Over the past two decades, Bangalore has emerged as the nerve center of India’s information technology industry characterized by the presence of a large number of prominent IT/ITeS companies, Research and Development (R&D) centers, and prominent educational institutions. The city has not only outperformed its regional counterparts, Delhi and Mumbai, in terms of quantum of space transacted but also in terms of expansion of organized investment-grade office stock with Bangalore’s commercial office stock having grown from less than 20 million sq. ft. in early 2000s to 127 million in 2015.
Owing to growing demand and limited space in the core markets, factors such as flight to quality, rental arbitrage and availability of large scalability options have driven occupier interest from the central locations of the city to more cost effective commercial hubs in the suburban/peripheral areas of the city.
Presently occupiers remain focused on Whitefield and the ORR stretch between Marathalli and Sarjapur Road; going forward, an incremental shift towards newer locations such as North Bangalore is expected. Increasingly, occupier focus will also shift from pure consolidation to a mix of consolidation and expansion, and pure expansion initiatives—particularly from sectors such as technology, engineering and manufacturing, and banking/financial services.
Bangalore is likely to continue maintaining its dominance as a commercial hub in the years to come with factors such availability of larger floor plates, cost effective rentals and supportive government policies expected to contribute to a sustained rental appreciation in the short to medium term, resulting in Bangalore maintaining its position as a rental leader among office markets in India as well as the Asia Pacific region.