Bangalore: It’s raining new launches in Bangalore’s real estate market after a 3-year hiatus. The economic downturn in 2008 saw developers put the brakes on project launches, focusing on completing projects launched in 2006-2007 — which realty analysts regard the peak year in Bangalore. From 2008 to mid-2010, barely a handful of projects were launched, with many top guns not having a single launch.
For many developers, the financial year 2011-12 may well go down as the year
that saw the maximum project launches.
By the end of this financial year, Mantri Developers would have launched 20 million sqft of residential space in Bangalore comprising 12 projects. In 2006, the company had launched close to 4 million sqft of residential space.
Sobha Developers is launching close to 7 million sqft of residential space, their best ever since the company entered the business in 1995.
Besides, the residential market saw new entrants like RMZ, which has so far been in the commercial and retail space. Embassy Group, also engaged in development of commercial space, retail, and business parks, is making a comeback to residential space with the launch of two premium projects.
“Bangalore’s residential property market has exhibited a remarkable recovery from the downturn compared to other cities. This can be attributed to fast-tracking of various infrastructure projects, a vastly improved job market and a decisive return of positive investor sentiment. As a result, developers have also put project launches on the fast track,” says Karun Varma, managing director, Bangalore and Kochi, Jones Lang LaSalle India.
Says Venkat K Narayana, CFO of the Prestige Group: “So far this fiscal, the Bangalore market has done very well, much better than the past three or four years. At Prestige, in the first half of this financial, we reported Rs 1,000 crore in new sales, and will definitely meet our guidance of Rs 1,500 crore in new sales by the end of this fiscal.”
Interestingly, the downturn seems to have had a positive impact on buyers in respect to affordability and range of products. In 2007, most developers concentrated on the Rs 40 lakh and upwards price bracket, “but now, projects are being launched starting from Rs 25 lakh to upwards of Rs 2 crore,” says M Murali, managing director of Shriram Properties.
By the end of the next quarter, Shriram would have launched 3.4 million sqft of residential space, an 88% increase from its previous best of 1.8 million sqft in 2006-07, offering a price range of Rs 20 lakh to Rs 1.5 crore.
Bangalore is one of India’s largest markets for organized residential activity in the form of organized Grade A apartments/ villas.
Overall size of market is over 175,000 apartment dwelling units and over 17,500 villas, higher than the organized Grade A stock in Hyderabad and Chennai
With good infrastructure and office space, locations such as Sarjapur Outer Ring Road and Whitefield are witnessing large-scale apartment activity. North Bangalore has emerged as the new growth vector and there’s been more apartment activity in the region.
Ram Chandnani | DEPUTY MD, SOUTH INDIA, CBRE (GLOBAL REALTY CONSULTANCY FIRM) IN REALTYMore launches, higher absorption
Bangalore: The Silicon Plateau is witnessing a plethora of realty project launches.
DLF on October 8 launched its first value homes project in the country, Maiden Heights, at Rajapura, with each unit priced between Rs 25 lakh and Rs 35 lakh. At the other end of the price spectrum, DLF is launching a villa project in the last quarter of this financial, priced at upwards of Rs 2.5 crore, which would be part of Phase 2A of its premium project Westend Heights, in New Town, Bangalore.
Sobha’s eight project launches this financial year would see units priced between Rs 2,750 per sqft and Rs 8,000 per sqft.
“We are witnessing a monthly absorption rate of 1 million sqft of which 65% comes from the Bangalore market. That represents a 30% growth compared to the same period last year. The growth is on two accounts — more project launches and higher absorption rates,” says J C Sharma, MD, Sobha Developers.
The other trend that the downturn has presented to buyers is that “In order to make apartments more affordable, developers have gone in for different unit sizes. Earlier, 3-bedroom units would range between 1,700 sqft to 1,800 sqft, which now range between 1,450 sqft to 1,500 sqft. Two-bedroom units, which used to be 1,300 sqft to 1,400 sqft in size, have been resized to approximately 1,100 sqft,” says Sushil Mantri, CMD, Mantri Developers, and president, CREDAI, Karnataka.