What Makes Bangalore Tick

What Makes Bangalore Tick

The city has been notching up robust absorption levels in commercial property consecutively for years together

India's Silicon Valley continues to retain the top slot in terms of largest volume of commercial space absorption year after year in the country.Whether it is setting up of a new unit or expansion of existing operations of IT/ITES companies,the overriding priority is for the garden city.Though belated,infrastructure development has been sending green signals to companies though it continues to remain a key challenge for the state government.

According to industry sources,the city has absorbed over 5 million sqft of commercial space for the first half of this year.This is the largest volume of absorption reported by any city in the country so far.

What makes Bangalore tick The city is home to over 2000 STPI registered companies and employs over 0.5 million people which is 1/3 of the total IT professionals in the country.A pro-active state government is focused towards promotion of IT/ITES and first to formulate the millennium BPO policy and IT policy.The government has also taken up the task of promoting IT as one of the five top priorities by constituting a national task force on IT and software development.The pensioner's paradise has attracted 4 Fortune-500 companies and 11 companies with a turnover of over US$1billion in just one year.In fact Bangalore is the only city in the world where 2.5 lakh HR professionals are working.Even Silicon Valley could not match this meritorious record. 

In a survey conducted during the property shows across US,Bangalore has notched up the top slot in terms of demand for investment in real estate by returning NRIs.This is one reason why there has been a consistent demand for office space across micro markets in the city year after year.

Commercial property absorption levels have gradually picked up now across all micro markets in the city.In fact there are no ready to occupy spaces available in some of the key micro markets like Sarjapur outer ring road.This has necessitated corporates to look at Whitefield where supply exceeds demand.In the extended business districted (EBD),pre-commitments are common even before the existing clients vacated the premises

Incidentally the demand has picked up not only for SEZ premises but for non-SEZ premises as well.This has convinced developers to launch new projects due to surge in demand for office space and for BTS units.

With the shrinking supply level on outer ring road and CBD areas,the only alternative for occupiers is to look at electronic city and Whitefield,according to realtors.This is because of the current vacancy levels at 4 million sqft in Whitefield and 1 million sqft in electronic city."While rental levels have increased marginally by 10 per cent in CBD and outer ring road areas,they are relatively stable in electronic city and Whitefield",said Neeraj Shetty,director,City Info Property Services Pvt Ltd.

Among the larger occupiers who have committed space,specific mention must be made about companies like Cisco,Accenture,IBM,Cognizant Technology,J P Morgan,Bosch,Wells Fargo,Volvo,Mercedes-Benz,Ernst & Young,PricewaterhouseCoopers India,KPMG,Airbus and Oracle.This is apart from Indian companies like TCS,Huawei Technologies and Schneider Electric.

With the continued expansion of existing operations due to the overall economic growth,property consultants feel that the city will see improved intake of office space in the next two quarters this year.
At the same time industry sources feel that if the government is keen to retain the city's numero uno position in driving the IT/ITES companies to its fold,it is essential that efforts should be made on war footing to improve the infrastructure development in the city.It is expected that things will improve once the under pass and flyover will get ready along the ring road for smooth flow of traffic.