Bangalore or Bengaluru, the capital city of Karnataka has been the undisputed capital of the IT and ITES capital of India and also the most favored destination for the investors in software development. Besides that, business process outsourcing (BPO) and financial services has also picked up in the city propelling a boom in the economy of Bangalore. And all these definitely have a major role to play in the transformation of the real estate configuration of the city.

Residential Rentals in Bangalore

As Bangalore becomes the hotspot for the corporates and MNCs, there is also a corresponding demand for commercial office spaces and also residential apartments and homes. This sudden demand for homes has led to a scramble for construction especially in the South, East and Central areas of Bangalore and so has correspondingly increased the capital and rental values of residential properties in Bangalore.

The new ventures and growing job opportunities in Bangalore has led to a large number of people coming in from different parts of the country and the globe. This has created a great demand for residential housing in Bangalore. Since the last quarter, rental and capital values in the suburbs have increased by 10-15 per cent due to high demand for residential space. However, yields on residential property remain between 4-6 per cent.

Commercial Rentals in Bangalore

With maximum number of investments in the Bangalore's corporate sector, the office market here has recorded the highest absorption levels in the country with over 6.3 million sq.ft of Grade A office space being transacted. And of this, over 76 per cent of the transaction volume was attributable to the IT/ITES sector.

The commercial market at prominent locations in the CBD and Secondary Business Districts seems to have stabilized after a prolonged decline and rental activity seems to be on the rise. The prime locations in Bangalore which are high in demand and are currently witnessing a rise in the rental values are

• Prime CBD Area - This includes M.G Road, Brigade Road, Cunningham Road, St. Marks Road, Residency Road, Museum Road, Lavelle Road, Vittal Mallya Road, Infantry Road, Richmond Road, Dickenson Road, Madras Road, Church Street and Brunton Road.
• Secondary Business District (SBD) - which includes Airport Road, Indira Nagar, CMH Road, Koramangala, Jayanagar, Racecourse Road, Sadashiv Nagar, Jaymahal
• Suburban locations - which include Whitefield, J.P. Nagar, Banerghatta Road, Electronic City, Hosur Road, Sarjapur Road, Outer Ring Road

Indicators On Rental Value

Retail Rentals in Bangalore

Also in the retail sector, Bangalore is far ahead when it comes to retail space and mall space rentals. With the steady addition of organized retail space in the market, new concepts like 'theme malls' dedicated to a particular customer segment are thronging the Bangalore commercial market.

Rental values in the prime high street locations of M.G. Road and Brigade Road witnessed a marginal strengthening due to the low availability of vacant space available in these areas and steady demand from retailers. Moreover, existing city malls have witnessed increased occupier demand over the last few months.

Future Outlook

The last few months have witnessed that the rates in certain locations like Whitefield, Sarjapur road, Outer Ring Road, Bannerghatta Road, Hosur Road have spiraled at an alarming rate. However, it is expected that large scale constructions of new commercial and residential projects around Bangalore should eventually even-out the demand and supply, and we could witness a stabilizing of rental rates across the city.