Bangalore: Girish Karnad Reflects

Few decades ago, people came to Bangalore essentially for the horse races. Once the racing season was over, the city emptied out. Bangalore had little else to offer.

Today the racecourse has been moved out of the city—a former chief minister’s dream of erecting a 100-story commercial tower à la Singapore in the course’s place was foiled by public outcry—and Bangalore throbs through the year with no concern for the seasons. Its roads are chock block with traffic, and its hotels crammed.

Bangalore started its life as a cantonment built by the British to keep a watchful eye on the nearby princely city of Mysore. It was European in its orientation, with wide roads, bungalows with pillared porticoes, and spired churches where everyone spoke English. And nearby was its “native twin,” Bengaluru, congested and cowed, where the lingua franca was the South Indian language of Kannada.

In 1956 the administrative map of India was redrawn on a linguistic basis with each of its nearly 20 languages defining a separate state. And Bangalore found itself the capital of a new Kannada state, at the mercy of political and economic forces it was unprepared for. The first to pour in were bureaucrats who needed offices, houses, and roads to run the new state, their numbers swelled by the philosophy of a socialist economy that led to the setting-up of government-sponsored enterprises, like the telephone and the aeronautical industries. Ancillary enterprises followed, leading to an influx of migrant workers.

South Indian Real Estate Sector footprint

What a South Mumbai is to Mumbai or a South Delhi is to Delhi could well be South Indian cities to India! The question is – will the southern region become the downtown of India?

Southern India has for long been the silent crusader, building and strengthening its real estate development as one of the most sought after destinations in the country. With improving transparency and visibility of the real estate markets in the South zone, cities such as Bangalore, Chennai and Hyderabad have attained a place on the global real estate map, a status that was limited just to Mumbai and Delhi in the past.

While South Indian cities constitute nearly 45% of the country’s office space, the stock of 140 million sq ft in these cities is projected to grow at a CAGR of 8% for the period 2012 – 2016, lower than the projected national growth of 11%. This implies that the southern cities, particularly Bangalore and Hyderabad, are relatively rationalised in terms of medium term supply of office space, and the cities have chosen a strategy of pursuing selective quality developments over rapid expansion. While this would keep their share in India’s office stock range bound at 37%-40%, the South Zone’s vacancy rate by end-2012 is expected to be 16%, considerably lower than the pan-India vacancy rate of over 20%.

While demand remains healthy for organised retail spaces, it is polarised towards either successful malls or high streets, which have better footfalls and conversion ratio. As the mall stock in the southern cities sum up to breach the 40 million sq ft mark by end-2016, the vacancy by then is expected to witness a notable decline from the peak levels of 2014 to drop below the national average of 20.5%.

South India’s residential market has been an ardent follower of the ‘affordability’ mantra, with more than 80% of the new launches in the past two years being priced under INR 4,000 per sq ft (USD1 812 per sqm). As a result, the residential markets of South Indian cities have remained resilient in the past few quarters, relative to the significant decline recorded in the sales volume of Mumbai and NCR-Delhi.

The focus of Indian real estate is shifting from Tier I to Tier II cities, and the southern region is also embracing the same, with secondary hubs developing in Kochi, Coimbatore, Vishakhapatnam and Mysore, that are persistently striving for higher milestones.

 

Singapore Based Company to Invest in India

The CEO and country head of CapitaMalls Asia, Singapore-based develops, owns and manages malls across Asia, will invest INR 1,800 cr in India. He also said, “apart from funding the two malls that are operational now, this money would be also used to develop 07 another  malls in India.” The company has put-on 02 joint ventures in India, with Bangalore-based Prestige Estate Projects Ltd for projects in the South and with Advanced India Projects Ltd  for projects in the North.

The ventures now own the Forum Value Mall in Bangalore which was opened in 2009 and The Celebration Mall in Udaipur, early this year. The other committed projects in India are under different stages of development in Bangalore, Mangalore, Hyderabad, Mysore, Kochi, Jalandhar and Nagpur. These malls are scheduled to be operational between end-2012 and mid-2013.

JLLM and WIPRO Come Together.

Real estate consulting company Jones Lang LaSalle Meghraj (JLLM) has signed a big contract with a country’s major information technology company Wipro for managing its 2.3 million square feet of office space in Bangaluru, Mumbai and Mysore.

Auto Rickshaws, Bangalore India
Wipro is the third largest exporter of the country of information and technology whereas with global revenue of $2.5 billion in the last year, Jones Lang LaSalle serves clients in over 60 countries from750 locations across the world, including 180 corporate offices. The firm is a forerunner in property and corporate facility management services, with a portfolio of approximately 1.4 billion sq ft worldwide.

The statement issued by JLLM contained “Riding high on its recent successes with Indian corporates such as Max India Group and Lavasa (of HCC group), Jones Lang LaSalle’s Integrated Facilities Management India team has won a facilities management contract with another Indian corporate giant – Wipro Technologies”.

“There is a vastly increasing demand for professional integrated facilities management services in India,” said Yash Kapila JLLM’s Integrated Facilities Management MD.

The coming together of two big corporations is a good sign for the industry.

Puravankara buys sixty-two acres in Bangalore

Provident Housing is a fully-owned subsidiary of the Bangalore-based Puravankara Group. Provident housing is learnt to have bought a 62-acre land parcel in the outskirts of Bangalore. The deal is believed to have been struck for a value of 150 crore rupees. The deal between Provident Housing and the seller, who is an individual, was signed earlier this month.

The land parcel is located on the Mysore road around half-an-hour away from the heart of Bangalore. This is said to be an outright purchase with Provident Housing, scheduled to make the payment in two tranches. In the first stage, the buyer has paid a nominal token amount at the time of signing the agreement and the balance would be paid when the project is completed.

Recently, many real estate developers have been exploring opportunities in the affordable housing sector. The Puravankara Group will have these projects in Chennai and Bangalore and is negotiating deals in Hyderabad and Coimbatore. It is learnt that deals in Hyderabad and Coimbatore will be finalized in a month.