New infrastructure projects to improve connectivity,residential catchment areas in the vicinity,and the governments initiatives are leading to demand for office space from the IT sector,says Sai Prasanna
The IT industry,employing around two million professionals across India,has witnessed the fastest growth at 22.7 percent,according to a NASSCOM report.An additional 1.6 to 1.8 lakh employees are expected to be inducted just by the top five IT companies during the course of this year.
Also,with the STPI scheme being systematically phased out,the IT sector will be looking at SEZs and IT Parks,increasing the demand for them.Karun Varma,Managing Director - Bangalore and Kochi,Jones Lang LaSalle (India),explains,"As of now,the demand for SEZs continues since they offer indirect tax benefits and MAT not being viewed as a major deterrent by certain clients."
Demand for office space
Office space absorption for Bangalore has been strong for the quarter with nearly two million sqft of space leased.The IT/ITeS sector has been the major market driver for office space in this quarter.According to a report by Jones Lang LaSalle,India,the IT/ITES and the financial services sector would continue to account for 60-70 percent of office space demand.
Shrinivas Rao,CEO,Asia Pacific,Vestian Global Workplace Services,says,"Demand for SEZ space continues to remain strong with preferred destinations being Outer Ring Road (ORR),Whitefield,and Mysore Road.In the first quarter of this year,ORR witnessed absorption of nearly 0.6 million sqft with high pre-commitments in projects which are under construction."
Demand for SEZs and IT parks
The Global Investors' Meet held last year saw investments pouring into the Bangalore north region."The Devanahalli Business Park (approximately 300 acres) and IT Investment Region (ITIR) which is nearly 10,000 acres have attracted IT majors who have signed MOUs with the government to set up their development centres.Further to this,private developers have land parcels in this micro-location for IT space development",Shrinivas explains.
Many corporate have started considering the north-west quadrant as a possible destination."A key driver of this demand is the availability of residential developments to create employee catchments.However,to increase the supply of IT Parks and SEZs in this quadrant,there needs to be a significant increase in demand,"says Karun.
According to Shrinivas,in the short to medium terms,the ORR stretch (Hebbal to Sarjapur Road Junction) and Whitefield would continue to witness demand primarily due to availability of operational SEZ space.In the long term,demand for office space is expected to increase along north Bangalore and ORR.
Connectivity and benefit for localities
Two important projects are all set to enhance connectivity in the northern quadrant - the improvement of a 22-km stretch of the NH-7 from Hebbal flyover to the international airport,and the High Speed Rail Link project (HSRL) from the Central Business District to the airport.Improvements include widening the 6-lane road to a 10-lane highway along with flyovers and underpasses,by the National Highways Authority of India (NHAI).Both the projects are expected to be completed in a timeframe of two to three years.According to Karun,"the locations likely to benefit are Bangalore west,south-west,northwest,and north-east quadrants,since they are well connected to the airport and the travel time to the city centre is less when compared to other IT corridors of Bangalore.Moreover,after the infrastructure improvements in this quadrant,capital values have started rising."
Shrinivas points out that apart from infrastructure,connectivity to the city centre,proximity to the airport,supporting residential catchments,availability of large land parcels,zoning regulations (mutation corridor - NH7),and government initiatives are the key factors which have worked in favour of north Bangalore.
Demand for residential spaces
According to Karun,due to the anticipated development in north Bangalore and the ample availability of land parcels,many apartment and villa projects were launched,especially on Yelahanka-Doddaballapur Road,IVC Road,Nandi Hills Road and Devanahalli Road."Until now,developers were targeting mid-segment clients,but of late,based on the increased demand,many high-end apartment and villa projects have also been launched,"he adds.
Demand for residential space in this corridor is mainly from IT/ITeS sector driven by employees working in IT Parks operating along the ORR.North Bangalore has witnessed high residential activity over the last one year mainly in the high-rise apartment and villa developments category.Shrinivas explains,"Infrastructure projects in the north have propelled residential activity in localities such as Hennur Main Road,Yelahanka New Town,Sahakaranagar,Doddaballapur Road,Nandi Hills Road,Bagalur Main Road,and along Bellary Road (NH-7 )."
The IT industry,employing around two million professionals across India,has witnessed the fastest growth at 22.7 percent,according to a NASSCOM report.An additional 1.6 to 1.8 lakh employees are expected to be inducted just by the top five IT companies during the course of this year.
Also,with the STPI scheme being systematically phased out,the IT sector will be looking at SEZs and IT Parks,increasing the demand for them.Karun Varma,Managing Director - Bangalore and Kochi,Jones Lang LaSalle (India),explains,"As of now,the demand for SEZs continues since they offer indirect tax benefits and MAT not being viewed as a major deterrent by certain clients."
Demand for office space
Office space absorption for Bangalore has been strong for the quarter with nearly two million sqft of space leased.The IT/ITeS sector has been the major market driver for office space in this quarter.According to a report by Jones Lang LaSalle,India,the IT/ITES and the financial services sector would continue to account for 60-70 percent of office space demand.
Shrinivas Rao,CEO,Asia Pacific,Vestian Global Workplace Services,says,"Demand for SEZ space continues to remain strong with preferred destinations being Outer Ring Road (ORR),Whitefield,and Mysore Road.In the first quarter of this year,ORR witnessed absorption of nearly 0.6 million sqft with high pre-commitments in projects which are under construction."
Demand for SEZs and IT parks
The Global Investors' Meet held last year saw investments pouring into the Bangalore north region."The Devanahalli Business Park (approximately 300 acres) and IT Investment Region (ITIR) which is nearly 10,000 acres have attracted IT majors who have signed MOUs with the government to set up their development centres.Further to this,private developers have land parcels in this micro-location for IT space development",Shrinivas explains.
Many corporate have started considering the north-west quadrant as a possible destination."A key driver of this demand is the availability of residential developments to create employee catchments.However,to increase the supply of IT Parks and SEZs in this quadrant,there needs to be a significant increase in demand,"says Karun.
According to Shrinivas,in the short to medium terms,the ORR stretch (Hebbal to Sarjapur Road Junction) and Whitefield would continue to witness demand primarily due to availability of operational SEZ space.In the long term,demand for office space is expected to increase along north Bangalore and ORR.
Connectivity and benefit for localities
Two important projects are all set to enhance connectivity in the northern quadrant - the improvement of a 22-km stretch of the NH-7 from Hebbal flyover to the international airport,and the High Speed Rail Link project (HSRL) from the Central Business District to the airport.Improvements include widening the 6-lane road to a 10-lane highway along with flyovers and underpasses,by the National Highways Authority of India (NHAI).Both the projects are expected to be completed in a timeframe of two to three years.According to Karun,"the locations likely to benefit are Bangalore west,south-west,northwest,and north-east quadrants,since they are well connected to the airport and the travel time to the city centre is less when compared to other IT corridors of Bangalore.Moreover,after the infrastructure improvements in this quadrant,capital values have started rising."
Shrinivas points out that apart from infrastructure,connectivity to the city centre,proximity to the airport,supporting residential catchments,availability of large land parcels,zoning regulations (mutation corridor - NH7),and government initiatives are the key factors which have worked in favour of north Bangalore.
Demand for residential spaces
According to Karun,due to the anticipated development in north Bangalore and the ample availability of land parcels,many apartment and villa projects were launched,especially on Yelahanka-Doddaballapur Road,IVC Road,Nandi Hills Road and Devanahalli Road."Until now,developers were targeting mid-segment clients,but of late,based on the increased demand,many high-end apartment and villa projects have also been launched,"he adds.
Demand for residential space in this corridor is mainly from IT/ITeS sector driven by employees working in IT Parks operating along the ORR.North Bangalore has witnessed high residential activity over the last one year mainly in the high-rise apartment and villa developments category.Shrinivas explains,"Infrastructure projects in the north have propelled residential activity in localities such as Hennur Main Road,Yelahanka New Town,Sahakaranagar,Doddaballapur Road,Nandi Hills Road,Bagalur Main Road,and along Bellary Road (NH-7 )."
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