Commercial Property Investments in Bangalore
Bangalore has been a leading spot for corporate investments in the last five-ten years. There has been an increase in the number of commercial investments among different categories of commercial properties and in office space absorptions. In a report provided by one of the top real estate platforms, Bangalore has been described as the star which shines the brightest due to the fact that it hosts some of India’s top industrial giants.
The commercial space supply in Bangalore has also recorded the highest in the year 2015 when the city accounted for an overall office stock of 127 million sq. ft. The fact that most of India’s technological horizons expand in Bangalore, has resulted in the dominant growth of the frontier. Bangalore has also been instrumental in developing India’s biotechnology, aerospace, etc.
There is a huge demand for commercial properties in Bangalore, making it an ideal location. The demand for commercial real estate properties in Bangalore has been skyrocketing in the past few years and it is expected to do so in the future as well. Thus you must manage to invest in the best commercial property to ensure high returns for a long time. This article will provide you with some reasons why you should invest in the commercial real estate market of Bangalore and some of the ideal locations for commercial investments.
Why you should invest in commercial property
It is not a hidden fact that commercial properties are costly possessions. They are also highly beneficial and rewarding in the long run. Return on investment is something that drives real estate investors. By investing in a commercial property you open yourself to a high rate of capital appreciation.
You will also be able to generate high amounts as monthly rent in comparison to residential rental properties as well. Office spaces, warehouses, retail, industries, and institutional real estate properties are most likely to earn you a steady and stable income. Thus the fact that commercial properties offer a regular high income and high rates of price appreciation is what makes it the ideal option for real estate investment among several investors.
Bangalore being a hotspot for commercial developments will also be a great location for commercial investment because it offers high returns and a regular income to its investors.
Different options under commercial real estate
While investing in the commercial real estate sector, you may consider different options. Listed below are some of the ideal commercial real estate investment options for you:
Bangalore has been recorded over 1/3rd of the transaction in case of office spaces in the top eight cities and around 7.5 million sq. ft. has been leased out according to the reports of a leading real estate platform until the second quarter of 2020. Bangalore is a top realty market among cities such as Mumbai, Pune, NCR, Chennai, Hyderabad, Kolkata, and Ahmedabad as it witnesses a yearly year-on-year growth of 8%.
The office spaces in Bangalore have been driven by IT companies as 42% of the office spaces demanded in Bangalore are by them. Then the demand scale for commercial office spaces is driven by the manufacturing industries as a demand of 25% has been recorded. The weighted rental average in these cities also remains stable on an annual basis.
Whitefield and ORR account for the largest number of commercial investments in Bangalore as it accounts for around 78% of Grade A stock in Bengaluru. With infrastructure projects such as the ORR metro line and other road improvements, the demand for office space is expected to increase further with the IT sector, Engineering & Manufacturing, and BFSI sectors. Commercial co-sharing places have been a great attraction and invite new occupiers such as Capito, InnerChef, Knowlarity, Monkey Box, Artifact Design, and many others.
Shops, malls, and showrooms offer one of the best yields at a rate of 10-14 %, thus making it harder for investors to decide. However, the success of malls and showrooms depends largely on the location in which it is situated, the design, anchor tenants, tenant mix, and mall management. While investing in malls, you must know that your builders and developers have adequate experience in mall management. The lower floors should lay a premium base for its upper floors and the catchment area is also very important. Any location which offers you a residential catchment of 4 Lakh people will be a good vicinity for investing in malls. Even in smaller towns, a good population can also earn you great returns and a stable income.
The retail industry of Bangalore is a great investment option as they appreciate it on a long-term basis. The revenue you earn from retails will always keep on increasing and keep in good pace with the inflation rates.
Bangalore is one of the major centers for retail investments as retail investors prefer cities that are growing at a faster pace, having high populations. The retail sector is also expected to grow rapidly. However, the challenges brought in by 2020 have stagnated the rental value of retail properties in Bangalore along with cities such as Delhi-NCR, Mumbai, Pune, Chennai, and Kolkata. Before the pandemic struck, the retail rental in Bangalore had an increase of 5-25% yearly and sometimes quarterly. Thus several initiatives have been taken to revive the retail market in Bangalore.
Best places to invest in commercial properties
Some of the ideal locations for commercial property investments include:
Various real estate reports by leading real estate consultancies have provided north Bangalore to be a top destination for commercial investments as it is witnessing an increasing number of Grade A developments. The strong demand drivers for this micro-market are the improved connectivity which is offered through ORR and proximity to the international airport. Some of the emerging locations in north Bangalore in terms of commercial investments include Hebbal and Bellary Road as the infrastructure and connectivity in these locations have improved largely in these locations. Apart from Hebbal, Hennur Road and Thanisandra Main Road have also shown developments in commercial investments in recent years.
Outer Ring Road
The Outer Ring Road is another major established commercial hub of Bangalore. It also offers a Grade space which is highly sought by the commercial occupiers. The fact that it offers superior connectivity makes it the ideal location for many companies especially those in the banking, finance, e-commerce, and insurance sectors. A real estate report has shown the office space absorption in ORR to be around 5.8 million sq. ft. annually against a total absorption of 8.7 million sq. ft. The office rental amounts also increase annually by around 8-10%.
Marathahalli is another area of south-eastern Bangalore which enjoys connectivity of superior quality with the rest of Bangalore through NH7, ORR, ITPL Road, and the Old Airport Road. Its well-developed infrastructure and connectivity have made it one of the most popular destinations for investments in the eyes of end-users and investors. Apart from commercial demand, Marathahalli also enjoys a huge demand for residential properties from those employed in the IT Hubs of Whitefield and Electronic city. Several commercial projects are coming up in these locations which offer a high return on investment as well.
Whitefield was an old quaint settlement years ago which has now evolved to be an ideal location for commercial as well as residential real estate investments. Thanks to several IT companies that opened up, Whitefield now is home to big brands and MNCs along with some of the best infrastructure and connectivity projects.
Whitefield can also be stated to be a place that is flooded with several IT companies and start-ups, which in turn attracts professionals in search of better employment opportunities. Some of the major commercial players of Whitefield include Oracle, IBM, and IGATE.
The technological boom in Whitefield is expected to continue shortly as well. This indicates that the property value of the Whitefield will increase further making it an ideal location for investors investing with the intention of high capital appreciation.
While taking your decisions to invest in the real estate sector, it is very important that you where to invest and in what type of property you want to invest. Earlier many preferred residential real estate property as it is less expensive when compared to commercial real estate properties. However, now people have started to realize the benefits attached to commercial real estate properties and have started to invest in them as well.
When investing in Indian commercial real estate, Bangalore is not an option that could be neglected as it is one of the fastest-growing cities in India offering a high level of capital appreciation and return on investments. Assetmonk is an online platform offering investment assistance in cities like Bangalore, Hyderabad, and Chennai. We list properties after carefully analyzing the market trends and conducting due diligence. Some of our best investment opportunities in Bangalore include CHB Series I and II. Visit our website for more details.
Commercial property investments in Bangalore FAQ's:
Some of the best locations to buy property in Bangalore includes Hebbal, Bellary Road, Hennur Road, and Thanisandra Main Road, ORR, Marathahalli, Whitefield, Electronic city, etc.
The North Bangalore regions such as Hebbal, Hennur Road, etc. are known to be the area in Bangalore which is developing at a faster pace. Several commercial giants also have their offices set up in northern Bangalore making it a hotspot for commercial investments.
Yes, it is profitable to invest in commercial real estate property in Bangalore as it offers a high return and better rental incomes as well. The value of the commercial properties appreciates on a much larger scale than residential properties as well.
Office spaces in Marathahalli and Whitefield are some of the best commercial investments in Bangalore. The office spaces are highly in demand by those working in IT as well as manufacturing industries. You can invest in them to earn better results.