Property investors looking toward Bangalore

Discussion in 'India property' started by Nicholas Wallwork, Nov 29, 2015.

  1. Nicholas Wallwork

    Nicholas Wallwork Editor-in-Chief Staff Member Premium Member

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    Property investors looking toward Bangalore


    While India has for many years been the darling of the worldwide economy, pushing further and further ahead, demanding more and more natural resources and attracting enormous overseas interest, the last couple of years have not been easy. Growth in gross domestic product has fallen from around 10% in 2007 to just 4.4% in the second quarter of 2013. However, there are signs of a recovery in the Indian economy although whether we will move towards rates of 10% GDP growth in the short term is debatable.

    The one thing which is becoming more obvious is the fact that commercial property across India is becoming more sought after by overseas investors and especially Bangalore. This is an area of India which has for many years now attracted significant investment in local infrastructure, commercial property and this has expanded across the region. Why are overseas investors now showing interest in commercial property in Bangalore?

    Fighting for office space

    First of all it is worth noting that the relative slowdown in economic growth across India is hitting all areas of the country. Indeed Bangalore is not immune from this slowdown and in fact it is starting to benefit the commercial property market which is going through something of a transitional period. As you would expect, at the first sign of a slowdown in economic growth many property developers began to mothball future investment plans although this still left a significant amount of office space in the pipeline.


    Quote from PropertyForum.com : “According to a law governing Real Estate/Land Acquistion in the India foreigners are prohibited from buying houses and land in India. Because the land and population ration is not equal in India and Government want to save their land and natural resources for the country citizens .”

    In recent years it has been difficult for some Indian property developers to find an “exit route” although this is beginning to change with limited supply and growing demand for commercial property in Bangalore. We have an array of overseas private equity groups ploughing hundreds of millions of dollars into commercial property across India with the likes of Blackstone and the Qatar sovereign wealth fund just two of the well-known names now targeting the region.

    Why invest now?

    At the moment vacancy rates for commercial property in and around Bangalore stand around 14% and rents have been a little subdued of late. However, if you look at some of the more popular investment hotspots the vacancy rate has actually fallen to around 5% in some of the more sought-after developments.

    As a number of property developers were forced to mothball or cancel new developments just a couple of years ago, there is a lack of quality commercial property available to overseas investors. This lack of stock and an increase in overseas demand is starting to firm up prices and many experts believe this will be the trend for the foreseeable future. There is even evidence that rents are now starting to push ahead after a difficult period for commercial property landlords.

    The future of India

    While it has been a difficult couple of years for the Indian economy with a significant reduction in economic growth, there is still growing demand from large western conglomerates looking to break into the Indian market. We have IT giants, leading supermarket companies and an array of other business heavyweights looking for commercial property and where demand for commercial property emerges, heavyweight property investment companies will follow.

    It will be interesting to see how the Indian commercial property market performs in the short to medium term with the current focus most definitely on areas such as Bangalore.

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  2. Ritu Mehta

    Ritu Mehta New Member

    Bangalore: The IT Hub of India, Bangalore is recognized throughout the world as the city is home for several top MNC’S. On the other hand, the Indian real estate market might look tedious with irrespective schemes but Bangalore city is hoping to embrace 100,000 more IT man power yearly. As it is a favorite investor’s destination, the Exposure city is experiencing a high demand from property Buyers and investors particularly in the East zone of Bangalore. Today Sarjapur Road, Whitefield, ORR and Old Madras Road are the most lucrative residential destinations for property buyers.

    Let’s have a look why the property buyers are moving towards Bangalore and what has been making the East Bangalore as the best option. There are multiple reasons to East Bangalore that makes it as the most sought after locality for property buyers.

    Home to many IT Companies:

    Proximity to Special Economic Zones and Neighborhoods of ORR, Marathalli, Whitefield, Sarjapur, Mahadevapura, Old Madras Road and HSR layout, East Bangalore houses many largest Tech parks, IT parks including a number of Multi National Companies and IT/ITES companies. Many IT professionals are looking towards East Bangalore to be close to their work places.

    Affordable as a buzz word:

    Even though it is a major micro market, Bangalore is offering many residential apartments at affordable prices and catching the eye of property buyers. Most of the IT professionals are finding an apartment within their budget with lower unit sizes.

    Connectivity:

    In Bangalore all localities have witnessed an exponential growth in the infrastructure aspect and it offers good connectivity to prime localities in the city. The signal free ORR stretch from Silk Board to Hebbal linking Electronic city to Whitefield is one of the major attractions of East Bangalore. The property owners who are living in East Zone localities are experiencing a benefit of many flyovers, extensions and under passes. The elevated expressway and Electronic city Flyover cuts travel time and offers facility to move state boundary of the city from city centre within a minute drive.

    Well developed Social Infrastructure:

    A rapid development in social and physical infrastructure has created an attractive portion for East Bangalore. Eastern part of the city houses reputed hospitals, large shopping Malls, Five star hotels and restaurants, Entertainment parks, educational institutions, component schools and many others. These extensive infrastructure developments are attracting many property buyers/investors and developers to design an extensive range of commercial and residential projects.

    Exceptional Return on Investment:

    Being as an IT destination, the residential properties in east Bangalore is offering an attractive appreciation value, especially on Old Madras Road. Because of its superb connectivity through elevated expressways, well developed designed social and physical infrastructure and proximity to IT parks, the area is ensuring a maximum rental return from a large number of working professionals.
     
  3. Longterminvestor

    Longterminvestor Active Member

    Countries such as India, with a massive population, should prove very lucrative for long-term property investors. It is not only the ever-increasing population of India but the fact that wealth is now starting to trickle its way down the population ladder (albeit slower than many of us had hoped). Bangalore is just one of a number of mainstream property markets in India which seem to be well positioned for the future.
     
  4. FWL

    FWL Member

    Will the ongoing unrest in India have any impact on the economy/property market?
     
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