As Bangalore steadily moves up the economic graph, with investments unparallel in the IT, ITES and BPO sector; the demand for commercial spaces like office complexes is at an all time high. This has created a throbbing demand for office rentals, which includes commercial premises with state of the art facilities.

As Bangalore continues to attract the corporate sector, MNC's are witnessed in the process of identifying and negotiating office spaces which meet international standards. This has also opened up the competitions among developers, who are geared up to meet the demands of their clients.

Office Space rentals in Bangalore

Office space rental is one of the prominent features of Bangalore real estate. A number of state-of-the-art Grade A office buildings backed by reputable developers are slated to come on stream in the CBD in 2006. A majority of this supply would be located in the secondary and peripheral business districts including Whitefield, Outer Ring Road (ORR) and Inner Ring Road.

Earlier, due to the shortage of new supply of Grade A office space in Bangalore, vacancy was registered at a compressed 6.1% in the period under review, down 0.3 percentage points as compared to the previous quarter. This had subsequently raised the rental values of the commercial office spaces, which however, shows signs of stabilizing with the growth of new constructions.

• Rentals for Grade A office space in the CBD which witnessed a marginal increase is expected to remain generally stable in the near to medium future. With new supply to follow, which is of approximately 1.08 million sq.ft is expected to meet some of the demand.
• Strong pre-leasing activity has also been observed in Bangalore on the back of upbeat levels of demand for office space in the market.
• Commercial rental rates are expected to be stable as a good amount of supply( UB City, Nitesh Times Square and Salarpuria Windsor, etc) is expected to be coming on stream in the market in the near future.

Retail Rentals in Bangalore

Besides office space rentals, retail and mall space rentals in Bangalore are also in great demand. Rents in prime high-street locations could continue to appreciate despite the steady addition of mall space due to low vacancy levels. The last few years with growth in retail business, mainly with the relaxation of FDI in retail, Bangalore, like most of the other cities in India has been decked by sprawling malls and swanky showrooms.   

The commercial real estate market in Bangalore appears to have stabilized after a prolonged decline and rental activity seems to be on the rise. The infrastructure of Bangalore which was considered to be a hindrance for inviting better investment opportunities, have shown much progress after the Government's initiative to provide better infrastructural facilities. This would definitely support the commercial real estate market of Bangalore.