North West Bengaluru, which includes areas such as Peenya, Rajajinagar, Yeshwanthpur and Malleshwaram, is poised to witness a faster rate of growth in residential sales and prices over the next five years, compared to its counterparts in the IT capital, according to a report released by data analytics platform CRE Matrix on August 14.
On an average, 2,500 residential units are sold in North West Bengaluru every year, representing about 6% of the overall sales in the city. Meanwhile the average demand-to-supply ratio in the region stands at 1.7x, highest amongst all micro markets in the city, per the report.
Offers a solution to Bengaluru’s massive congestion problem
Real estate majors such as Godrej Properties, Mantri and Birla Estate are actively planning projects in the area, the report said. Moreover, under-construction and upcoming Infrastructure projects to the tune of ₹16,000 crore are expected to improve North West Bengaluru’s connectivity with the rest of the city, the report added.
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“…for me, North West is the immediate solution to Bengaluru’s massive congestion problem – it has everything – the Greenery, better AQI, best of the residential developer brands, marquee commercial assets already present and some trophy assets coming up shortly, the best of malls – and it is equidistant to the airport as well as CBD Bengaluru,” opined Abhishek Kiran Gupta, CEO and co-founder, CRE Matrix and Indextap.com.
Home to 27% of Bengaluru’s population (3.9 million), but accounting for merely 6% of the annual residential sales in the city, the region presents a wide room for growth, and improvement in Bengaluru’s infamous traffic woes.
According to the latest traffic index study by Dutch multinational TomTom, Bengaluru has the highest congestion level amid Indian mega-cities with a population of over 8 million. The average speed for Bengaluru during rush hour is 18 km/hour and the time lost each year during peak traffic time is about 132 hours.
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“By 2028, most of the under-construction phases of the metro shall get commissioned along with the recently announced Phase 3. We believe this will make the North-West region completely connected with all parts of the city within a travel time of 30 minutes,” the report noted.
Office market performance
Alongside an existing office stock of 2.1 million square feet, North West Bengaluru has 7 Grade A assets under-construction currently, the report highlighted. With a rental delta of 38%, this region is seen as a tenant’s market.
“With infrastructure and relative price arbitrage, we believe the next five years will see North-West rentals also increasing by 6-8% annually,” the report noted.
The report also highlighted that strata sales of office units picked up pace in 2021, showing the region having an appetite of at least 1.5 lakh sq ft of absorption every year. Capital values also witnessed robust growth with a 5-year compound annual growth rate of 5%.
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“We estimate, for CY 2024, demand will break through the 2 lakh sq ft mark, considering the addition of new supply, temporary rental arbitrage, and an increasing focus on connectivity of the region,” the report said.
About leasing by global capability centres, the report cited that North Bengaluru has become an integral part of the GCC portfolio with 45% of office space being occupied by this segment.
