The Hindu : Karnataka News : Commercial property scene looking up

Online edition of India's National Newspaper
Saturday, Jun 04, 2005

Karnataka

Karnataka

Commercial property scene looking up

Special Correspondent

Short-supply situation in market will ease by last quarter of the year: survey

BANGALORE: In spite of continued interest in Chennai and Hyderabad from the Information technology and IT-enabled services sectors, the demand for office space in Bangalore continues to be steady. In the past few weeks alone, 220,000 sq ft of space was leased by IT majors such as SAP Technologies.

Pressure on suburbs

The commercial property market here is currently in a temporary short-supply situation, which is likely to ease only towards the last quarter of the year, according to a survey by international property management consultants, Cushman and Wakefield.

This short supply has exerted upward pressure in values, especially in suburban locations.

Property values have started showing an upward trend only in the peripheral areas around ITPL with the going rate at Rs. 4,200 a sq feet. To lease a property in the same areas, a company has to pay around Rs. 45 per sq ft, per month.

Which is also the rental rate in the M.G. Road-Central Business District (CBD).

Rental values off the CBD remain around Rs. 38 a sq ft and in the suburbs such as Koramangala, it is Rs. 32. In other peripheral areas such as Bannerghatta Road, the rate could be Rs 26.

Reactions

The property market has reacted to the U.N.-based Natural Search Solutions announcing plans to set up a facility in Bangalore for research and product development. Infosys Technologies is planning a new city campus and has approached the State Government to procure 350 acres in the northern part of the city.

The banking solutions provider iFlex Solutions plans to double its office space here and in other centres, spending around $ 30 million. Sonim Tech, a U.S. based tech firm, has announced plans to set up a development centre here to deliver IP-based products and services.

Expansion

Another firm, Symbol Technologies has opened a software development centre in Bangalore, as part of its expansion plans.

This centre will focus on developing the company's wireless and mobility systems management products.

The key leasing transactions of recent weeks included Hughes Software taking up 100,000 sq ft space at Sigma Elegance in Whitefield and SAP Technolosgies leasing 100,000 sq ft in the same area.

Within the city itself, First Consulting Group leased 20,000 sq ft in HM Elegance on Museum Road.

The real estate trade finds the going still smooth in regard to commercial property, primarily because many MNCs are still coming here and other already here, planning to expand their facilities.

With space at a premium within the city and even the suburbs, trade circles expect more activity in and around areas like Whitefield, within each reach of the Outer Ring Road.

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