Whitefield, Outer Ring Road, and South Bengaluru drive office rental boom in IT capital

Whitefield, South Bengaluru, and the Outer Ring Road (ORR) person emerged arsenic the top-performing macro-markets, driven by their IT hubs, and proximity to residential areas. Among these, Whitefield has led the mode with a 12-year CAGR of 6.1 per cent, becoming Bengaluru’s astir sought-after commercialized hub. Other important contributors to the city’s rental maturation see South Bengaluru and the Central Business District (CBD), which proceed to pull divers concern segments.

Bengaluru has besides maintained a robust Advance/Decline Quarters Ratio of 7.0, reflecting a dependable maturation trajectory implicit time. In Q3 CY’24, the metropolis witnessed the largest spread betwixt the champion and worst-performing macro-markets, highlighting immoderate uneven rental trends wrong its boundaries.

Bengaluru loses GCC conflict to Pune, Hyderabad

Pranav Bhalla, Chief Financial Adviser and Head of Research and Consulting, CRE Matrix, observed that Pune and Hyderabad are successful a amended presumption to pull GCCs (Global Capacity Centres) compared to Bengaluru, due to the fact that of affordable lodging and cheaper rentals. “Pune has an vantage successful presumption of affordable lodging and a skilled workforce for GCCs, but it has besides seen higher increases successful rental costs for GCCs implicit time. However, Bengaluru inactive remains a larger hub for GCCs but hasn’t seen the aforesaid complaint of summation successful rental prices,” said Bhalla.

He added, “The displacement of GCCs to Pune from Bengaluru and Mumbai is driven by factors similar Pune’s acquisition institutions, affordable housing, and increasing infrastructure, including its metro system, which marque it an charismatic destination for some businesses and talent.”

“Office spaces successful Hyderabad and Pune are importantly cheaper than successful Bengaluru, with Grade A plus outgo seeing large differences compared to Bengaluru. GCC leasing enactment successful cardinal cities accrued by 8 per cent year-on-year betwixt January and June 2024, highlighting the increasing entreaty of these cities for concern operations. Additionally, some cities connection competitory endowment pools, easiness of doing business, and improved infrastructure, making them charismatic alternatives for companies seeking outgo optimisation without compromising connected quality,” said Sanjay Chatrath, Co-founder and Managing Partner, Incuspaze.

T M Mussavir, a Bengaluru-based existent property adept and entrepreneur, said, “Looking astatine the existent trends, it appears that Pune, Hyderabad and GIFT cities are becoming much preferred destinations for GCCs. That’s due to the fact that Bengaluru’s rental figures are rapidly rising and the occupation is compounded by mediocre infrastructure. Electronic City, which houses large manufacturing and IT firms, has the metro infrastructure ready, but the web is not operational. Similarly, Mahadevapura, which is Bengaluru’s tech hub, is seeing a dilatory gait of metro work. With specified factors, GCC’s earthy prime becomes Pune which has akin climatic conditions arsenic that of Bengaluru, with bully infrastructure, and increasing talent. However, with the existent authorities successful Karnataka rolling retired a promising GCC policy, we are optimistic astir the metropolis attracting much GCCs and infrastructure improving successful the adjacent 5 years.”

New model

The Real Estate Research Group astatine IIM Bangalore, successful collaboration with CRE-Matrix, unveiled the scientific, model-based Commercial Property Rental Index for the Indian bureau marketplace astatine the IIMB field connected Friday.

Developed nether the guidance of IIMB professors Venkatesh Panchapagesan and Soudeep Deb, and IIMB doctoral pupil Kapil Gupta, the scale covers Grade A and A+ rentals crossed 10 cities from Q1 2012 to Q3 2024.

Updated quarterly, it offers insights into some micro- and macro-markets, with plans to grow into different categories, including greenish leasing, Grade B and C properties, and warehousing.