The real estate sector in Bangalore has experienced significant growth over the past year. In the upcoming year, the city’s realty market is expected to expand by approximately 25 percent, as estimated by the Karnataka Chapter of the Consortium of Real Estate Developers’ Associations of India (CREDAI).
“We are expecting the realty market to grow by 25 percent in the coming year. Last year, we witnessed a similar growth,” said Sushil Mantri, President of CREDAI Karnataka.
According to studies conducted last year, the city is likely to absorb around 7.1 million square feet of office space against a supply of 7 million square feet. While the demand for office and commercial sales in the city saw an increase, residential sales remained slow.
Experts noted that the city witnessed a significant boost in high street leasing and rental rates. Capital values have increased nominally in a few sub-markets. Additionally, there was a rise in rental value as the demand from retailers remained strong.
With commercial office space developers offering favorable options, predictions for 2012 suggest that several IT companies in the city will consider pre-leasing office space.
However, analysts believe that office space supply will outweigh demand.
“FDI in multibrand real estate is expected to catalyze a lot of demand from international retailers. International luxury brands will restrict their growth plans to Mumbai, Delhi, and Bangalore,” states a projected report by Jones Lang LaSalle India, a real estate intelligence firm.
The report also indicates that the mid-end and affordable housing segments will record healthy appreciation in capital value in the short term from a low base.