Bangalore sees fall in Commercial Property Rentals

February 22, 2007	(4 votes, average: 4 out of 5)  Loading ...
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Real estate happens to be one of the key aspects playing a crucial role in development of India’s garden city, Bangalore. With property here seeing appreciation quite rapidly, there is a contradictory situation for commercial property, which has seen a drop of over 30% in the last one year. Whitefiled, a suburb of Bangalore has seen property prices shooting up consistently.  However, a correction has taken place in the IT neighborhood. There are some connectivity related problems accountable for the scenario. In addition, oversupply is also believed to be another major reason.

This year, a balance between demand and supply has not been achieved. Commercial absorption in Whitefield stood at a little over 2 million sqft last year. The supply situation is pegged at over 6 million sqft while demand continues to be at 2 million sqft. This marks the difference of exactly 4 million sq ft. Oversupply is considered to be an often occurring situation in Indian metropolis.

Likewise, the infrastructure seems to have lost pace with the real estate growth. With upcoming IT centers mushrooming away from the two main IT clusters, Electronic city and Whitefield, campus developments led the rentals to slip in Whitefield in order to grab the attention of major IT firms.

Sarajpur Road and Old Madras Road hold position among emerging IT centers. Here, accessibility is believed to be much better as compared to Whitefield.  Consequently, the going rate in the case of commercial rentals in Whitefiled, which stood at around Rs 30 per sq ft a year ago for property falling under the category of ‘A’ grade dropped to Rs 20 per sqft in the present day.

Earlier, the rentals used to hover at Rs. 50 per sq ft. whereas they are still at Rs. 44 sq ft today. The interest in Whitefield is lower nowadays. Connectivity is a major issue for those who have to commute to and from Whitefield and surrounding areas.

News Published Under:   Bangalore |

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