Bangalore residential market is booming at present because it witnesses a lot of stir in form of novel investments from major realty barons in India, including DLF Ltd. Bangalore has always been known as the Silicon Valley of Asia and thus had investments trickling in; in form of investments from IT & ITES companies. Few Points will help you to understand the over all scenario of Bangalore market.
- Bangalore is witnessing a stable 13% average annual price appreciation rate in residential sector from past 4 years.
- 20,600 residential units were absorbed in the year 2011.
- The CAGR for residential sector during the period 2008-11 have been a stable 15%.
- Bangalore IT/ITES has the highest growth rate that too in double digits.
- The city has a population of 9.6 million which is predicted to grow up to 14 million by the year 2021. Thus increasing the obvious demand for multi-storey apartments.
- The multiplier effect in the IT/ITES industry leads to a boom in realty industry as well.
- Currently the Silicon Valley abodes 2,840 IT/ITES companies which includes more than 100 Fortune 500 companies.
- Bangalore has more than 5400 schools and about 620 colleges, which is a result of an equated growth in quality of education and living standard of the city.
- These institutions include IISC, ISI, IIMB, NLSUI, NID, IIITB and many more.
- The city has a social and commercial infrastructure which establishes it as a ‘World City’ with ample entertainment, hospitality and retail options.
- This city incorporates more than 31 industrial hubs including PSU’s as well as private IT/ITES, Bio-technology, Engineering, Aviation, Textile and other companies.
- 90 % working class
- World’s biggest Out Sourcing HUB.
- Core END User Market.
- To top it all The Climate is Excellent.
Some more Inputs to understand the city:
Bangalore, or Bengaluru, as it is known today, was founded by Kemp Gowda. who built a mud fort at the site in 1537. It has developed over the years into an industrial and technological hub in India.
The moderately good climatic conditions and lucrative employment prospects lure lots of people and youngsters to this south Indian IT Hub which is called Bangalore. The IT sector is booming with the sky high prices consequently paving the way for a great real estate market in Bangalore. The Bangalore real estate market is abuzz with the news of the prices sky rocketing and it is even due to the global economy and huge investments made by the non resident Indians. You should realize that the Indian economy has been globalized and a lot of NRI investments are running high in the city. The realtors have good support policies for a foreigner to invest his money and raise the percentages in the real estate market of Bangalore. The staggering amount of population is another cause for concern among all in Bangalore real estate market. The more people throng the city you need ample dwelling places for them. The residential real estate can be very much benefitted by NRI investments if he is planning to make a second home there. The investors are called in from all round the globe to discuss the finer details as to how to raise the NRI investments from the point of view of the realtors and keeping the clients interests also in mind. As the property prices are charging exorbitantly now is the time for the affordable homes to recede into the background. However the demand for villas, flats, bungalows, huts and all are increasing due to the lavish lifestyles led by the NRIS and even the original inhabitants of the city can easily afford it on their attractive pay package. Its all about the investments which have been made by a foreigner. He may have bought a flat or villa in Bangalore some time back and with each passing year the cost increases to a lucrative amount. Now after coming back to his own country and finding settlement you can either sell off the property at a great price, rent out part of it or live in it yourself as per the convenience. This is a very general and sketchy article about enhancing the NRI investments in the Bangalore real estate market. The more investments you can make in whichever way and the best way to do it when the market prices are really high. These days living costs have really sky rocketed and making yourself based in Bangalore is no joke given the kind of huge rents one calls for. You can come to know more about the same on the real estate websites which are given in more lucid and concrete details. The real estate market is always not the same and you can keep tabs on it by constantly monitoring the prices and falls of the housing estates. The channels of communication should be open between the client and the realtor for a comprehensive understanding and conclusion to seal the deals and make everyone happy in the bargain.
Why Bangalore has seen an edge in real estate investment?
A comparison of Bangalore Vs other South Indian Metros
We all know that New Delhi and Mumbai are slowly but surely giving way to new cities like Pune, Gurgaon and Bangalore when it comes to the real estate market. As a fact, Bangalore recorded an 8% growth in real estate in 2012, which is quite an enviable figure.
But how does Bangalore fare when it is compared to other Southern cities like Chennai and Hyderabad?
I have a friend who is a sworn Chennaiite, and has shifted to Bangalore because of his job. Though he was cribbing relentlessly, he calls Bangalore his home now and has invested in 2 properties here. I felt curious, as to why would someone who loves Chennai so much be ready to settle in Bangalore? He gave me a few valid reasons:
Bangalore climate – a huge plus point - It is true the salubrious climate of Bangalore does make living here a beautiful experience. The best part is that this climate lasts all year long and makes life a lot more comfortable.
The burgeoning IT industry - Though Hyderabad has an impactful IT presence, the crown for the IT capital goes to Bangalore without any doubt. It attracts IT professionals from all over the country; my friend intimated me that there is no place better than Bangalore when it comes to IT product development.
Now with a growing IT populace there are 2 things that emerge, firstly a need for living quarters and secondly, surplus income; both of which has the capacity to boost the real estate market.
The middle class in the city enjoys a better quality of life in Bangalore - Comparing Bangalore to Chennai my friend rather reluctantly comments how Bangalore is much ahead when it comes to social infrastructure. Moreover when comparing living quarters, Chennai falls far behind regarding size, aesthetics and design.
Space for development - Being an old city, the Chennai city area has almost used up its resources. Younger cities like Bangalore and Hyderabad still have space for development making them real estate friendly.
Bangalore is a cosmopolitan city - Among the new young cities that are making their presence felt, Hyderabad comes close on the heels of Bangalore. However, my friends inform me that Bangalore is a much more cosmopolitan city and hence easier to fit in. Bangaloreans with there accommodating nature make it easier for people from other states to feel comfortable, accepted and a part of the city.Moreover Bangalore has always been a student’s haven, with many nationally ranked educational institutions. Students from all over the country and even international students make a vibrant community here making Bangalore a receptive and progressive city.
Political strife - A healthy political atmosphere is absolutely necessary for the growth and improvement of every aspect of a city. The recent troubled environment in Hyderabad and the whole of Andhra Pradesh makes any kind of positive progress unlikely. Where as Bangalore on the other hand has been experiencing some political stability making it favorable for growth and development. With this, my friend concluded that Bangalore is slowly emerging as the favored place for many and the unique advantage it has to offer certainly gives it that edge above the other southern cities.
Over All the Private Equity Investment Compare to Bangalore:
Report by Cushman & Wakefield (C&W)
Bangalore’s realty market received the maximum private equity investment of nearly Rs 2,000 crore in the country during January-September 2013 with increased demand for leased office assets from institutional investors, according to property consultant Cushman & Wakefield (C&W).
Private equity (PE) investment in Bangalore rose by 79 per cent to Rs 1,979 crore during the first three quarters of 2013 calendar year as compared to Rs 1,106 crore in the year ago period, C&W said in a report. “Bangalore witnessed the highest level of announced investment value in 2013 at Rs 1,979 crore ($317 million). This was due to a commitment by a sovereign fund into a platform focused on leased office assets,” C&W said.
Explaining the reason behind Bangalore emerging on top in PE investment, C&W Executive Managing Director South Asia Sanjay Dutt said: “Bangalore is an IT capital and hub for south India. Profile of developers in the city is very good.”
He also attributed higher PE Investment in Bengaluru to availability of properties across all segments at reasonable and attractive valuations. Sobha Developers, Puravankara Projects, Prestige Estates and Brigade group are the major developers in Bangalore. According to the report, PE investment in Pune jumped more than three-fold to Rs 780 crore during January-September period against Rs 234 crore in the same period last year.
National Capital Region’s (NCR) realty market got Rs 612 crore as PE investment, up 20 per cent from Rs 512 crore during the period under review. In NCR, all the investments were made in the residential asset class.
Mumbai, which traditionally attracted the maximum investments in the country, was the only city to witness a decline of 43 per cent in PE investments. The financial capital received Rs 720 crore during the first three quarters of 2013 compared with Rs 1,262 crore in the year ago period. “However, investment activity in the city (Mumbai) is expected to increase with a few large deals entailing an investment of Rs 2,000 crore in office assets currently in the pipeline,” the consultant said.
Overall, PE investment in the real Estate sector grew by 26 per cent to Rs 4,716 crore in the first nine months of this year despite slowdown in the property market. “The healthy increase was primarily due to a rise in investments in leased income generating office properties by institutional investors. Apart from offshore funds, domestic capital allocated for income generating office properties is also being raised and deployed,” Issued by C&W.
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