BANGALORE 3Q 2011 OFFICE REPORT

ECONOMY

The Indian economy grew at 7.7% during the second quarter of the year, the lowest in the last six quarters. High inflation and steady increase in interest rates hampered  the growth in the domestic market. Although the manufacturing sector grew 7.2% over the year in the second quarter, higher than the previous quarter’s growth rate, the construction sector saw a meager 1.2% yearly increase in the second quarter as compared to the last quarter’s growth of 8.2% due to slower construction activity and an increase in interest rates.

OVERVIEW

Bangalore office market continued with its buoyant trend recording demand at approximately 3.34 million square feet (sf) during the third quarter of 2011. The supply added was considerably healthier at approximately 1.4 million sf as opposed to the relatively conservative infusion during the previous two quarters. Supply witnessed relatively quick take-up with approximately 76% being already leased.Outer Ring Road micro market that has been observant to a dearth of supply,recorded a major infusion in the SEZ space comprising almost 53.6% of the new supply. The overall SEZ vacancy in the city as a result rose marginally to 3.9%; though the new supply was mostly leased, registering only 17% vacancy by the end of the quarter. Outer Ring Road micro market closely followed by Whitefield accounted for the highest share in the absorptions. Even in the backdrop of high absorption levels, the vacancy across the Grade A buildings registered a marginal decline to 12.3%. This was primarily due to increased take-up in second generation supply coupled with good absorption levels in Grade B space. Quite a few corporates were observed to sub-lease their spaces; and approximately 122,000 sf of absorption was in the sublease space. Rentals however, reached a plateau in most micro markets to capitalize on the enquirers as the new leases transacted during the quarter were mostly at competitive prices that were negotiated over quite a period of time.

OUTLOOK

The city will witness cautious delivery of projects for the remaining of 2011.Developers are likely to initiate delivery of projects that have garnered committed interest from corporates for take-up on space being delivered or have been substantially pre-committed. Demand, on the other hand, too is likely to be subdued

in view of the increased global uncertainties observed during the previous quarter pressurizing the corporates to weigh their expansion plans. However, demand for spaces in the range of 7,000 sf to10,000 sf will continue to prevail. As a result, the vacancy levels are expected to come down marginally or remain stable in the forthcoming quarter. Though the market is witnessed to scarcity of options and lesser space availabilities, rentals will remain stable on account of the considerably high price-points commanded and the eagerness of developers to close deals arising from enquiries.

Large land buys in Whitefield,Hebbal

Hebbal in north Bangalore and Whitefield in the east of the city are once again seeing a flurry of land transactions,thanks to attractive prices in peripheral areas and rising demand in certain segments of the property market.

Earlier this month,Three major transactions in Whitefield,including a 27-acre purchase by Shriram Properties for Rs 146 crore,a 5-acre purchase by Indiareit Domestic Fund for Rs 40 crore,and an 18-acre purchase by Total Environment Building Systems for Rs 150 crore.

IT has now been learnt that several more such transactions have happened in the past few months,mostly on the eastern periphery of Whitefield .Bangalore based RMZ Corp has bought 28 acres on Sai Baba Ashram road for Rs 133.38 crore,which translates to Rs 4.76 crore an acre.The rate indicates a near doubling of capital values,to Rs 1,100 per sft,on this stretch (which is a little away from the heart of Whitefield) in the last three years.

Raj Menda,MD of the company,declined to comment on the valuation,but said that they are coming up with villas priced at Rs 2.5 crore a unit and measuring Rs 3,200 sft each.Whitefield has some inventory left on the apartment side.But there are hardly any supply of villas in the sub-Rs 3 crore range, he said.

Salarpuria Sattva is buying 110 acres in Gunjur village in Whitefield for Rs 275 crore or Rs 2.5 crore an acre,say sources tracking the deal.Bijay Agarwal,CMD of Salarpuria Sattva Group,declined to comment on the valuation,but said he was planning an integrated township on the land parcel.Many developers are looking at Gunjur about 8 km from ITPB in Whitefield -- as land rates are around Rs 600-750 per sft.

Significant commercial leasing activity in Whitefield is creating residential demand.Almost 0.46 million sft of office space was absorbed in Whitefield in the July-September quarter,says a report by real estate consultancy CB Richard Ellis.This is said to be a 20% increase over the same period last year.

Whitefield is seen as a cost-effective market for office space compared to Outer Ring Road (ORR).Grade A office space rentals are at Rs 26-30 per sft compared to Rs 35-45 along ORR.With many IT companies expanding in the area,residential development will be catalysed, said Ram Chandnani,deputy MD-South India of CB Richard Ellis.

Farook Mahmood,CMD of property brokerage firm Silverline Realty,feels that Whitefield was under-priced as an asset class due to lack of quality infrastructure.Things have improved today and it will soon catch up with ORR, he said.

The Bangalore north market is also warming up.Surendra Hiranandani-promoted House of Hiranandani is close to buying 10 acres in Tata Nagar,about 2 kms from the Hebbal flyover for Rs 160 crore,according to sources privy to the development.Neha Hirandnani,director in the company,said,We are working on many transactions and I dont want to comment on it. 

The Hiranandani deal would value land in Hebbal at Rs 16 crore an acre or Rs 3,700 per sft.Analysts say that land values in Hebbal have increased by 15% over the last two years primarily because of the nearby Manyata Tech Park and the proximity to the airport.

MORE LAND DEALS 

Flurry of land transactions in peripheral areas due to attractive prices and rising demand in certain segments of the market RMZ Corp has bought 28 acres on Sai Baba Ashram road for Rs 133.38 crore Salarpuria Sattva is buying 110 acres in Gunjur village in Whitefield for Rs 275 crore Significant commercial leasing activity in Whitefield is creating residential demand House of Hiranandani is close to buying 10 acres in Tata Nagar for Rs 160 crore

HDFC fund to invest $90 mn in Embassy Knowledge Park

HDFC India Real Estate Fund International Llc, the overseas real estate-focused private equity (PE) fund of Housing Development Finance Corp. Ltd (HDFC), is investing $90 million (around Rs.440 crore) in an information technology (IT) park coming up in Bangalore.

The $800 million fund will pick up a stake of about 40% in the 200-acre project being planned near the Bangalore airport, said two people familiar with the development.

Embassy Property Developments Ltd, a city-based builder, will develop the project. 

“It is a long-drawn, nine-year project, which will primarily have IT along with some residential space, and will throw up nearly 25 million sq. ft of development,” said one of the two people cited above. “The plan is to get many large IT companies to set up offices here and repeat what was successfully done at Manyata Tech Park, for example.” Embassy Property didn’t respond to an email query sent on Thursday.

The company had filed last year for a Rs.2,400 crore initial public offering, but has not gone to the market yet. Real estate analysts blamed this on market volatility, which has forced other property firms as well to hold back listing plans.

PE funds and developers have in the past year focused more on residential projects than office or retail spaces because of a lower risk quotient. But HDFC’s investments in non-residential projects have been rewarding. Its PE funds exited their investments in two earlier Embassy projects with substantial returns.

“The fund had invested Rs.209 crore in Manyata Tech Park and exited with Rs.544 crore. In the Embassy Golf Links project, it had acquired two buildings for Rs.53 crore and exited with Rs.201 crore,” said the second person mentioned earlier.

“Though there are challenges involved in non-residential projects like finding the right location, partner and product to begin with, large investments in this space also offer great opportunities with potential of good returns,” said Ambar Maheshwari, managing director, corporate finance, Jones Lang La Salle India, a property advisory. Like in this case of HDFC and Embassy, the comfort factor between the fund and the developer plays an important role in facilitating repeat investments, he said.

IT and ITeS still rule Bangalore realty market

Bangalore is seeing a lot of development in infrastructure and real estate. The epithet ‘India’s Silicon Valley’ is only being boosted, owing to more and more land being dedicated to the establishment of tech parks and commercial real estate Grade-A office space (office space with basic infrastructural facilities such as air-conditioning, electronics and so on).


According to global workplace solutions provider Vestian CEO (Asia Pacific) Shrinivas Rao, “In the last five years, around 50 million sq ft of commercial real estate Grade-A office space has been absorbed, out of which more than 75 per cent has been taken by IT/ITeS.”

Most of this is concentrated in four to five markets across the country, of which around 7 to 9 million sq ft/year has taken place in Bangalore and the National Capital Region (NCR) in the last four to five years. Chennai has seen around 4 to 6 million sq ft/year, Mumbai 6 to 8 million, while Hyderabad has seen 4 to 6 million sq ft/year. The rest of the country has absorbed the balance 18 to 24 million sq ft.

Further Rao said, “This year, Bangalore has got absorption of around 10 million sq ft (more than the average). Next year, we will witness vacant space covering around 12 million sq ft, out of which 6 million has already been pre-committed to the Special Economic Zone.” The remaining 6 million sq ft is yet to be committed.

As it goes, close to 75 per cent of the 12 million sq ft is being used for IT/ITeS and the remaining for office space. This has its share of positives and negatives. Rao said that by the next year, the positive trend in terms of real estate development is that SEZs are committed, but it still remains to be seen as to when, the remaining 16 million sq ft of empty space will be committed in the City.

But for the planned absorptions to happen, real estate rates might need some corrections. As realty rates have gone up due to rising costs and rising interest rates, people anticipate a recessionary situation like in 2008, prompting companies to cut spending and put expansion plans on hold. “With the softening of demand, even rentals may go down by the third quarter of next year. Specifically, as far as Bangalore is concerned, we anticipate decent correction in terms of land and rental,” Rao observed.

Karnataka's tier II cities miss out on boom

At a time when most of the progressive states in the country are nurturing ''boom cities'' with phenomenal economic and population growth rates, Karnataka has to be content only with its state capital Bangalore.

According to the latest paper on Census of India 2011(Urban agglomeration and cities - provisional population totals) released recently, Bangalore has been growing like never before, clocking one of the highest decadal growth rates among metros in the country. The total population in Bruhat Bangalore Mahanagara Palike (BBMP), as per the 2011 Census, stands at 84.25 lakh, up from 57.01 lakh 10 years ago.

However, the true story lies in tier II cities in several states which have achieved very high population growth rates and are emerging as investment regions outside their state capitals.

For instance, Surat in Gujarat. In 10 years, the population of the city has gone up by 20 lakh or 71 per cent. The latest census reveals that the city’s population is 45.85 lakh, almost 20 lakh higher than the 2001 findings.

Expansion of the city limit and economic development due to its booming diamond and textile industries have played a major role in achieving this growth.

Pune in Maharashtra is another case in point. The once centre of power of the Maratha Empire is emerging as a major economic hub and is slowly but steadily catching up with its big brother — Mumbai. The population is Pune as per the 2011 census is 50.49 lakh, up from 25.38 lakh just a decade ago. The city is emerging as a prominent location for information technology and manufacturing companies to expand.

Pune has the sixth largest metropolitan economy and the second highest per capita income in the country.

Karnataka, unfortunately, does not seem to have any such tier II boom cities. The state has now 26 cities with population of more than one lakh, but as per the census data not a single city has shown signs of emerging as a popular employment destination or economic hub.

Karnataka’s second largest city Hubli-Dharwad has added just 1.57 lakh to its population during the last decade. Bellary, with all its mining exports and related activities could witness a decadal growth rate of 22 per cent. The population of the city increased from 3.16 lakh in 2001 to 4.09 lakh in 2011.

Belgaum city, which was projected as the second capital of the State in the recent years, has witnessed a decline in its population by 18,000 in the last one decade.

Mangalore, which is considered as a commercial hub next only to Bangalore, has nothing to cheer when it comes to population growth. The port city’s population has come down from 5.38 lakh in 2001 to 4.84 lakh in 2011.

In sharp contrast, neighbouring Tamil Nadu has the city of Coimbatore. Riding on an infrastructural boom and growth in small scale industries, Coimbatore has emerged as one of the most industrialised towns of Tamil Nadu.

It has the highest GDP among the districts of Tamil Nadu, even ahead Chennai. The population in this city, also known as the ‘Manchester of South India’, increased from 14.46 lakh in 2001 to 21.51 lakh in 2011, registering a decadal growth of 32.77 per cent.

For the record, Bangalore is the only city in Karnataka with a population of more than 10 lakh (one million) and that of Hubli- Dharwad is 9.43 lakh.

The IMAX experience is coming to Bangalore

PVR Cinemas is set to bring the IMAX movie experience to Bangalore.

PVR sources who spoke to The Softcopy were reluctant to go into detail about the project, but did say it would be off the ground “by next year.”

A local theater owner said the plan was an open secret.

“We have known that they are going to do it in Yeshwanthpur, in the Brigade Gateway property, for the past six months,” said Amit Gowda, owner of Urvashi Theater and an industry insider.

Project requires big investment

Though PVR was not willing to discuss the financial aspects of the project, a look at the `6.2 million construction price of the Prasads IMAX in Hyderabad provides a fair understanding of the monetary risk.

IMAX is a brand as much as an experience, and even using the name comes with a hefty price tag.

“When we looked into IMAX they asked us for $1.2 million—just to use the brand,” Gowda said.

PVR will have to bank on the power of that brand to put bums on seats as there are a limited number of films shot in the IMAX format.

“Only 16 Hollywood films are going to be made for IMAX this year…there are no local movies made in the IMAX format,” the head of PVR’s projects wing said.

All of this might push the price of a ticket up considerably.

"I’m sure that if they open an IMAX in Bangalore it will not be less than Rs.600-700 a ticket,” Gowda said.

To make the IMAX project profitable, PVR is thinking outside the box—it’s looking into the possibility of resizing superhit movies, such as Sholay, into the appropriate format.

Screen could be up to 8 stories high

Theater screens for IMAX have to be extremely large to handle the larger film format of such movies—10 times larger than the ordinary 35mm film format.

The standard IMAX screen size measures 22 meters by 16.1 meters, but they can be much larger—the LG IMAX Theater in Sydney is the largest in the world and has a screen measuring 35.73 meters by 29.42 meters that covers an area of more than 1,015 square meters.

Though it will cost PVR an arm and a leg to build a venue big enough to screen IMAX films, the response from viewers in other cities has been promising.

The Prasads IMAX in Hyderabad has an average 4½-star rating on Google reviews, with one reviewer, Bhargava Krishna, calling it the “one of the best Indian cinematic experiences.”

GVK buys more stake in Bangalore Int'l Airport for Rs 614cr

GVK Power & Infrastructure today said it has acquired an additional 14% stake in Bangalore International Airport for Rs 613.82 crore, thereby increasing its overall shareholding to 43%.

The announcement comes a day after GVK Power said it has hiked stake in Mumbai International Airport Ltd (MIAL) to 50.5%.

In a regulatory filing, GVK Power said its subsidiary Bangalore Airport & Infrastructure Developers Pvt Ltd bought 53,844,000 equity shares --amounting to 14% -- in Bangalore International Airport Ltd (BIAL) today.

The additional stake in BIAL has been bought from Siemens Project Ventures GmbH (Siemens) for about Rs 613.82 crore.

"With this acquisition, GVK Power would now have an effective stake of 43% in BIAL," the filing said.

On Tuesday, GVK Power said its subsidiary GVK Airport Holdings acquired 13.5% stake in Mumbai International Airport for USD 231 million. This stake was purchased from Bid Services Division (Mauritius).

Following the acquisition, GVK Power's stake in Mumbai International Airport Ltd (MIAL) has increased to 50.5%. MIAL was awarded the mandate for operating and modernising the Chhatrapati Shivaji International Airport, Mumbai (CSIA) in April, 2006.

Shares of GVK Power rose marginally to close at Rs 14.60 on the BSE.

Godrej Properties to develop prime property in Bengaluru

Godrej Properties (GPL) shares rose nearly 2% in the morning trade to Rs 672 after the Mumbai-based real estate developer announced a tie-up with Universal Builders to develop a premium residential villa project at Electronic City in Bengaluru.

“We are pleased to have entered an agreement for our sixth residential project in Bengaluru. The key strategic goal for the company is to build our presence across India's important real estate markets and this development fits in well with our strategy,” Pirojsha Godrej, executive director, Godrej Properties, said in a statement.

Under the partnership, GPL will act as the development manager, for developing approximately 4 lakh sq. ft of premium residential villas, spread over 14.5 acres at Electronic City, the company said in a press note.

Universal Builders, a Bangalore-based real estate firm, which actually owned the land had approached GPL to develop it in the form of joint venture (JV), an industry source told Moneycontrol.com.

The company keeps scouting for such JVs to expand its business. GPL will receive 11% of the total revenue from this development as development manager fees.

The project, located at close to National Highway 7, will offer a range of luxurious amenities to its residents including a state-of-the-art club house and a swimming pool, claimed the company.

INFRASTRUCTURE,DEMAND FOR OFFICE SPACE

CREATE POTENTIAL RESIDENTIAL HUBS 

NORTH

Various road development projects,ambitious ventures such as Metro rail connectivity to the international airport and large parcels of land that is available to till the airport,make Bangalore North a most sought-after residential and commercial space 

Infrastructure 

The elevated road to the international airport is a project that is sure to reduce the commute time to the airport.There are plans to extend the Metro rail link to the airport too.

Commercial development 

"The investment grade office market in India has become one of the fastest growing real estate destinations in the world.With more than 265 million square feet of operational space in 2010,this number is slated to almost double by 2015,"says Ashutosh Limaye,Head - Research and Real Estate Intelligence Service,Jones Lang LaSalle India.

In Cushman and Wakefield's and Global Real Estate Institute's (GRI) annual report "Embracing Change - Scripting the future of Indian Real Estate" estimates a total commercial office space demand to be approximately 200 million sq ft in top seven cities in the country as against a marginally higher supply of 243 million sq ft.

Bangalore which topped the ranks in demand for office space at approximately 57.3 million sq ft by the end of 2015,will witness supply of only approximately 26 million sq ft.This makes it the only city in the country that will see demand exceed the planned supply in the forthcoming years,indicating the potential for developments.Scarcity of options and lesser availability of space is likely to prevail in the city unless second generation supply increases.This may put an upward pressure on rentals in select micro markets.

Even though there are land parcels earmarked for the aerospace SEZ,ITIR region,KIADB's Hardware park,the demand for commercial spaces remains largely unfulfilled.

Demand for residential property 

"The airport road is under construction yet it has begun to attract many residential as well as commercial sectors.Owing to the better road and connectivity,it's expected to witness rise in demand for the rentals by 10-15 percent.Residential catchment areas around the airport are Yelahanka,Hebbal,etc where we can see the market value increasing and many new projects have been launched in Yelahanka and Hebbal,"says Ganesh Vasudevan,Business Head and Vice President of India-property.

The Doddaballapur road has emerged as a destination for residential clusters.The Greater Peenya industrial project along with the National Highways of India's elevated expressway,have resulted in many residential projects emerging in the Jalahalli belt and with Metro connectivity reaching till Hesarghatta cross,this region will be well-connected.There will be a demand for affordable housing projects too from the industrial workforce here.

EAST

This part of the city has witnessed a metamorphosis like never before.From being a typically manufacturing region,it is now a bustling micro market with gated communities,high-end apartments,malls,multiplexes,international schools and high-tech hospitals.

Infrastructure 

The widening of Old Madras Road,along with the existing IT development,upcoming SEZ areas and large facilities and campuses coupled with retail clusters and good social infrastructure make this area a sought-after one.

Demand for residential property 

"Old Madras road CMH Road etc witness an increase in interest as key commercial and retail areas for development as well as investment in the near future.A number of real estate developers in Bangalore are concentrating on the areas adjacent to Old Madras Road for key residential projects (varying from topend residential apartments to the mid- level segments),retail malls,etc.Demand for real estate would continue to be high and may result in an increase in rentals.Availability of large land tracks for development along the metro line though is limited,"explains Anshuman Magazine,Chairman and Managing Director,CB Richard Ellis South Asia Pvt Ltd."It is believed that in the coming span of 5 to 10 years,Old Madras Road and the surrounding areas,would be a major commercial and residential hub as it is one of the roads linking Central Bangalore (Central Business District-M.G Road,Kasturba Road,Lavelle Road Etc) and the East Bangalore (PBD- Whitefield,Outer Ring Road).The Metro connectivity just adds as a perfect finishing touch to the scheme of things projecting a high growth sector in the real estate markets,"adds Anshuman.

The focus for residential development will be in Whitefield,Off Old Madras Road and Hoskote.

SOUTH

An IT stronghold,the South of the city has many residential clusters coming here and the demand for property along this belt has further given impetus to the infrastructure growth.The most ambitious project was the recent project of the elevated toll road to Electronic city.Another long-term connectivity project will be the Metro Reach Four and the seamless Outer Ring Road (ORR) project.

Demand for residential property 

Anurag Mathur,Managing Director,Cushman and Wakefield,India says,"The present economic situation may be viewed as a transitory point for the real estate dynamics in India.Although,the market looks positive in the medium term with considerable demand across sectors,the industry seems to be affected by the rising interest rates,rise in construction costs and inflation.However the long term perspective suggests that the sector will continue to witness demand in all as."

According to a report by Cushman and Wakefield,India is expected to experience a demand of 3.94 million housing units,growing at a steady pace of 11 percent Compounded Annual Growth Rate (CAGR).Of this 2.3 million units will be the demand from the top seven cities alone.Bangalore is expected to see a demand of approximately 2,87,000 units in this period.As a result of significant population migrating into the Tier I cities,these locations are likely to witness highest demand.

According to the report,the anticipated demand is likely to exert an upward pressure on property prices especially in markets like NCR,Mumbai and Bangalore where the demand supply gap is high.Says Akshay Kulkarni,Executive Director,Cushman and Wakefield,India "The housing demand supply scenario and the resulting gap is likely to reduce in the next five years.However,the upcoming supply needs to be priced judiciously along with appropriate location,infrastructure,connectivity,relevant features and amenities to ensure absorption."

New residential developments along Sarjapur Road,Bannerghatta Road and Kanakapura Road outline the demand from the IT workforce in this area.

WEST

The widened Mysore Road,recent move by the State Government to free up farm land for realty development are some of the factors that will have a bearing on development in this direction of the city.

Demand for residential property 

"The demand for mid- segment homes in Bangalore is strong,particularly from the working professionals who are starting a family or have a family with young children.A variety of options in the form of 2-3 bedroom apartments ranging between 1,300-1,600 sq ft is available to choose from.In a recent survey conducted by IndiaProperty,nearly 67 percent of new property buyers in Bangalore are looking for 2 bedroom apartments in the 750 to 1,000 sq ft size bracket.More demand is visible in and around established neighbourhoods of Jayanagar,J P Nagar,R V Road,Sarjapur Road,Koramangala,Bannerghatta Road,BTM Layout and also in Electronic city,"says Ganesh Vasudevan,Business Head and Vice President of Indiaproperty.

Upcoming areas such as Uttharahalli and Kengeri have emerged as residential hubs,with good social infrastructure and connectivity.

CITY TOPS IN DEMAND FOR OFFICE SPACE 

According to a recent report by Cushman and Wakefield,a firm specialising in real estate,Bangalore tops in demand for office space over the next 5 years,while all other cities in India will see an oversupply.There are several ongoing infrastructure projects which will get completed during 2012,adding to the attractiveness of office markets in the city.Bangalore occupies around 55-65 percent of IT office space.Another firm Jones Lang LaSalle India stresses that the leasing in the Indian office space is dominated by three industries- Informationa Technology (IT/ITeS),Banking Financial Services and Insurance (BFSI) and Manufacturing.Nearly 70 percent of this leasing transaction volume is contributed by foreign-based firms,the report adds.

PROPERTY CLOSE TO METRO STATIONS COMMANDS PREMIUM 

These are the stations that will be along the entire route.A map providing these details has been displayed right above the door of the Metro coach,with LED lights flashing the progress of the Metro as it passes each station.This will enable commuters to head to the doors when they see flashing light approach their destination,since the door is kept open for 40 seconds (This door opening time will be flexible depending on commuter density).

East-West corridor 

Baiyappanahalli,Swami Vivekananda Road,Indiranagar,Halasuru,Trinity,M G Road,Cubbon Park,Vidhana Soudha,Sir.M.Visveshwaraya,Kempegowda,CityRailwayStation,MagadiRoad,Hosahalli,Vijayanagar,Attiguppe,Deepanjali Nagar,Mysore Road.

North-South corridor 

Puttenahalli,JayaPrakashNagar,Banashankari,RashtreeyaVidyalayaRoad,Jayanagar,SouthEndCircle,Lalbagh,NationalCollege,KrishnaRajendraMarket,Chickpete,Kempegowda,SampigeRoad,Srirampura,KuvempuRoad,Rajajinagar,Mahalakshmi,SandalSoapFactory,Yeshwanthpur,YeshwanthpurIndustry,Peenya,Peenya Industry,Dasarahalli,Nagasandra 

SEVEN SIGNAL-FREE CORRIDORS TO BE TAKEN UP BY BBMP 

Chord Road-Magadi road Dr Rajkumar Road-Yashwantpur Okalipura junction Vellara junction-Central silk board Jayadeva junction-Hulimavu.Mekhri circle Old Madras Road-Hope Farm junction Old Airport Road from Vellara junction-Kundalahalli gate Mysore Road- Central Silk Board junction.

BBMP in its recent budget has also proposed construction of five flyovers 

Banashankari temple,Koramangala Sony World junction,Malleswaram Maramma circle,Chord road,Rajajinagar and Vattal Nagaraj road.These flyovers,will act as grade separators,easing the traffic bottlenecks that these junctions have become.Seven underpasses at Jayanagar V Block,J P Nagar III and IV Phase,Bashyam circle in Sadashivanagar,Shivananda circle,Fountain circle in Okalipuram,Rani Chennamma circle and Hosur-Begur junction have also been planned.

METRO WILL SPUR BUSINESS ACTIVITY IN CITY

The need for private vehicles can be reduced to a significant extent,especially for those working in IT belts,with the Metro,says Satyendra Kumar 

Ihave travelled in different Metros,from Kolkata and Delhi to New York,London and Los Angeles.I feel the benefits of a sound and efficient public mode of transport are many.In Mumbai,the local trains help the residents in a tremendous manner.The Metro in Bangalore can impact our lives in many ways.One,it will shorten the time of travel between point A and point B.For instance,in Delhi,if I had to go to Dwarka from Connaught Place in a taxi,it will take me about one to one and a half hours.When I went in the Metro,it took me just 25 minutes.Similarly,in London,where the roads are narrow,if I have to travel,say about 20-25 km in a taxi,it will probably take about two hours at least.The Tube shortens the time spent on travel enormously.So,the first impact would be a huge benefit to people as they will spend lesser time commuting to work.

Two,the Metro will also build strong social networks.Now,this can be easily explained taking Mumbai's local train as an example.The same groups of people tend to travel together as their workplaces and work timings are similar.There is a great possibility of interacting with other people during the commute.This is opposed to travelling in your own personal vehicle where one commutes across the city without interacting with other people.

Another impact will be a cleaner and better environment.As people who would have otherwise used their two-wheelers or cars start travelling by the Metro,there will be significant decongestion of traffic on the roads.Pollution will decrease and the greenhouse effect will considerably weaken.The total consumption of petrol within the city will decrease.Plus,there will be at least two to three fold increase in savings that people would have otherwise spent on purchasing fuel.

Now,from the business perspective,a good and efficient public transport like the Metro will spur multi-national companies to feel that the city has enough and more opportunities.In Shanghai,there are feeder lines to the industrial belt and IT sectors that help transport the workforce to their places of work.With the smaller extensions of the Metro gearing up,there will be promising future opportunities for professionals.Congestions on the roads will reduce significantly when the Metro connects the IT and other sectors with the rest of the city.Currently,Electronic City has about 250 buses that ferry employees to work from different areas of the city.When the Metro comes into these areas,the need for company buses will be reduced and that will,in turn,significantly reduce congestion on the roads and the consumption of fuel.There are some cautions as well.When the Metro starts its operations,the areas near the stations become difficult to manage and are almost chaotic.The Corporation should look at organising facilities like feeder buses/autos in a systematic and organised manner.There has to be a collective pride in the Metro.Many cities have immense pride and respect for their Metros.Delhi Metro is the second after the New York City Subway to be ISO 14001 certified for environment-friendly construction.Some Metro stations conduct rainwater harvesting as an environmental protection measure.It is also the first railway project in the world to earn carbon credits after being registered with the United Nations under the Clean Development Mechanism.People in Delhi are proud of the Metro and take care of it.In that manner,Namma Metro can provide some ammunition for the city to avail the opportunities to register under the Clean Development Mechanism and hence take pride in a green city.I wish the Metro team all the best and look forward to the day when the primary mode of transport for our workforce will be the Metro.

(The author is Vice President,Infosys) 

BOOST FOR ECONOMIC GROWTH OF CITY

Namma Metro will make this city a global metropolis and investment gateway of Karnataka,says Sajan Poovayya 

The spatial structure of Bangalore is polycentric and the city is growing at the fringes more than in the inner areas.The growth pattern in Bangalore is in concentric circles,moving outwards.The large and growing middle income segment of Bangalore mostly live in planned residential layouts spread across the city.While Bangalore's income groups are generally mixed throughout the area,increase in land prices is reflected in clustering of groups.This has obviated a 'hub-and-spoke'travel pattern and resulted in 'many-to-many'travel pattern increasing trip lengths.Urban transport in Bangalore,accessed across income groups,remains completely roadbased and dominated by buses,two-wheelers and autos.Conventional public transport services are provided by BMTC,with buses operating in mixed traffic,without any privileges like exclusive lanes or priority of passage at signal intersections.

A 2005 World Bank report had noted that Bangalore lacks a comprehensive urban transport strategy,linked to an urban development strategy and that Bangalore is in need of a demand-segmented,serviceoriented urban transport strategy,which would balance growth with equity concerns,with a strong but cost-conscious orientation in favour of public transport modes.Namma Metro is indeed an appropriate response to the problem.

As Bangalore has grown richer,vehicle ownership and use has grown more rapidly than available road space,resulting in increased congestion and traffic-generated air pollution.Rail-based mass transit systems are less congesting than are road-based systems and can be very important for those who are peripherally located and have long journeys to access employment.

Namma Metro is environment-friendly and helps retain Bangalore's 'Green City' tag,by reduction in emission of greenhouse gases.It can,like the Delhi Metro,become one of the first few railway projects in the world to be recognised by the United Nations under the clean development mechanism which will enable it to claim carbon credits.

Namma Metro will also be an impetus to economic development,by saving fuel costs,vehicle costs and emission costs.From an investment perspective,an efficient Metro will be attractive for the city's investment climate and further growth.

As Bangalore has grown richer,vehicle ownership and use has grown more rapidly than available road space,resulting in increased congestion and human-vehicular conflict.Nearly 0.5 million people die and up to 15 million people are injured in urban road accidents in developing countries each year.Projects like the Namma Metro will greatly help in reducing human-vehicular conflict.

Namma Metro will certainly be a better mode of transport (cleaner,quicker,punctual) than existing inadequate modes and will be known for reliable and safe journeys.The project has been implemented efficiently by BMRCL.The need is for the transport planners to streamline public transport system in Bangalore by focusing BMTC bus resources on inter-Metro-terminal transfers and eliminating duplication of routes.

One cannot expect miracles from just the commissioning of Reach I of Namma Metro.While the denizens have suffered the shortterm pains of Metro construction,it is time to savour the benefits of its long-term gains.It is important for the Metro penetration to increase,as the long-term benefits of the Metro can be felt only if connectivity is established between the multiple suburbs and business districts of Bangalore.

Namma Metro is also set to position Bangalore as a global metropolis and make it the investment gateway for Karnataka.

(The author is former Chairman,Karnataka State Council,Federation of Indian Chambers of Commerce and Industry)

PLEASANT RIDES TO WORK AND BACK

A bit of etiquette will make the convenience of the Metro even more pleasant.

The citizens of Bangalore have been eagerly looking forward to Namma Metro for a long time.They have put up with traffic snarls,construction barricades and long-winded detours to see this 'three compartment wonder' turn into reality.Very soon,Bangalore will become only the third city in India after Kolkata and Delhi to own a Metro.This is indeed a tribute to the prestige and prominence that the city has come to acquire in India,and outside.

From a quiet,laid-back environment that prevailed till about 15 years ago,the city has turned into a bustling metropolis of nearly eight million people who have made it their home from across the country and the world.

Bustling city 

The ushering in of the Metro signifies that Bangalore is indeed a global city on the move.The Metro has made a big difference to the lives of the people of Delhi.Today,they travel from Noida to Gurgaon with one change in between in just about 45 minutes,something that could never have been imagined earlier.Trains go full especially during peak hours and commuters are remarkably disciplined.Bangalore still has a long way to go.The BMTC's Volvo buses have been a success in the ITPL/Whitefield sector and most of those passengers are potential Metro travelers.Till such time that all the major areas of Bangalore get networked with Majestic as the common transit point,Reach I will be serving a limited segment.Nevertheless,even with this limited edition,the Metro will considerably reduce traveling time for a large number of people in the Indiranagar,Jeevanbhimanagar,C V Raman Nagar and adjoining areas around the CBD and Byappanahalli.If adequate parking space is provided at Byappanahalli and Swami Vivekananda Road (Old Madras Road) stations,office goers can conveniently use the Metro to reach M G Road and back.However,there could be congestion near Metro stations that could result in traffic jams.The authorities must address this concern.Space must be clearly earmarked for buses and autos near each Metro station.

Metro etiquette 

To enjoy the Metro experience,commuters must follow some guidelines.They must form a queue at each doorway and wait for people to alight before boarding in an orderly manner.They must stand behind the safety line on the platform to avoid accidents.They must stand clear of the door when it opens upon reaching the station.They must avoid carrying heavy luggage into the Metro.As the seats are limited,they must allow the elderly,physically challenged and people with young children to sit down.They must avoid talking loudly on the mobile phone or with fellow commuters.They must look after the metro as if it's their own and avoid throwing litter on the platform or in the station premises.Above all,they must not get into 'Metro rage'.They must respect the fellow commuter and allow him his space.

Last mile connectivity 

'Last mile connectivity' is perhaps the most critical factor in the running of any Metro rail system.Commuting safely from the residence to the boarding station and again from the alighting station to one's destination is vital for the success of the Metro.It would not help if the commuter has to compete for conveyance or pay through his nose to get to his residence or office.BMTC's proposed Metro Feeder Service needs to be efficiently managed to ensure safe transportation of people particularly during early and late hours.

Green factor 

By far,the most significant contribution of the Metro would be towards the environment.By ferrying a few hundred people on each trip,the Metro will definitely help in bringing down the number of vehicles plying along its route.This in turn brings down the level of pollution in the air around the area.Being completely air conditioned,travel on the Metro will also be free of pollution.

Increase in productivity 

Driving a car or riding a bike in Bangalore is quite stressful.We are fatigued and exhausted by the time we reach the office.Taking the Metro for work could ease tension and help in concentrating better on work.This could result in higher productivity as well as camaraderie among colleagues.The anxiety of getting into traffic gridlocks or waiting for long durations at traffic signals will be eliminated.One can also network with friends and colleagues while traveling on the Metro.Weekends could be fun with families bonding over a ride on the Metro.The authorities must work towards a well-connected and networked Metro with more speed and alacrity in the coming years.In the meanwhile,we must warmly and enthusiastically welcome Namma Metro when it makes its inaugural journey on Reach I.

(The author is Director - Communications,Texas Instruments) 

VOICES 

The Metro will be a convenient mode of transport.The traffic congestion should reduce and the way I see it,the pricing is also very economical.Now you can predict the time taken for travel between one place and another.Since I live off Brigade Road,I can now take guests around by the Metro.It will save time tremendously.

Ramesh Ailoo C M H ROAD 

With this efficient mode of transport,people will have another option to consider.The Metro is time-saving,fast and hasslefree.If I have to go to M G Road,I would definitely use the Metro for I can save myself parking woes.Feeder buses should ply in and around neighbouring areas.

Naren Shah DEFENSE COLONY 

The Metro is a clean and efficient mode of transport.I would definitely use it whenever I get a chance to.I am sure more people will start using it as the connectivity extends to all parts of the city.

Ranjini Sudhakaran INDIRANAGAR 

The Metro will be good for business on this road.It will help those who come here to shop and dine.Because of the works going on,people used to avoid this road.Now,the going will be upbeat.

Harish Patel C M H ROAD 

Bangalore Metro to go Live From October 20th

Namma Metro leads to rise in realty rates

After Metro, Bengaluru set for High Speed Rail Link

The High Speed Rail Link (HSRL) project, aimed at providing faster access to the Bengaluru International Airport (BIA), could well see the light of day with the State government asking Bangalore Metro Rail Corporation Limited (BMRCL) to implement the project, with certain modifications.

The project has been pending before the Union urban development ministry for some time now due to lack of clarity on the modalities of implementation of the project. With the project being handed over to the BMRCL, the decks have been cleared for the HSRL project.

“The concept of business class and economy class, with differential fares, as followed by airlines, will be adopted for HSRL” said BMRCL managing director N. Sivasailam. Asked if the project will remain exclusively for airport connectivity, Mr Sivasailam said market forces will decide on this.

He however, hinted that it will cater to other passengers apart from the airport passengers en route to BIA.

The BMRCL will now invite requests for proposal (RFP) from bidders. Five bidders have already been selected during the request for qualification by the Karnataka State Industrial Infrastructure Development Corporation (KSIIDC). After opening the qualification bids, BMRCL will suggest to the state government whether to go ahead with the same RFP or to call for fresh RFP, said sources.

Earlier, the state government had formed a special purpose vehicle for the project under KSIIDC. The project was earlier sought to be executed under public-private partnership (PPP).

Get connected

* The 35-km rail link to the airport, estimated to cost Rs 5,800 crore, will help reach BIA within 30 minutes

* Route will have stations at Cubbon Road, Hebbal and Yelahanka

* The state government has assured BMRCL of providing land along Sankey Road, Ramana Maharshi Road and Bellary Road free of cost

Bangalore International Airport Limited (BIAL)

MALLYA’S WHITE HOUSE IN THE SKY

THE THREE TOWERS THAT SUPPORT
VIJAY MALLYA’S MANSION WILL HOUSE 82 LUXURY APARTMENTS OF 8,000 SQ FT EACH

Mumbai can boast of Mukesh Ambani’s $1 billion home-Antilla, Delhi has its Luytens’ patch, and now Namma Bengaluru gets a billionaire’s wonder — a White House in the sky.
Kingfisher Towers- Residences at UB City, the new home of India’s flamboyant business tycoon, Vijay Mallya, as well as other billionaires is under way and will be completed in the next three years.
TOI, in its edition dated July,11, 2008, was the first to break the news that Vijay Mallya, was razing down his ancestral home on Vittal Mallya Road, to make way for a ultrahigh end 34-storey millionaires paradise on top of which he would have a penthouse.
Now, The Sunday Times Of India gets you the first ever visuals and details of Vijay Mallya’s ‘White House in the sky’. In all probability, Mallya, will be the only man in the city who can boast of having a 1-acre parcel of land that’s situated in the sky, and not on the ground below.
ADOBE OF MILLIONAIRES
Situated in the heart of Bangalore City, Kingfisher Towers, has around 82 apartments split in three blocks, of which only 72 are for sale. Of the saleable units 30 are Mallya’s and the rest are with Prestige. The remaining 10 unsold units are to be spilt among members of Mallya’s family.
There are 5 points of entry to the apartments, but to begin with only two will be used. While the millionaire residents will be using the Kasturba Road Cross entry, Mallya has a separate entry from Vittal Mallya Road, which incidentally the same entry as that of his old house. The separate entry, which is adorned on one side by a 39,000sqft private garden, leads Mallya to his personal lobby, a home-office, and a private lift to the penthouse.
Each of the other apartments is 8,000 sqft in size and begins at a price tag of Rs 20 crore. The apartments begin only from the 5th floor onwards, and as one goes higher, the price increases. The first four floors along with two floors in the basement have been reserved for car parking. While each resident would be getting around 3- 5 car parks, Mallya gets to have a car park area that can accommodate around 100 cars. Mallya will also have a designated area where he will be showcasing his collection of vintage cars.
Initially, the project was to have around 100 units in three different sizes, but the plans were changed to have apartments of one size of 8,000 sqft. It is learnt that many of the millionaire buyers didn’t like the idea of there being different apartment sizes; as such a scenario would result in ego clashes among the billionaire club.
TOI has learnt that while Prestige have sold out their share of the apartments; Mallya has just begun the process of selling.
Kingfisher Towers might well be the only apartment, in Bangalore, where maids would get their own personal lift and lobby area, which would lead in to their private living quarters.
The luxury project has a 6,000 sqft clubhouse and garden on the 5th floor, a similar size swimming pool area on the 10th floor, a badminton court on the 15th floor, and party hall and terrace garden on the 25th floor. There is also a 25,000-sqft common garden area for residents that is situated along the entry.

MALLYA’S PENTHOUSE
Situated on the 33rd and 34th floors of the building, Mallya’s penthouse sits on one-acre of land, which is supported by the three blocks that tower up 32-storeys high. The penthouse, split in two levels, will have a built up area of around 40,000 sqft in size, and would boast of a wine cellar, an indoor heated pool, an outdoor infinity pool, a gym, a salon, and a spa to name a few. The roof of the penthouse will have a helipad and, of course the stars above!
RECAP
In 2008, Vijay Mallya, chairman, UB Group decided to raze down his 4.5 acre ancestral home to make way for a luxury high-rise, on top of which he would build a penthouse for himself. But, the project was kept under wraps, and Mallya had denied to TOI that such a idea was even being conceptualized.
Once upon time, the entire land parcel, which now houses UB City, and the upcoming Kingfisher Towers, comprised of a brewery, which belonged to the UB Group. The land parcel in front of UB City on which the J W Marriott hotel is being built was also part of the brewery.
In September 2009, while briefing share holders at the 93rd annual general meeting of United Breweries (holdings) Limited, the parent company of the UB Group, Mallya had said, “We have got permission to develop an additional 500,000 sqft of space in UB City. This has come about due to changes in the zonal regulations of the area, which has resulted in an increase in the floor area ratio (FAR).”
While Mallya didn’t comment further on the subject, UB Group CFO, Ravi Nedungadi, had then said, “there are plans of building a highend apartment.”
Then in 2010, while declaring the fourth quarter results of United Breweries Holdings, Mallya himself announced that he had “executed a joint development agreement with a developer on 26th April 2010, for the development of a luxury residential building in the available land in UB City.” The developer was none other than Prestige Group. He also mentioned that the joint development would be in the ratio of 55% to be UB and 45% to Prestige.
Meanwhile, Prestige Group, which owns the Oakwood Premier Prestige Serviced Residences in UB City, began renovation work on 46 serviced apartments, situated on the top two floors of the hotel, which would be the temporary address for Mallya and his family, until Kingfisher Towers- Residences at UB City is built.


View from Shell petrol pump


Vijay Mallya’s Penthouse

Indias silicon valley adds rail as jams threaten tech grip

Bangalore, India’s Silicon Valley, will open the first section of a $1.7 billion metro railway next week as the city tackles congestion that has dented investment and made it the world’s second-worst for parking.

A three-car train will run on a 6.7-kilometer (4.2 mile) elevated track on the maiden trip on Oct. 20, according to the Bangalore Metro Rail Corp. The network will stretch to 42 kilometers by 2013.

“The metro project will be a game-changer for the city,” said Anshuman Magazine, managing director for South Asia at CB Richard Ellis Group Inc. “The metro should’ve been there before, but it’s still timely.”

Bangalore’s population has jumped almost 50% in a decade to 9.6 million as a temperate climate and a pool of low- wage software programmers attracted companies such as Infosys Ltd. and International Business Machines Corp. (IBM) Roads and power systems have struggled to keep up with the pace of growth, creating opportunities for Chennai and Hyderabad to challenge the city’s grip on India’s booming outsourcing sector.

Bangalore’s administration “has to show it cares by providing better services like power and transport,” said Vinod K Nowal, president of the Bangalore Chamber of Industry & Commerce, and a director at JSW Steel Ltd. “There are now other states who are more aggressively attracting investments.”

Facebook Inc. last year opened its first India office in Hyderabad, about 570 kilometers north of Bangalore. The Palo Alto, California-based company didn’t immediately respond to e- mailed Bloomberg News questions about its choice of the India office location.

Colonial Rulers
Bangalore, which opened a new airport in 2008, had 554,000 technology workers in March 2009, about 25% of the country’s total, according to latest data available from the government. They mainly sat in Whitefield, a suburb that was once a settlement of India’s former colonial rulers, where companies such as Tata Consultancy Services Ltd. (TCS), India’s largest software exporter, have set up offices.

The metro’s first phase will start from Baiyappanahalli in the city’s east, about 14 kilometers short of Whitefield. Once the network is completed, it will take 44 minutes to travel from the city’s north to south and 33 minutes between the east and west, according to Bangalore Metro’s website.

“I won’t think twice about giving up my car once the service starts,” said Krishna Murthy, who runs an industrial machinery company in the city’s north. “Now I take an hour to travel eight kilometers to reach my home.”

Boycott Threat
The city is the world’s sixth-most painful for commuters and worst for parking behind New Delhi, according to a survey of 20 cities by IBM. In 2005, technology companies threatened to boycott an annual industry event sponsored by the state to protest the city’s poor infrastructure.

Bangalore, home to Infosys and Wipro Ltd. (WPRO), two of India’s three biggest software companies, and IBM’s local unit, contributed 749 billion rupees ($15 billion) of software exports in the year ended March 2009, according to official data.

Still, software exports expanded at the slowest pace in four years in that year, as the global economy slowed and as other Indian cities won business. Bangalore’s 23% growth rate trailed a 29% gain for Chennai and a 25% increase for Hyderabad.

‘Preferred Destinatons’
Gurgaon and Noida near the nation’s capital are also becoming “preferred destinations” for technology companies, according to The Associated Chambers of Commerce & Industry of India, a New Delhi-based lobby group.

“When people look to make investments, the infrastructure is a big part of what they look at,” S.D. Shibulal, chief executive officer of Infosys, said in an interview in Bangalore. “The better the infrastructure, the better it is for attracting investments.”

The metro rail is owned by the federal government and Karnataka state, of which Bangalore is the capital. The project was funded by loans from Japan International Cooperation Agency and Asian Development Bank. A group of companies including state-owned BEML Ltd. (BEML), Mitsubishi Corp. and Hyundai Rotem Co. are supplying the railcars.

BEML climbed 5.3%, the most since Feb. 14, to 514.70 rupees at the close in Mumbai trading. The BSE India Sensitive Index increased 1.2%.

The project is the nation’s first new metro system since Delhi Metro Rail Corp. started services in 2002. India is now stepping up investments in public transport as economic growth spurs record car sales, worsening traffic bottlenecks.

Billionaire Ambani
Larsen & Toubro Ltd. (LT), India’s biggest builder of airports and power networks, has won a contract to build a rail network in Hyderabad. Reliance Infrastructure Ltd. (RELI), backed by billionaire Anil Ambani, is also constructing a similar project in Mumbai, the financial capital. Overseas trainmakers Bombardier Inc. (BBDB) and Siemens AG (SIE) have set up railcar factories in the country while Alstom SA (ALO) is building a plant.

India’s Planning Commission last year said the nation will need to spend $1 trillion on highways, ports, airports and utilities between April 2012 and March 2017 to support economic growth.

About 66% of Bangalore’s people are expected to use public transport for their commute in the city after the metro is complete, from the present level of 55%, according to the rail operator.

“Bangalore has been lucky in the past,” Richard Ellis’s Magazine said. “In spite of not having an international airport and not having an efficient public transport, it still got huge investments. But, you can’t rest on that for too long.”

METRO SET TO PUSH RETAIL PROPERTY RATES

The increase in number of footfalls anticipated thanks to the Metro connectivity is leading to more demand for retail property in the corridor

The Metro countdown is on. With the launch scheduled for next week, many are looking at the Metro for what it will mean to the city in the months ahead. Reach I - the stretch from M G Road to Byappanahalli - is billed as a trailer, an indication of things to come. It will showcase the Metro and what to expect from it in the next couple of years by which time the network is scheduled to be complete. 

The Metro promises to be a game changer for the city's property sector. Going by what the Outer Ring Road (ORR) and more recently the six-laning of Bellary Road have done for the city's realty sector, the prospects from the Metro is much more. While these roads brought connectivity to specific localities in the vicinity, the Metro networks the entire city. Along with the connectivity, it is also a mechanism that delivers the target audience to the doorstep, a step ahead of the connectivity that the roads entailed. 

So, what does this mean for the realty sector and more importantly the investor? 

Property in the vicinity of the Metro corridor, to begin with, will acquire a 'premium' tag. The Reach I commissioning promises to work well for the other segments thanks to a demonstration effect. With the Metro passing through two premium shopping and commercial districts, the convenience of connectivity will lead to demand for commercial spaces to begin with. Retail outlets and eateries along the way will find the connectivity a boon with more footfalls, leading to higher value for strategically-located property. 

That brings up the question of what 'strategically-located' means? While walking distance from a station is certainly a strategic location, convenience through the feeder bus service too makes for strategic location. In the context of the property market dynamics, location has many connotations. A property can be termed to be in a premium location if it is on a main road, at a junction, a corner building or near a significant landmark. Now, it can also be strategically located if it is connected to the Metro directly by virtue of being near a Metro station or close to a feeder bus stop that thereby connects it to the Metro line. The impact of such a location will be more obvious once the entire network is complete. However, a property with this potential will be a value buy, especially if it is in the proximity of ongoing Metro construction work and therefore at a discount. 

The retail outlets along the C M H Road stretch are now 'premium' locations. "When the construction was on, many closed down as there was a sharp drop in business. Now, it is picking up as the road has opened up and it is even broader than before. The pavement has been planned well. Once the Metro starts, business will boom as footfalls will increase tremendously", says Ramesh Ailoo, who owns a garment store on C M H Road. 

The demand for retail space is picking up. "Rentals have gone up since the last two months as the Metro launch was expected. More businessmen are looking at retail space on C M H Road thanks to the Metro. This will happen in the other Metro corridors too", adds Ramesh. 

The additional footfalls once the Metro begins operations is a key factor. "We are expecting more shoppers to come once the Metro starts running. In fact, property prices have already gone up in the recent past on the back of the Metro launch", says Bhoopalam P Srinath, President, Bangalore Trades Association. 

While many heave a sigh of relief that parking woes will be a thing of the past, there are many other angles to the Metro too. The convenience of shopping is one that is waiting to be discovered. To the shoppers connected by the Metro, it is cause for celebrations. 

QUICK BYTES 

• THE INCREASE IN NUMBER OF FOOTFALLS ONCE THE METRO STARTS OPERATIONS WILL PUSH DEMAND FOR COMMERCIAL PROPERTY
• A PROPERTY IN THE VICINITY WILL ACQUIRE A ‘PREMIUM’ TAG 
• PROPERTY NEAR AN UPCOMING METRO CORRIDOR COULD BE A VALUE BUY NOW

Supply May Overpower Demand in Office Space Segment by 2015

Office space market in India’s top seven cities will see total supply of nearly 243 million sq ft by 2015 and this would be 17% higher than estimated demand, indicating a clear oversupply, Cushman & Wakefield and Global Real Estate Institute said in a report. In Mumbai, supply at 78 million sq ft is expected to outstrip demand by 125% by 2015-end and is expected to experience some downward pricing trend going forward, the report said. Of the seven cities - National Capital Region, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata - only Bangalore will see demand for office space exceeding supply.

Bangalore will witness the highest demand of approximately 57.30 million sq ft followed by 34.4 million sq ft in National Capital Region and 33.9 million sq ft in Mumbai. However, during this period, cities like Kolkata, Hyderabad and Chennai are expected to see a better rate of growth compared with others. In the next five years, the highest estimated supply of grade A office will be witnessed in Mumbai followed by 40 million sq ft in NCR, 30 million sq ft in Chennai and 29 million sq ft in Pune.

“As the supply will be exceeding the demand for commercial office spaces in the next 5 years this may lead to increase in vacancy. The corporate clients in such a scenario will look for better value proposition in terms of rents, maintenance cost, parking etc, while expanding and consolidating operations,” said Arvind Nandan, executive director, Consultancy Services, Cushman & Wakefield India.

Chennai is estimated to be the most active market for real estate with the highest demand growth of 15% compounded annual growth rate during next five years. Kolkata is expected to have lowest demand-supply gap owing to reduced pace of supply and second highest growth in demand during the period.