Excellent News This Quarter for Commercial Property in Bangalore

There was a slightly greater increase in demand for commercial New projects in Bangalore this quarter over the same quarter last year. This occurred in spite of the fact there was not an increase in demand for property from large multinationals in Bangalore. Much of the increase in demand for commercial property in Bangalore took place in Whitefield, which is the IT hub of Bangalore. The absorption for real estate increased to 2.7 million square feet from the 2.3 million square recorded in the same quarter last year.  During the first quarter of last year, the gross absorption of commercial space stood also stood at 2.3 million square feet. The properties under development which will be delivered within the next 4 to 6 quarters and net absorption of property together make up gross absorption. The moderate increase in the demand for commercial property may also lead to a moderate increase in the demand for commercial projects in Bangalore, particularly in regions close to Whitefield. 

Whitefield the IT Hub in Bangalore

The region of Whitefield witnessed the greatest increase in the demand for commercial office space this previous quarter. Whitefield had more vacancies for office space when compared to the Outer Ring Road. This is not necessarily good news for Whitefield as the reason for more demand for commercial space in Whitefield had to do more with available space at the Outer Ring Road which has a vacancy of only 2 percent due to its far smoother connectivity with regions which have more real estate in Bangalore.  

Companies Which Acquired the Most Commercial Space

According to experts, commercial property in Bangalore continues to remain constraint however there is a large supply of space in regions such as Whitefield and Electronic City. TCS acquired the largest amount of commercial space during the previous quarter in Whitefield, an area measuring .55 million square feet. The second largest acquirer of space was Broad Ridge Financial which acquired close to .15 million square feet of commercial space. Home improvement company Lowe’s acquired .12 million square feet of commercial space in Embassy Tech Park. An increase in the demand for commercial space is usually a good sign for the creation of new affordable and luxury flats in Bangalore.

What to Expect in the Future

Experts believe that though the news was positive was commercial property in Bangalore it is unlikely to match the growth in the previous two years. In 2014 and 2015 the demand for commercial property in Bangalore stood at 11.3 and 12.2 million square feet largely due to the fact that companies such as Flipkart, Ola, and Amazon made huge commitments to their businesses.

Unlike the glamor of the previous quarter which saw the likes of Apple and Diageo acquire commercial property in Bangalore, this year the only glamorous company to acquire commercial space has been Lowe’s. The Outer Ring Road continues to be the prime locality for commercial real estate in Bangalore due to its close proximity to apartments in Bangalore from where employees can commute smoothly to and from their office. Overall there has been a drop of .2 million square feet in commercial space acquired this year over the same time the previous year.