Commercial properties in the city are doing very well with less than 5% occupancy rate, which is one of the least in the country. Expert are expecting less than 3% in coming years. Lease rentals have appreciated by more than 20% in last 2-3 years.
Transport infra and power cuts have been major issue affecting occupancy level in Whitefield. Ecomm and start-ups have played a major role in absorption of small offices. Flipkart took 2-3 mn sqft office space in one go which is unheard before.
REITS are showing lot of interest in city so lot of developers are cleaning their portfolio in terms of cross ownerships, clearances etc as law requires lot of transparency to enable trusts to invest. Bangalore commercial market is the best placed among major Tier 1 cities to place the bets on. Retail is doing poorly in Bangalore due to subdued interest and Bangalore being epicentre of ecommerce.
Bangalore Residential Market Segment
Bangalore market is always known to be market with less speculative activities as compared to other markets because still 70% of demand comes from end-users segment. Developers were inching up prices by 5-7% or more in all areas historically but doing this in future seems impossible.
Luxury segment is taking a big hit because luxury homes are mostly 2nd-3rd home buying for mid management IT professionals. Issues such as low salary hikes, mid management level crisis and fewer onshore opportunities are bringing down this aspiration buying. So this segment is the most hit with prices are already down by 15-20% pan India.
Emerging trend in Bangalore is lot of compact apartments launches in the size of 500-700 sqft and costing around 25-30 lacks to cater to new entered professionals.
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