market in the next
24 months. However, this location has high potential for hotel
development in the long-term due to the proposed economic
hubs. Leela Ventures is coming up with a 300 room 5 Star hotel
in Bhartiya City on Thanisandra Road.
42
Legend: List of existing, under-construction and planned hotels in Bangalore

List of Key Hotels in Bangalore
Royal Orchid Central
29
The Wyndham Grand
Lemon Tree Premier
30
Marriott
The Hilton
31
Hotel Trident Hilton
Hyatt
32
Howard Johnson
Taj Vivanta
33
Hyatt Place
The Oberoi
34
Swissotel
Royal Orchid
35
Zuri
The Leela Palace
36
MBD Zephyr
Matthan
37
Keys Hotel
10
Hilton Residences
38
Ginger
11
Ginger
39
Sheraton
12
Ritz Carlton
40
Aloft
13
JW Marriott
41
Marriott
14
ITC Gardenia
42
Taj Vivanta
15
JNR IBIS Citi Centre
43
Royal Orchid
16
The Atria
44
Alila
17
The Taj West End
45
Park Plaza
18
Viceroys
46
Aloft
19
Shangri-La
47
Novotel and IBIS
20
Le Meridien
48
Citrus
21
ITC Windsor
49
Double Tree Suites by Hilton
22
The Lalit Ashok
50
Planned Hotel (Mantri Group)
23
Sarovar Portico
51
Davanam Sarovar Portico
24
Fairfield by Marriott
52
Courtyard by Marriott
25
Sheraton
53
The Gateway by Taj
26
Movenpick
54
Keys Hotel
27
Taj Vivanta
55
Crowne Plaza
28
Ascott
56
Lemon Tree Hotel
Operational Hotels
Under-Construction Hotels
Planned Hotels
Figure: Map of existing, under-construction and planned hotels in Bangalore

30
Do
Towards
Doddaballapur
Industrial Area
dd
NH 7: To Hyderabad
ab
a lla
pu
ain
rM
Ro
ad
31
Be
llar
yR
oa
Rajanukunte
29
Ro
ad
Yelahanka
ed
Pe
rip
he
ra
lR
in
28
os
Pr
Pr
op
op
os
ed
NH 4: To Mumbai
Pe
rip
Tum
kur
BIEC
he
Sahakara
Nagar
Jalahalli
ra
Thannisandra
lR
in
32
Ro
ad
Ro
Budigere
ad
HMT Township
Hennur
Hebbal
Hesaraghatta
Cross
ing Roa
26
Avalahalli
IISC
HBR Layout
NICE R
27
Nagawara
RMV
Extension
25
Magadi Road
er R
d
oa
gR
ing
20 Palace
Grounds
19
22
Roa
Rin
ter
Ou
Rajaji Nagar
18
17
35
Bangalore City
Railway Station
efield
Hope Farm Circle
39
33
5 Byppanahalli
M
4
C.V.Raman Nagar
MG
Road
8
13
M
Indiranagar
Majestic
12
14
15
9 Old Airport Ro
11
ad
6
24
Vijayanagar
Krishnarajapuram
16
ras
40
34
d
Roa
Seegehalli
ITI
Banaswadi
23
ai
enn
Ch
Mad
Old
Out
21
NH
o
4: T
37
Main
Roa
Whit
42
41
43
36
38
Brookefield
Varthur Road
Marathahalli 44
10
45
Varthur
Mysore Road
Jayanagar
51
r
ute
J.P. Nagar
Ro
ad
48
Ro
Silk Board
Sa
rja
Haralur
Puttenahalli
Bellandur
49
HSR Layout
53
Kengeri
ng
Ri
52 O
ad
47
50
Proposed Peripheral
Ring Road
Bangalore
University
re
yso
46
Koramangala
Begur
Jaraganahalli
pu
rR
Hosa Road
IIMB
oa
54
CE
NI
Dommasandra
Arkere
Kothnur
ng
Ri
M
Thalagattapura
M
os
ad
Ro
SH 17:
To Mysore
ur
Gottigere
d
oa
Electronics City
56
ad
Bannerghatta Road
Kanak
a
pura R
oad
55
NICE Ring Ro
Bommasandra
NH 7: To Salem
Major Roads
Outer Ring Road
NICE Ring Road
Proposed Monorail
Operational Hotels
Under-Construction Hotels
Major Landmarks
Planned Hotels
M
Key Metro Stations
44
Average occupancy rate in branded hotels across Bangalore ranges between 56% and 59%.
Figure: Average Occupancy Levels and Room Rates (INR/night) in Bangalore
75%
10,000
70%
16
16
8,000
65%
6,000
60%
4,000
59%
58%
56%
2,000
7,867
4,883
3,833
5 Star
4 Star
3 Star
55%
50%
Room Rate
Occupancy Levels
Room Rate (INR / Room / Night)
12,000
Average Occupancy Levels
Occupancy rates for 5 Star category hotels in the city range

between 55% and 60%. Further, occupancy rates in 5 Star
category hotels are higher in CBD and SBD locations as
compared to PBD locations.
Lower occupancy rates in 3 Star category hotels is due to two

main reasons; firstly not all the 3 Star hotels are managed by
branded operators and secondly most of 5 Star & 4 Star hotels
have long-term corporate tie-ups that impact the demand
supply dynamics.
Table: Hotel Rack Rates in Bangalore

CBD
Category
Rack Rate
SBD
Discount Offered
PBD
Discount Offered
Rack Rate
Rack Rate
Discount Offered
3 Star
4,200
28%
3,700
36%
3,600
25%
4 Star
5,000
20%
5,650
20%
4,000
24%
5 Star
7,900
11%
8,000
14%
7,700
20%
Serviced Apartment
4,000
16%
5,350
14%
2,000
30%
Management Contract is the most preferred model by International and National Hotel Operators.
Currently, management contract is the most preferred model by
the international and national hotel operators. In this model, the

landlord / developer undertakes the land acquisition,
construction and fit-out of the hotel and the hotel operator
manages the operation of the hotel, in return paying a
management fee on top-line and bottom-line revenues.
Bangalore is also witnessing the development of hotels as part of

mixed use developments with residential, commercial, retail and
hospitality in the same project. Key examples include the
Sheraton Hotel in Brigade Gateway (Rajajinagar), JW Marriott in
UB City (Vittal Mallya Road), Four Seasons Hotel in City View
(Bellary Road) and Fairfield by Marriott in Sumangala Golden
Heights (Rajkumar Road).
Hotels are bringing in external brands of restaurants, spas and

lounges on leases or management contracts in order to increase
revenue generation.
International Hotel operators today are also exploring

opportunities to acquire existing hotels and re-brand these under
their parent companies. Hyatt Hotels Corporation signed
management agreement with Indian Hotels and Health Resorts
(IHHR) and rebranded five Ista Hotels in India including Ista in
CBD location of Bangalore.
OUTLOOK - HOSPITALITY
Majority of the under-construction and planned projects are

under the 4 Star and above categories. However, there is still a
demand for 3 Star and business category hotels in PBD
locations in and around economic hubs.
Occupancy levels and average room rates are likely to fall with
an addition of 1,157 rooms by Q1 2014. However, in the long
run economic growth is likely to increase demand for hotel
rooms.
Active micro-markets in the short to medium terms are CBD

and ORR, whereas Bangalore North has potential for hotels in
the long term.
Management contract will be the preferred development model

for hotels in the short to medium term.
Serviced apartments and company hotels or guest houses

have immense potential to grow.
46
Opportunities across Real Estate Sector in Bangalore in the short term
OFFICE
RESIDENTIAL
RETAIL
HOSPITALITY
ORR being one of the most preferred micro-market will remain a promising
location for development of office space in short to medium term. Further,
with availability of land for redevelopment in CBD and SBD locations, there is
a scope for development of office spaces in these locations.
Bangalore has witnessed significant launches in the ticket size of INR 1 crore
and above. Demand for mid segment (ticket size of INR 25L - INR 50L)
continues to remain buoyant across the city. Some of the locations that have
an opportunity for development of this product type include Kanakapura
Road, Sarjapur Road (after Railway Crossing), Hosur Road and
Bannerghatta Road.
The citys hospitality sector is currently dominated by the 4 and 5 Star

category hotels. There is scope for development of branded 3 Star hotels. In
coming years, integrated township projects would be preferred development
spheres instead of single-use projects.
OPPORTUNITIES
With most of the malls being anchored around a department store and / or a
hyper-market / super-market chain, the city has opportunity for development
of a specialty mall focusing exclusively on sale of home & furnishing products,
cars & auto-accessories, jewelry, electronics & white goods.
48
LOCATION MASTER
Micro-Markets
Areas covered within the micro-markets
OFFICE
CBD
M.G. Road, Kasturba Road, Lavelle Road, V.M. Road, Ulsoor Road, Residency Road, Infantry Road.
SBD
Indiranagar, Koramangala, Inner Ring Road, Old Airport Road, Bannerghatta Road.
ORR
Stretch from Hebbal to Silk Board junction.
PBD
Whitefield, Electronics City, Mysore Road, Bellary Road, Sarjapur Road.
Bangalore North
Bellary Road (Hebbal to BIAL).
RESIDENTIAL
Central
MG Road, Kasturba Road, Brunton Road, Lavelle Road, Richmond Road, Residency Road, Frazer
Road, Cox Town and Hanes Road.
Off-Central
Indiranagar, Koramangala, Jayanagar, JP Nagar, Malleswaram, RMV Extension, Sanjay Nagar, RT

Nagar.
ORR
HSR Layout, ORR (Marathalli - Silk Board Junction), Sarjapur Road, Haralur Main Road,
Kasavanahalli Main Road.
Whitefield
Whitefield, Brookefield, Mahadevpura, ORR (K.R.Puram to Marathahalli), Varthur Road
Old Madras Road
K.R. Puram, Ramamurthy Nagar, Battarahalli, Sonnenahalli, Hirandahalli, Budigere, DevanahalliHoskote Road
Bangalore North
Banaswadi, HRBR Layout, Hennur Road, Thanisandra Main Road, Bellary Road, Yelahanka, Kogilu,
Chokkanahalli, Bagalur Road, Doddaballapur Road, New Town Yelahanka, Jakkur
Hosur Road
Hosur Main Road, Electronics City, Neeladri, Chandapura, Anekal
Bannerghatta
Road
Bannerghatta Road, Begur, BTM Extention
Mysore Road
Mysore Road, Kengeri Satellite Town, Vijayanagar, Magadi Road, RR Nagar
Kanakapura Road
Kanakapura Main Road, Banashankari Extension and Uttarahalli
Tumkur Road
Tumkur Road, Rajajinagar, Hesarghatta, Jalhalli, HMT Township, Yeshwantpur
RETAIL & HOSPITALITY

CBD
M.G. Road, Brigade Road, Magrath Road, Richmond Road, Lavelle Road, Cunningham Road,
Langford Town, Brunton Road and Residency Road.
SBD
Indiranagar, CMH Road, Old Madras Road (till K.R.Puram Bridge), Banaswadi, Bellary Road (till
ORR), Koramangala, few locations on Bannerghatta Road and Hosur Road (till Silk Board Junction),
Kanakapura Road (till ORR), Jayanagar, JP Nagar, Vijayanagar, Sadashiv Nagar, New BEL Road,
Sanjay Nagar, Malleswaram, Rajajinagar and Yeshwanthpur.
PBD
Peripheral locations of Whitefield, ORR - Sarjapur, Electronics City and Hosur Road, Bannerghatta
Road, Kanakapura Road, Mysore Road, Old Madras Road, Tumkur Road and Bangalore North.
ABOUT VESTIAN
Vestian Global Workplace Services, an ISO 9001:2008 certified workplace services firm, specializes in providing
occupier-focused solutions for commercial, residential, industrial, retail and hospitality sectors. Our service portfolio
includes Strategic Advisory, Retail Business Solutions, Transaction Advisory, Integrated Service Delivery, Project
Services and Facilities Management Services.
We measure key deliverables of our business and align it to the clients strategic business goals. Our commitment to
achieve excellence and consistency in our service delivery models has helped us attain high standards of quality and
raised the bar for the industry.
Our experienced team has the required expertise and exposure in different sectors. Combining global best practices and
local knowledge, the team provides an integrated solution for all real estate requirements. Moreover, the belief in our
corporate philosophy - Delivering Measurable Results - helps us in providing solutions in keeping with global delivery
standard.
Strategic Advisory
Vestian Global Workplace Services Strategic Advisory Group is the Research arm of Vestian. They align business
strategies of corporate clients with their real estate portfolio strategy. Property market intelligence, economic, urban &
space planning principles and analytical methods all come together to provide strategic insights to real estate
occupiers. This approach guarantees recommendations that are thorough and meets not only the needs of today, but
of the future as well. We primarily cater to Developers, Builders, Investors and Occupiers.
Our studies span a spectrum of sectors:
Commercial, Residential, Industrial, Institutional, Hospitality.
Retail Business Solutions

Vestian Retail Business Solutions is the full-service retail arm of Vestian. We work with each client to understand their
objectives, keep them informed of associated risks, establish achievable goals, develop and implement effective
solutions. Vestian Retail Business Solutions provides end-to-end services such as Retailer Expansion Strategy, Real
Estate Services, Occupier Representation, Retail Concept Development & Consulting and Retail Project
Management.
Transaction Advisory
Vestians competent Transaction team provides an array of services focused on optimizing workplace solutions that
enhance the clients workplace services portfolio. We handle varied workplace related transactions such as
purchase, lease, disposal, lease management, lease renegotiations and restructuring. We provide solutions that are
aligned to the business objectives of our clients.
Project Services
The Vestian Project Services team is a one-stop solution for clients opting for Project Management solutions. We are
focused on delivering functional facilities that meet the clients space requirements. We provides supervisory &
coordination services to the client. We deliver consistent, reliable and viable solutions for local and international
markets. Our delivery process involves Preparation of Design documents, Co-ordination with Architects &
Consultants on design, Finalization of Vendors, Supervision of the project, Project Closure
Facilities Management Services
Vestians Facilities Management Services team helps clients focus on their core business activities while supporting
the entire facility. We act on behalf of the client to preserve the value of the property, while generating income. We
effectively oversee property performance and maintenance following international best practices, using high end
technology and precision processes. We manage &supervise the administration of residential, commercial, retail
and/or industrial real estate.
50
MANAGEMENT
Michael Silver
Chairman, Vestian
Michael serves as Chairman and is responsible for strategic oversight. He is a recognized
leader in the field of workplace services. He has established and led the growth of a large
occupier focused services corporation.
In 2006, he received the Ernst & Young "Entrepreneur of the Year" Award. He is also an
active member of the YPO (Young Presidents' Organization) and WPO (World
Presidents' Organization).
Shrinivas Rao, MRICS

CEO - Asia Pacific, Vestian
Shrinivas serves as Chief Executive Officer for Asia Pacific arm of Vestian. With over 20
years of experience in working with global clients throughout India, he is well-versed in
delivering solutions that work in India's very challenging workplace services markets.
Amongst the pioneers of professional workplace consulting services in India, he
successfully established and led operations of three multinational corporations in India.
He is widely recognized as a "change leader", known for his keen insights into workplace
services trends and innovative structuring services.
AUTHORS
Gorakh Jhunjhunwala, MRICS

VP, Strategic Advisory Group
gorakh @ vestianglobal.com, +91 80 40620100
Gorakh serves as Vice President and heads the Strategic Advisory Group. He guides the
team and is responsible for research output as well as client assignments. With over 10
years of work experience in investments, consulting and advisory domain, he has
executed and delivered assignments across asset classes. Gorakh pursued his masters
degree from Indian Institute of Technology, Delhi and holds a bachelors degree in
Architecture.
Shwetha H Pai
Associate Director, Strategic Advisory Group
shwetha @ vestianglobal.com +91 80 40620100
Shwetha has over 8 years of experience in real estate research and consultancy. As an
account manager for key residential focus clients at Vestian, she is responsible for
developing and implementing customized research, corporate strategy and project
conceptualization. A qualified urban planner from the School of Planning & Architecture
(SPA), New Delhi, she has worked in both Indian and US markets.
Dhara Dalal
Sr. Manager, Strategic Advisory Group
dhara@ vestianglobal.com +91 80 40620100
As a part of Strategic Advisory Group, Dhara contributes to property market reports,
research papers as well as client assignments. She has 6 years of experience and has
worked on investments and consultancy assignments across commercial, residential,
hospitality, retail and industrial sector. She holds an engineering degree with M. Tech in
planning from CEPT University, Ahmedabad.
Acknowledgment
The Vestian Strategic Advisory team would like to take this opportunity to extend our
gratitude towards all those who have helped us in our endeavor to produce this report.
We would like to especially thank the developers in Bangalore who have extended their
valuable support and market information to help us ensure authenticity of this report. A
special mention for our Corporate Communications Team, as well as Shailendra H C,
Sneha Sharma, Chandra Mohan Reddy and Manoj Joseph for their continued support &
cooperation. Our sincere thanks to Ramalekshman - Asst.Manager, Corporate
Communications for designing the report.
52
USA
India
China
UAE
Srilanka
OFFICES
INDIA
Bangalore (Corporate Office)
First Floor, West Wing,
DuParc Trinty,
#17, MG Road,
Bangalore 560 001
T: +91 80 4062 0100
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Acme Plaza
Unit No.501, 5th floor
Andheri Kurla Road
Andheri (East)
Mumbai - 400059
T: 022 42153060
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T: +91 44 39159351/ 66659351
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Plot 13, Road No. 10, Banjara Hills
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Telephone: +91 40 33782100
USA
Chicago (Head Office)
300 N. LaSalle Street
Suite 1850
Chicago, IL 60654
Telephone: +1 312 920 0290
Telephone: +86 21 3255 6366
CHINA
CHINA (Regional Office)
Unit 1207, No.546
Changning Road,
Changning District,
Shanghai 200 042
Telephone: +86 21 3255 6366
54
DISCLAIMER: This report contains information available to the public and has been relied upon by Vestian Global Workplace Services on the basis that it is accurate. Vestian
accepts no responsibility if this should prove not to be the case. No warranty or representation, expressed or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions and withdrawal without notice.

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Bangalore: Real Estate Market Report

Office | Residential | Retail | Hospitality

An ISO 9001:2008 Certified Company

A REPORT BY STRATEGIC ADVISORY GROUP

BANGALORE REAL ESTATE: 2013 AND BEYOND

million sqft stock

5.7 million sqft absorbed in H1 2013

Y-O-Y growth in absorption:

(including 2 million sqft of pre-committed space)

units launched in 2012

units absorbed in 2012

units launched in H1 2013

since year 2010

units absorbed in H1 2013

Annual Price Appreciation (2012-13):

BANGALORE: REAL ESTATE MARKET REPORT

million sqft expected

million sqft stock

since year 2010

Average Annual Rental Appreciation (2012 -13):

average occupancy rate

BANGALORE: REAL ESTATE MARKET REPORT

During the last two decades Bangalore gained prominence as a

growth corridor in India on account of rapid development of the

Bangalore witnessed a decadal population growth rate of 47%

The citys infrastructure is being constantly upgraded with

In the last two decades, real estate development in Bangalore

Bangalores residential sector continues to remain strong in

Hospitality sector is likely to witness entry of 3,793 rooms in next

Overall, Bangalore has great growth potential for real estate

Bangalores non-captive office space registered an absorption of

BANGALORE GROWTH STORY

Real Estate emerged as a major player in the economic growth

Table: Bangalore - Demographic Snapshot

Growth in the IT/ITeS industry that led to creation of large

Area: Bangalore City Corporation (sq km)

number of jobs across sectors which in turn led to migration

Area: Bangalore Metropolitan Area (sq km)

Total Population (Bangalore City Corporation)2

Today close to 2,840 IT/ITeS companies including at least

100 Fortune 500 companies operate out of Bangalore.

Total Population (Bangalore Metropolitan Area)

The multiplier effect of this has led to a real estate boom

and a flourishing retail and entertainment industry. The

The working population in the city is educated, multi-cultural

by the growth in the per-capita income of the city.

have contributed to the evolution in the living standards of

Figure: Growth of Bangalore City & its Population

Entry of Multi-National Corporations (MNCs) in office,

hospitality, retail and residential sectors.

The city witnessed entry of various MNCs like Texas

Advancements in the IT/ITeS industry led to entry of

many other national and international developers in the

Instruments, IBM, Intel, Motorola, Dell and Microsoft,

BANGALORE: REAL ESTATE MARKET REPORT

Population (in millions)

Revised Master Plan - 2007and Bangalore Development Authority (BDA)

to 60% of all Biotech companies in India and 50% of the total

Automotive majors like Volvo, Toyota, Honda, Mahindra and

Bangalore is home to some of the best R&D facilities in aerospace

Karnataka contributes to over 20% of national garment

ORR (Hebbal to Silk

CBD & SBD