Bangalore Economy and Real Estate thread II

[gentem]

In Bangalore, periphery is the new centre
Anil Urs

Lack of quality supply in the extended business district has made peripheral markets attractive.
July 2, 2011:

New space: Whitefield has seen several office properties coming up of late.

There has been an increasing trend of companies in Bangalore to relocate to peripheral markets such as Outer Ring Road (ORR) and Whitefield due to ready availability of large space.

Whitefield and ORR areas are favoured destinations for long-term commitments by corporate houses. This development is coming at a time when the corporates are looking at long-term expansion or to pursue their consolidation plans.

Prominent companies moving in to peripheral areas are TCS, Cognizant Technologies, NDS, Huawei Technologies and Infinite Computer Solutions.

The peripheral market witnessed closure of a few mid-sized transactions with absorption estimated at 700,000 sq.ft during the first quarter of 2011. Electronic City and Hosur Road witnessed only marginal leasing activity during the quarter. International property consultant CB Richard Ellis attributes this movement to peripheral markets to lack of Grade-A supply in the extended business district (EBD).

EBD areas are Indiranagar, Koramangala, Old Madras Road, CV Raman Nagar, Bannergatta Road, JP Nagar, Jayanagar and Mysore Road.

The peripheral areas saw almost 1.6 million sq.ft of fresh IT space. The ORR market saw absorption of almost 620,000 sq.ft. As most projects near completion or under construction have registered healthy pre-commitments on the ORR stretch, rentals have shot up 4-5 per cent. With all these activities happening in EBD absorption stood at 250,000 sq.ft.

“The lack of Grade-A supply in the EBD led to increase in rental values by almost 9 per cent on a quarter on quarter basis, predominantly in the second generation office space,” said a report by property analyst CB Richard Ellis.

With no fresh supply in the Extended Business District in the near term, most companies have plan to relocate to peripheral markets. “Technology sectors, the major driver for absorption in Bangalore, continue their location and expansion in their chosen clusters of Outer Ring Road and Whitefield. However, most of the larger commitments have come about in the Special Economic Zone developments in these locations. A number of other sectors continue to show good absorption and have chosen to make commitments in the various parts of CBD (Central Business District) and the various secondary business district (SBD) of the city,” said Mr Shivaram Kumar Malakala, Executive Director, Habitat Ventures.

As for the other areas, lack of supply in the south Bangalore market of Bannergatta Road, JP Nagar, Jayanagar and Mysore Road continues to pose as a deterrent for occupiers planning to set up their operations in this location. “Office space development in this market is limited to Grade-B buildings with no new supply of Grade-A space expected in the near future. Absorption was recorded at around 120,000 sq.ft; rental values appreciated by almost 14 per cent on a quarter on quarter basis,” explains CB Richard Ellis.

The CBD of MG Road, Richmond Road, Residency Road and Lavelle Road witnessed an increase in number of enquiries from corporate houses preferring to expand within the CBD.

Prominent companies moving in to CBD/SBD areas are Swiss Re and Thomson Reuters.

While the CBD market did not witness infusion of any new supply, a large number of mid-sized transactions by companies were finalised with absorption recorded at around 180,000 sq.ft (primarily in second generation space). Also, due to increase in demand and limited availability of Grade-A supply or expected to be made available during the current year, rental values increased by almost 15 per cent on a quarter on quarter basis.

The north Bangalore market is an attractive destination for corporate occupiers. However, it suffers from lack of quality space which hampers leasing activity in this market. High demand amid low supply led to an increase in rental values by almost 14 per cent quarter on quarter basis.

Phonix market city and park square malls will open in whitefield in august, will give tough competition to forum value mall..

With sez act that requires minimum 25 acres expiring in 2012, CBD should be back with the bang.

[avinash2060]

image hosted on flickr


http://www.colliersinternational.com...fice-1Q-11.pdf
Page 11

[Leo_r]

‘4.8 lakh ha of public land encroached on in Karnataka' ...

http://www.thehindu.com/todays-paper...icle2162948.ec

[avinash2060]

The lackadaisical attitude coupled with mismanagement by the Bangalore Development Authority (BDA) officials has resulted in rampant encroachment and misuse of civil amenity (CA) sites and plots reserved for parks and playgrounds in the garden city of Bangalore.

According to the report of Task Force for Protection of Government Land, about 3,011 acres meant for CA sites, parks and playgrounds has been encroached upon by well-heeled individuals across the City. The BDA has a mere 780 acres in its possession, against 3,791 acres.

As per the BDA rules, 25 per cent of the total land in any layout, including those developed by private developers, should be kept aside as CA sites (10 per cent) and parks and playgrounds (15 per cent). Since its inception in 1976, the BDA has formed 432 layouts on 15,165 acres.

Developer-official nexus
The report pointed out that the BDA is not insisting on private layout developers to reserve 25 per cent of the land for civic amenities, parks and playgrounds.

The greedy developers in collusion with the officials are forming sites on this land also. For instance, on one acre land (43,560 sq ft), only about 20 sites measuring 30/40 sq ft can be formed after handing over 45 per cent of land, including 20 per cent for roads, to the BDA. By not providing 25 per cent of lands for civic amenities and open space, another eight sites can be formed and sold.

“As per the Karnataka High Court order, CA sites belong to the BDA irrespective of whether the sites are handed over to the Authority or not. The BDA has not taken any action to enforce the ruling and has allowed the law-breakers to go scot-free. The BDA has not been able to discharge its statutory duty of ensuring 25 per cent of layout area as open space and civic amenities,” the report stated.

Since 1976, the BDA has given approval for 567 private layouts. Task Force Chairman V Balasubramanian has slammed the BDA for the slow pace at which land recovery is proceeding. The BDA has so far identified about 2,878 acres of encroachments. In 2010-11, the BDA recovered only 73 acres.

Balasubramanian has also taken exception to its plan to conduct a total station survey with three mm accuracy to find out its encroached land.

“As the BDA would have the layout plans with details of sites meant for allotment, CA sites, parks and open space sites, it is possible for the engineering section to locate encroachments and the total station survey is not needed for such purpose,” he said.

http://www.deccanherald.com/content/...s-grab-ca.html

[gentem]

Now Pune edging out Hyderabad
Sudipta Sengupta, TNN | Jul 7, 2011, 01.26am IST

HYDERABAD: After Bangalore and Chennai, it's Pune that seems to be beating Hyderabad in the realty race. With 'T' agitations erupting in the city yet again, investors keen on putting their money on property here are now turning to the Maratha land in the hope of better returns. Also spelling doom for the once booming sector are cash-rich investors and developers from outside the state who are fast dropping Hyderabad from their radar due to frequent disruptions. One among them is a Dubai-based group that was expected to invest a whopping Rs 100 crore in the local market this year. The firm has now backtracked on its decision, sources said.

While it remains to be seen if this big investor too heads for Pune, realtors here say that they are indeed losing a lot of business to the tier-II city, which was once way behind it in the real estate market. And apart from Hyderabad's poor industry ratings, which are now on par with small towns like Vadodara, it is Pune's impressive IT growth, affordable property prices and stable political atmosphere that's pulling investors to its shores. In fact market analysts from the city say that all corporate firms on expansion mode are now vying for space in Pune as against Hyderabad.

And realtors squarely blame the government for this shift. They rue that it is the government's inability to take a conclusive decision on the Telangana issue that has pushed Hyderabad's once booming realty story towards the graveyard. "It is the uncertainty over the Telangana issue that is resulting in our loss in business to Pune," said D Sreedhar Reddy, president, Andhra Pradesh Realtors Association ( APRA) stressing how the city has already lost several clients to Bangalore and Chennai over the last two years, since the time the 'T' turmoil first hit Hyderabad. "This time around too, a chunk of our clients who were supposed to pick up commercial space here have put their decisions on hold. Their numbers will further rise if this situation persists," Reddy said. In fact, in the last few days alone, several investors with elaborate business plans in the city have shelved their proposals owing to the unrest, sources claim.

And it's not the commercial market alone that has taken a beating. Even the residential segment is down in the dumps, say industry analysts. From being among the top six metro cities in India not too long ago, Hyderabad has almost dropped to the level of tier -III towns now. "If the prices here were once compared to cities like Chennai and Bangalore, there are now compared to cities like Baroda. There has been no rise in price for over four years," said real estate consultant B V P Raju of Ghar4U adding how the recent troubles have negatively impacted the sentiment of builders here.

Home-grown firms apart, even `outstation' developers seem to be feeling the `T' jitters. Terming the current state of realty in Hyderabad as "most unfortunate", these builders say that they would have to give their future projects in the city a second thought if the political crisis is not addressed. "We will definitely fulfil our commitments made to clients in Hyderabad. But whether we would continue here post the completion of our current ventures, is now debatable," said a senior executive of a leading Bangalore-based construction firm with a significant presence in the city.

Though some like Mantri Developers, also from Bangalore, are still optimistic because of the recent spurt in recruitments in the local IT industry, they do agree that a decision on the Telangana issue should be taken at the earliest. "It will only help in stabilizing the market as nobody enjoys uncertainty. But, that does not mean we are withdrawing from Hyderabad anytime soon. Our ventures here will go on as planned," said Sushil Mantri, chairman and managing director of the firm.

There was a 2 day bundh in hyderabad this week But pune is sister city of bangalore

[gentem]

Inflation or not, India Inc hiring on all fronts; IT-BPO leads
Submitted by Trisha Thomas on Tue, 07/05/2011 - 14:55

Economists and experts worrying of an impending economic slowdown caused by rising prices, but hiring managers in Indian companies are not, according to the latest hiring numbers from Naukri.com -- India's biggest hiring portal.

The company noted a 4% rise in hiring activity in June compared to May and a 19% jump year on year.

The jump has come after a 2% rise in May and a 2.1% dip in April. The Naukri hiring or job index was up 3.3% in March (see figure.)

Overall, the picture seems to be one of optimism in hiring.

Hitesh Oberoi, Managing Director and CEO of Info Edge, which owns Naukri.com, said he expected "structural issues," such as inflation to be successfully managed in the coming months.

"While it is possible that the slowdown in economic activity may lead to a lower pace of hiring, supply side issues are more structural and therefore short-lived. Thus economic slowdown may not necessarily affect the pace of hiring," he said, commenting on the strong hiring numbers.

There is no slackening on the recruitment front and across almost all sectors are hiring at a steady pace, he added.

Part of the strength in the numbers may be attributable to the fact that more and more employers are using Naukri.com as a tool, though the company tries to make its index as much of a barometer of Indian hiring as possible.

Most of the strong hiring was the result of high demand from the IT and BPO sector, which saw a 12% jump in its hiring levels in June over May. In May, they were up only 4% though they were up 9%-10% in March over February.

Other strong industry performers were Banking and Capital Goods, up by 9% and 7% respectively; Pharma sector (up by 9%). Telecom, however, saw a dip of 17%.

Hiring activity for Hyderabad, Bangalore and Chennai moved up by 15%, 10% and 9% respectively in June-11 as compared to May-11. Hiring activity for Mumbai moved up by 3% while Pune witnessed steady hiring levels. However, the job index for Kolkata and Delhi dipped by 6% and 4% respectively in Jun-11 over May-11.

[avinash2060]

After successfully raising Rs 520 crore in June 2011, ASK Property Investment Advisors (ASK PIA), now plans to raise Rs 480 crore from high networth individuals ( HNI )) to invest in residential properties.
ASK PIA, a venture of the ASK Group was set up to manage and advise real estate dedicated funds.

“We now plan to raise Rs 480 crore in next six-months period from HNI’s to invest in residential properties in Tier-I cities Mumbai, Delhi and Bangalore ,” ASK Investment Advisors, Executive Director, Sunil Rohokale told reporters here.
The company is looking at project level investment and is having an active discussion with property developers in New Delhi, Mumbai and Bangalore, Rohokale said.

The company had successfully raised Rs 520 crore in June 2011 for a domestic realty fund. Around 250 investors have participated in the second fund that was launched in January this year, with average size of Rs 2 crore per investor.
The fund will focus on mid-segment residential development and execution, ASK Property Investment, CEO and MD Amit Bhagat said.

http://www.indianrealtynews.com/real...alty-fund.html

[engineer.akash]

Pune IT Park in need of better infrastructure

Since its inception, the Hinjewadi Industries Association (HIA) has played a pivotal role in taking up the issues relating to the IT Park and Hinjewadi. The HIA, which has over 35 members including big IT companies, recently launched a ‘Hinjewadi First’ initiative to push for the facelift of the industrial area.

Unmesh Bhathija, vice-president of HIA, shares his views with Arun Jayan regarding the campaign and role of HIA in overall development of Hinjewadi.

What prompted HIA to come up with ‘Hinjewadi First’ campaign? How has the response been?

The need to launch the ‘Hinjewadi First’ campaign stems from the data that we have today in terms of the growth that the IT Park at Hinjewadi foresees. Currently, there are around 70,000 people who commute daily to Hinjewadi for work. There is a single road that connects the Mumbai-Bangalore bypass to the IT Park. The road gets choked in peak hours.

With the growth anticipated to double in the next two years, the current infrastructure is bound to collapse. The initiative of the campaign is to support the growth of the IT industry over the next few years. The IT Park should have world class facilities to attract more companies to set up their base in Pune. Well, the response to the campaign has been good so far.

We have met MP Supriya Sule and she has proposed to be in charge of coordinating the various activities with the authorities concerned to improve and enhance the infrastructure in Hinjewadi.

Which are the areas that need urgent attention for overall growth of Hinjewadi as an IT hub?

Public transportation, security, road widening, completion of the new road that runs adjacent to VITS Hotel connecting phase 1, power supply to phase III of the Rajiv Gandhi Infotech Park and setting up of a state-of-the-art fire station in phase II are the areas that need urgent attention.

What are the steps taken by HIA for the facelift of Hinjewadi? We continuously work with the traffic department, the Pimpri Chinchwad Municipal Corporation (PCMC), the MIDC and the Hinjewadi Gram panchayat. With the help of the traffic police, MIDC, PCMC and the state government, we could get the road connecting Kala Khadak to Hinjewadi usable.

The MIDC has been very supportive of the issues that we have raised in the past. Our endeavour is to interact with various agencies and help them achieve our objectives.

Many, including Infosys founder Narayana Murthy, opined that Pune will overtake Bangalore as the IT destination? How do you see the present scenario and future growth?

IT exports from Karnataka are worth $22 billion out of which $20 billion worth of exports are from Bangalore. Maharashtra has IT exports of $10 billion out of which Pune contributes $6 billion (Hinjewadi IT Park contributes exports to the tune of $4 billion).

The gap is huge when you compare revenues generated by Bangalore with Pune. The only way Pune can outgrow Bangalore is by taking up a focused approach for infrastructure development.

DNA

R&D is close to nil in Pune,so let NRN and Pune stop dreaming of overtaking Bengaluru.

22$ billion - Karnataka IT export

2$ billion- Mysore and Mangalore i.e. 200 crore $ = 9000 Cr exports from Mysore and Mangalore

Bangalore is way ahead of Pune.

[naveen_blr]

22Billion -Karnataka
10Billion - Maharashtra
I assume the below
10Billion - AP
10Billion - TN
5Billion - NCR
3Billion - WB

wat say guys?

[sunilkumar]

~22Billion -Karnataka
~11Billion - TN
~10Billion - Maharashtra
~7Billion - NCR
~7Billion - AP

Cities share
Bangalore ~ 30%
Chennai ~ 16%
NCR/Pune/Hyderabad ~13%
Others~ 15%

Blr lost its charm & reached saturation level. IT growth is not good.

Hyd doen't have much problem Except 'T' issue. Insfrstructure, Ind policies scores here.

Chennai IT growth is pretty impressive. most of Mass recruiting showing major interest on Chennai than Blr/Hyd. Large availabality of tech resources, Infra scores.

NCR is doing well. Delhi Brand ,infra scores here.

[avinash2060]

Originally Posted by sunilkumar

~22Billion -Karnataka
~11Billion - TN
~10Billion - Maharashtra
~7Billion - NCR
~7Billion - AP

Cities share
Bangalore ~ 30%
Chennai ~ 16%
NCR/Pune/Hyderabad ~13%
Others~ 15%

Blr lost its charm & reached saturation level. IT growth is not good.

Hyd doen't have much problem Except 'T' issue. Insfrstructure, Ind policies scores here.

Chennai IT growth is pretty impressive. most of Mass recruiting showing major interest on Chennai than Blr/Hyd. Large availabality of tech resources, Infra scores.

NCR is doing well. Delhi Brand ,infra scores here.

It will be foolish to write off Bangalore .Bangalore has three elevated Roads ,Metro will operations soon .Within next 3 years Monorail,Metro Phase2 and HSRL will be operational,signal Free Corridors ,Elevated Roads inside city and 216 Road widening Projects ,also land notification for PRR is Underway .People must be fools to say Bangalore has lost it's charm .IT will happen Bangalore will lead office space absorption in India .ITIR,Extended Whitefiled and Extended Ecity,PRR Corridor ,Bidadi (knowledge City) will be pivotal in Bangalore's Future IT Growth .None of the other cities of Karnataka can attract as much investment as Bangalore Does

Nowdays anything related to IT is synonymous with Bangalore
Regarding HYD Stability is key to progress in any city .Hyd will be unstable till 2014
Chennai only locals work there people from north india and other parts of south india have other ideas
NCR high land prices and SC strking down land acquisition is a Major setback

[engineer.akash]

Originally Posted by avinash2060

It will be foolish to write off Bangalore

Nowdays anything related to IT is synonymous with Bangalore

+1

No city in India can snatch TECH HUB status from Bangalore.R&D Capital of India,like it or not

[avinash2060]

City’s real estate giants have set their sights on the Namma Metro route map. With the mass rapid transit soon to begin its operations from Byappanahalli to MG Road, the demand for land has increased and the prices of property, along the Metro alignment, have skyrocketed to a whopping 15%.

Besides Ramamurthynagar, Kasturinagar, Banaswadi, Indiranagar, CMH Road, Halasuru and MG Road, real estate biggies are exploring options around Jayanagar, RV Road, Malleswaram, Yeshwantpur, Peenya, Magadi Road and Mysore Road, where the Metro network is expanding.

“Ever since the Metro work began, realty business has seen a 10% to 20% growth,” said Ganesh Vasudevan, vice-president and business head of indiaproperty.com, a web-based real estate agency.

Karun Varma, MD, Jones Lang LaSalle, said, “Areas, like Madivala and Whitefield, have seen massive real estate activities. Metro would come as a huge relief, connecting the north-south-east-west corridors of the city.”

Both Vasudevan and Varma hinted that a number of MG Road and central business districts are coming up in the city, making it more opportune for both Metro and the real estate business as a whole.

http://www.dnaindia.com/bangalore/re...altors_1563131

[engineer.akash]

Originally Posted by gentem

In Bangalore, periphery is the new centre
Anil Urs

Lack of quality supply in the extended business district has made peripheral markets attractive.

This article says Mysore Road too is on the growth radar,can someone throw light on the projects underway in this part of Bangalore?

[naveen_blr]

Originally Posted by engineer.akash

This article says Mysore Road too is on the growth radar,can someone throw light on the projects underway in this part of Bangalore?

1.Global Village is quite big ..
2.Gandhi Park
3.Bidadi Knoweledge City - if it works out
4.Metro will reach the ORR as of now & Kengeri later.
5.Toyota expansion
6.CRS will also make out to reach towns like channapatna/bidadi/mandya/ramanagaram
7.Has Rajiv Gandhi Univ work started in Ramanagaram?
Add to the list.

[naveen_blr]

Originally Posted by avinash2060

It will be foolish to write off Bangalore .Bangalore has three elevated Roads ,Metro will operations soon .Within next 3 years Monorail,Metro Phase2 and HSRL will be operational,signal Free Corridors ,Elevated Roads inside city and 216 Road widening Projects ,also land notification for PRR is Underway .People must be fools to say Bangalore has lost it's charm .IT will happen Bangalore will lead office space absorption in India .ITIR,Extended Whitefiled and Extended Ecity,PRR Corridor ,Bidadi (knowledge City) will be pivotal in Bangalore's Future IT Growth .None of the other cities of Karnataka can attract as much investment as Bangalore Does

Nowdays anything related to IT is synonymous with Bangalore
Regarding HYD Stability is key to progress in any city .Hyd will be unstable till 2014
Chennai only locals work there people from north india and other parts of south india have other ideas
NCR high land prices and SC strking down land acquisition is a Major setback

Avinash your take is correct except for the investment in infrastructure during the initial years of 2003-2006 ...Hydrabad/Chennai have invested heavily in infra and with Union Govt inline with State govt the push was good. From the Metro in both cities to US Consulate in Hydrabad.
But things have changed now - Bangalore is back on track & is giving serious competition for new investments in IT although we dont have much help from the centre

[Master of Disguise]

Originally Posted by avinash2060

It will be foolish to write off Bangalore .Bangalore has three elevated Roads ,Metro will operations soon .Within next 3 years Monorail,Metro Phase2 and HSRL will be operational,signal Free Corridors ,Elevated Roads inside city and 216 Road widening Projects ,also land notification for PRR is Underway .People must be fools to say Bangalore has lost it's charm .IT will happen Bangalore will lead office space absorption in India .ITIR,Extended Whitefiled and Extended Ecity,PRR Corridor ,Bidadi (knowledge City) will be pivotal in Bangalore's Future IT Growth .None of the other cities of Karnataka can attract as much investment as Bangalore Does

Nowdays anything related to IT is synonymous with Bangalore
Regarding HYD Stability is key to progress in any city .Hyd will be unstable till 2014
Chennai only locals work there people from north india and other parts of south india have other ideas
NCR high land prices and SC strking down land acquisition is a Major setback

Just a small correction SC banned projects in Noida Extension...which noways affect IT industry....is miles away from Delhi...and is a residential hub and not commercial.....cheers

[R2IChennai]

Originally Posted by gentem

That is base 2007 index. Among metros only bangalore and hyd prices reduced comparatively.

I think Bangalore and Hyderabad soared faster than other metro between 2004-2007.

Blore was more expensive than Chennai in 2007 now Chennai is almost 50% more expensive (I wonder why it did not CRASH yet)
I think in Today's market Bangalore is good place to invest being the number 1 IT city and fastest growing metro along with lots of infrastructure development going on.

Unfortunately I am stuck with my investment in Chennai and Hyderabad

[R2IChennai]

Originally Posted by avinash2060

It will be foolish to write off Bangalore .Bangalore has three elevated Roads ,Metro will operations soon .Within next 3 years Monorail,Metro Phase2 and HSRL will be operational,signal Free Corridors ,Elevated Roads inside city and 216 Road widening Projects ,also land notification for PRR is Underway .People must be fools to say Bangalore has lost it's charm .IT will happen Bangalore will lead office space absorption in India .ITIR,Extended Whitefiled and Extended Ecity,PRR Corridor ,Bidadi (knowledge City) will be pivotal in Bangalore's Future IT Growth .None of the other cities of Karnataka can attract as much investment as Bangalore Does

Nowdays anything related to IT is synonymous with Bangalore
Regarding HYD Stability is key to progress in any city .Hyd will be unstable till 2014
Chennai only locals work there people from north india and other parts of south india have other ideas
NCR high land prices and SC strking down land acquisition is a Major setback

Guys in Chennai Thread some one posted NDTV profit link
Bangalore's share is 36% nationally and others major metros in the range of 17 to 14%, Kolkata i think is not yet crossed 5k figure (IBM and CTS are only ones)

[MeMumbaikar]

I think at this stage its still anybody's game.

watch out for Navi mumbai, especially Panvel.


i will not be surprised if the Panvel-Hinjewadi formed an IT belt along the MPE