10 Emerging Affordable Property Destinations In Bangalore
Anuj Puri, Chairman & Country Head, JLL India:
Even as sales velocity for mid-income and luxury housing in Bangalore fluctuates with macro-economic variations, the city’s affordable housing segment has been witnessing steady demand on the outskirts. Availability of large land parcels at lower price points and the rapid expansion of the city in all directions have encouraged real estate developments even in the outlying areas. Infrastructure developments such as the planned Metro Rail and Peripheral Ring Road also play a part in making these affordable emerging areas attractive and viable.
During the first half of 2016, two significant market dynamics have been observed in Bangalore’s real estate market – an increase in new commercial launches, and a rise in the net absorption of commercial spaces. While the absorption levels are currently somewhat sluggish in the residential sector, commercial real estate is witnessing increased momentum with developers completing some of their office projects ahead of the original timelines.
The influx of more global corporate occupiers, infrastructure deployment in the peripheral areas, rapidly improving connectivity and unleashing of large land parcels by the Government for commercial and industrial growth have all colluded in the rapid emergence of newer nodes in the peripheral districts of Bangalore. Land in these areas comes at a lower cost; this has attracted developers of affordable housing projects, which are in demand from the workforce employed in the numerous automotive, engineering and other industries located on the outskirts of Bangalore.
- Locations beyond Electronics City such as Jigani, Attibele, Anekal and other localities towards the south of NICE Road are now gaining traction due to the relatively affordable property prices and a perennial demand rising from the Jigani Industrial belt and Bommasandra Industrial Area.
- Mysore Road in the south-west part of the city is a major manufacturing hub that provides significant impetus to demand for affordable projects in the nearby satellite town of Kengeri.
- Proximity to the Bengaluru-Chennai Industrial Corridor and interest from various Japanese multinationals has made Old Madras Road a preferred location for affordable property
Let us examine some of the other prominent areas that offer good options for affordable housing seekers and simultaneously offer good returns on investment over mid-to-long term.
1. Kanakapura Road
Located towards the South of Bengaluru, Kanakapura Road benefits from excellent connectivity with the key city centres. Various infrastructure and transport facilities make KanakapuraRoad a preferable suburb. The NICE Road (Bangalore-Mysore infrastructure corridor) connects Kanakapura to Bangalore, Mysore Road and Bannerghatta Road. The ongoing Peripheral Ring Road (PRR) that will connect all the major highways – Tumkur Road, Mysore Road, Old Madras Road and Hosur Road – is an added advantage for the region. Extension of the Metro line and widening of roads have also improved the real estate profile of this market, which is close to prominent educational institutions such as International Institute of Aerospace Engineering and Management (IIAEM), CREST (Centre for Research, Education, Sadhana and Training), hospitals, and leisure and entertainment hubs. Considering the development expected to happen here over the next few years, and the current property prices which are below Rs.4900/sq.ft., Kanakapura Road is certainly an area for both end users and investors to watch.
2. Sarjapur Road
The diverse range of property prices here has made Sarjapur an attractive micro-market for all classes of buyers. This area has witnessed stable demand from middle-class buyers looking for 1 and 2-BHK flats, as well as from high-end buyers focused on villas and row houses. Its proximity to the large IT/ITeS campuses of Outer Ring Road (ORR), Whitefield and Electronics City has strengthened investor sentiment in this location. With property prices catering to a vast cross-section of home-buyers and the presence of good social and general infrastructure, with numerous schools and healthcare facilities in the vicinity, make the Sarjapur Road an interesting investment proposition. The property prices at Sarjapur Road range between Rs.4700-4850/sq.ft., with a quarterly appreciation to the tune of 4.7%.
An upcoming location in Whitefield, Nallurhalli benefits from generous green cover as well as the presence of a lake. It is home to Sigma Tech Park, Forum Value Mall and ITPL and also enjoys good accessibility from Old Airport Road and Old Madras Road. This location is seeing a lot of villa and bungalow-type developments. With property prices saturating in Whitefield, Nallurhalli – which is situated close to major IT projects – offers relatively affordable residential property options for home buyers seeking to live close to Whitefield. Property prices here range between Rs. 4500-4700/sq.ft. with a quarterly appreciation to the tune of 2%.
Kengeri is an established satellite township where property demand is driven by the industrial developments along Mysore Road. This location also caters to the affordable housing requirements of the IT developments that located on Mysore Road. Kengeri benefits from excellent connectivity with Mysore Road, NICE Road and the Outer Ring Road, and the western extension of Namma Metro from the Mysore Road terminal to Kengeri. With excellent connectivity, adequate social infrastructure and the presence of commercial and retail spaces, this area is transforming into a vibrant residential destination. Kengeri is currently a mid-to-affordable residential market with property prices averaging at Rs. 3815/sqft and witnessing a quarterly appreciation to the tune of 3.7% on the back of planned Metro connectivity that will drive increased residential demand in the future.
Budigere on Old Madras Road is an emerging residential destination where IT/ITeS influence from the neighbouring areas and rapid infrastructure development have resulted in considerable growth in a short time. Budigere also receives strong demand for residential units from the manufacturing industries present in the region. With the prices saturating in already developed neighbouring areas such as Whitefield and Brookefield, Budigere receives significant spill-over demand due to its relatively affordable prices. It has good social and general infrastructure in place, and many reputed developers are active here with a wide range of housing projects. The property prices here range between Rs. 4500-4700/sqft. with the last quarter bringing a surge in property values by 2-3%, depending on the project and amenities offered.
6. Magadi Road
One of the main factors that work for Magadi Road in the western part of Bangalore is that it is easily accessible from the centre of the city. As most of the development in Bangalore is focused towards the east and south of the city, the western corridor is still relatively green and serene. Also, good connectivity through Nice Road, Outer Ring Road and the Purple Line of Namma Metro give Magadi Road easy accessibility to other parts of the city. This has led to many leading ddevelopers launching mid to high end segment apartment project alongMagadi Road. Currently, this micro-market has a mixed-bag of residential project offerings catering to a fairly wide spectrum of property buyers. As of now, these pprojects are priced in the range of Rs 8000-12000/sq. ft. for high-end units and Rs 3300-5000/sq. ft. for mid-end projects, so there is still good potential for homebuyers looking at relatively lower ticket sizes.
7. Hosur Road
Hosur Road in South Bangalore covers locations such as Begur, Kudlu Gate, Singasandra and Electronic City. Locations along Hosur Road close to Electronic City and Begur Road cater to affordable to mid segment housing, with prices which are currently less than Rs. 4500/sq.ft. Many reputed developers are already active in this sub-market – a fact which has worked well from an overall profiling perspective. Prices in both these locations have appreciated by about 5-10% in the last one year.
8. Yelahanka & Doddaballapur Road
Yelahanka was traditionally a suburban satellite town of Bangalore, where development was largely driven by the manufacturing sector until the Kempegowda International Airport became operational. The development of the airport opened the floodgates for office and mixed-use developments along Highway NH-7 connecting Yelahanka and the airport. The availability of generous large land parcels for large projects and good rail and road connectivity with the core city have also been driving investment sentiment at Yelahanka. Apartment projects are currently priced between Rs. 4000-5500/sq.ft. in this locality, which also has quite a few plotted developments as alternative options for buyers and investors. As this location is in its initial stages of development, it has witnessed marginal appreciation in property prices over last one year. However, as the SEZ and mixed use developments along the NH-7 start operations in next one year, this location is likely to see a lot more demand and development action – with consummate appreciation.
Horamavu in the north-east part of Bangalore is easily accessible from the airport through the Outer Ring Road. It is located close to key residential locations such as KR Puram andBanaswadi, and is developing into a fully-loaded residential destination. Real estate development in Whitefield and along the Outer Ring Road has boosted faster development in this location, which currently caters to the residential requirements of employees from the office projects in the northern part of Whitefield. Some of Bangalore’s leading local developers and a couple of national players are now active with projects in Horamavu. It is still primarily a mid-segment residential destination, with capital values ranging between Rs. 3000-4800/sq.ft. With the increasing focus of infrastructure development in the north of Bangalore, Horamavu will see a lot of fresh residential demand in the near future.
10. Mysore Road
The Mysore Road sub-market had a slow start in terms of real estate activity, as there were no strong economic drivers for the area. Also, a major portion of this sub-market is still dense with old developments built on small parcels of land. The development Global Tech Village an IT SEZ by Tanglin Developers along Mysore Road led to the launch of many residential apartments in this location, which is now seeing added traction on account of its proximity to various educational institutions and industrial developments, and good connectivity from ORR and NICE Road.
The residential sector on Mysore Road is mostly dominated by low and mid-end apartment projects, with the high-end residential market still at a very nascent stage. Mysore Road currently has around 5,500 units of marketable residential stock from different developments, and capital values range from Rs. 3,000–4,000/sq.ft. The typical buyers for homes in this area are employed in the government services, small-scale industries and to some extent in the IT/ITeS sector.
The above list is by no means exhaustive – as the city expands, more such affordable corridors will be developed. Though Bangalore is on all counts a prosperous city with a lot of demand for high-end housing, no property market in the country can hold its own solely on the back of HNI housing. Among many other things, Bangalore is a leading destination for back-office and other support areas of the IT/ITeS and other services sectors. Affordable housing will therefore remain the backbone that supports the real estate market of this thriving city.
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