Corridor of growthCorridor Description and Rating

B A N N E R G H AT TA R O A D

Areas Included: Bannerghatta Road, Gottigere, Jigani, Hulimavu, Koppa, Begur, Begur-Koppa Road, Kalkere, Kothnur and JP Nagar 9th Phase

Fig 1: Map of the corridor

Corridor of growth (COG)02

Properties available in the corridor

The corridor offers a wide range of properties in price segments from affordable to premium. Although 40%

properties fall in the category of Rs 40-60 lakh, almost 44% properties in the corridor are in

the premium and luxury segments. This is due to the fact that most of the people buying property in this corridor are those who want to stay close to the CBD areas but want properties at more affordable prices than CBD prices. Fig 4

shows that 52% properties in the corridor are 2BHK units and 43% are 3BHK units. Most of the available supply in this corridor is catering to both these segments. Interestingly Fig 3 shows that 60% of the property in this corridor

About the Corridor

Bannerghatta Road, which extends from Jayadeva Hospital Circle to Bannerghatta National Park is located

in South Bengaluru. This is a completely residential corridor that has a lot of demand from residents looking to live close to Central Bengaluru. A linear corridor which stretches for a length of about 28-km and has localities on both sides of the Bannerghatta Road. It is close to some of the costliest residential areas in Bengaluru such as Jayanagar, JP Nagar and BTM Layout.

The corridor witnessed an influx of people wanting to reside here during the initial IT boom in the city. The area had a good talent pool as many engineering colleges are in and around this corridor and that led to concentration of IT firms here. Most of the big IT companies have had their first offices on this road and many of them continue to hold onto these smaller spaces even though they have large office spaces in other corridors of Bengaluru. Currently the corridor is in demand as it has a well-developed social infrastructure

and is close to work locations on Sarjapur Road, Hosur Road and Electronics City.

The corridor is well connected to rest of Bengaluru by the Bannerghatta Road which connects to the CBD. The NICE Road connects the corridor to Tumkur Road, Mysore Road, Kanakapura Road and Hosur Road. The corridor is strategically located between the Hosur Road on the east and Kanakapura Road on the west, thus, providing best access to both these roads for people living here.

The corridor has the widest range of properties available in terms of affordable plots as one moves towards Jigani and Koppa to high-end ultra-luxury apartments close to JP Nagar and Jayanagar near Bannerghatta Road.

Currently the road is not covered in the Namma Metro network, but the red line that will be added soon will connect Gottigere to Nagawara. This is a 21.25-km long line that passes through Bannerghatta Main Road all the way until the Jayadeva Hospital. The project has been delayed as there is some

realignment in process. The corridor is close to the existing green metro line which passes through Puttenahalli.

The corridor has equal supply of 2 and 3BHK formats and a supply which matches the demand. There are a few luxury villa projects as one moves towards Jigani but the demand is generally low for luxury villas. Luxury and ultra-premium 3 and 4BHK units have good demand at the start of the corridor close to the IT offices and near BTM Layout and JP Nagar.

Bannerghatta Road on the corridor has the highest traffic density during peak hours and since there is no other parallel road, this is a major bottleneck. Since most of the development was during the IT boom and was done hastily, the infrastructure has not kept pace and most approach roads are narrow and choked at many intersections. Although there are large forest areas towards the Bannerghatta National Park, the road is mostly devoid of green spaces in all other areas.

Overall Connectivity Social Infrastructure Security/Water

Fig 2: Distribution of properties by price Fig 3: Distribution of properties by delivery status Fig 4: Distribution of properties by bedroom configuration

Corridor of growth (COG)03

Within the corridor, the locality with the highest rental demand is on the Bannerghatta Main Road. Overall

this is the most sought-after destination with almost 70% demand for rental

accommodation. Rental yield shows the amount of rent that can be generated from a property in a year in terms of sale price. Bannerghatta Road Corridor has an average rental yield ranging from 3-4% in all localities.

From the graph, it is evident that properties closer to Begur, Hosur Road and Gottigere, which is nearby to NICE Road, command better rental yields.

is in the ready-to-move-in category. In fact, many developers would be ready to dispose the ready-to-move-in inventory at the earliest.

As explained above prices in the corridor move north as one moves towards the CBD. So an investor will get better value for money at areas beyond Gottigere where prices are much more affordable and developers are offering

good area for the money invested. So, typically Rs 40 lakh which will buy a 1BHK unit near the start of Bannerghatta Road will be able to buy a 2BHK unit closer to Jigani. As one moves south of Kalkere, it is observed that the floor area/built-up area of apartments is larger and there are 2BHK units with super built-up area of even 1600 sq ft.

Sales Price Covered Area ( Lacs) (Sq.ft)

1 BHK 12-48 515-1000

2 BHK 17-200 600-2760

3 BHK 24-350 900-4185

4BHK and Above 51-475 1815-5000

Best sectors to invest in a home Based on rental demand in sectors

Table 1: Sizes and prices of flats available for various room configurations

Based on home buying demand in sectors

Fig 5: Top 10 localities by consumer for renting a house

Fig 6: Top 10 localities by consumer for buying a house

Best bedroom configurations to buy Preferred buying and renting options

Buying Renting Total (BHKs) Total (BHKs)

1 BHK 3% 2%

2 BHK 48% 52%

3 BHK 47% 43%

4 and Above 2% 3%

Table 2: Demand distribution for buying and renting

In the case of demand for home buying, Bannerghatta Main Road has the highest share. The next highest demand is in Begur

Road which provides good connectivity to Electronics City. People working in this area

prefer to stay here as it is very close and also has an alternate link road to Electronics City. In Bannerghatta Main Road, 2BHK properties fetch good rental returns and have limited availability. The road also has better water

facility as compared to other corridors. Most parts of the road are serviced by BWSSB (Bangalore Water and Sewerage Supply Board) and in other areas the ground water level is not too below the ground level.

It is observed from the given tables that for rent 2BHK apartments are the most preferred, but from a buy perspective, both 2

and 3BHK units have the same demand in this corridor. About 48% of the people looking to buy and 52% looking to rent are considering 2BHK units. Moreover, the demand for rent in the 2BHK segment is more than 3BHK

category. About 61% of the consumers are interested in the 2BHK units for rent and the 3BHK demand distribution for rent is 34%. The demand for ultra-luxury apartments and villas above 4BHK is only about 2-3% for buying and renting. The home buyers are preferring to buy and rent in this corridor.

Price changes and future prospects Historic Price movement

6 monthly change Yearly change

3% 6%

Table 3: Historical Price changes

Bannerghatta Main road corridor has seen an average appreciation over the last one year. It is observed property prices have

been stable in the first half of 2015 and that prices have appreciated after the 2nd quarter mainly due to the launch of two large multi storey apartment projects by Tier 1 developers in the corridor.

Overall the corridor has seen a price rise of 6% over the last one year. The demand is mostly by employees in the IT/ITES companies working in the Electronic City corridor who prefer to live in and around this corridor which has good social infrastructure.

Fig 7: Historical Price changes of corridor

Corridor of growth (COG)04

Corridor Average Price Rs/sqft

Price movement for top localities by Consumer Preference

The last quarter has witnessed the prices moving up for three out of the top localities by consumer demand. Areas such as Hulimavu and Bannerghatta, which have significant consumer interest has seen

that the prices have increased by 3-6%. In Hulimavu the price change is mainly due to a new project launched here with about 900 units in the mid segment budget and in Bannerghatta which is close to the Koppa gate and Jigani, due to a constant demand for affordable plots approved under the Anekal planning authority.

Begur and Gottigere are other two areas where a large number of properties are ready for possession and lot of investor units are up for sale. This has dragged down the prices although there is still significant consumer demand in these localities.Fig 8: Price changes in top localities by consumer demand

Master Plan

It is observed that large tracts of the corridor are designated as primary residential areas. Both sides of Bannerghatta Road has areas

earmarked for commercial development due to which prices are high on this road. Beyond Gottigere, where the NICE corridor intersects the Bannerghatta Main Road, vast areas are marked for forest and a green belt region. There are no large areas earmaked for High tech or other industrial areas. Due to this the area has seen most of the initial IT/ITES companies that setup offices here, moving to other corridors such as Electronics City and Sarjapur Road. These have large SEZ and high tech industrial areas which provide better sops to companies than operating from independent office spaces.

Fig 9: Land use of various localities in the corridor

Corridor of growth (COG)05

Infrastructure Updates

IT, retail hubs drive growth on Bannerghatta Road

Bengaluru South witnessed the beginnings of the IT sector, with the first IT cluster at Electronics City. The Outer Ring Road (ORR) played a major role in making areas considered peripheral in early 2000 easily accessible for corporate to set up business. Bannerghatta Road, linked to the city centre through Hosur Road beginning at Vellara junction, is the main link to the IT hubs dotting the road from the Dairy Circle flyover. It also connects to Koramangala and BTM Layout, the key residential and retail belts. This has led to its turning into one of the earliest key routes of the city. This kind of development is driving growth of the area.

n Source: The Times of India

Metro rail will open up new areas

The Metro corridor has undoubtedly created a positive impact on the realty growth in its periphery. The presence of metro is making the area quite convenient to commute. The metro is well-connected to the new and upcoming areas, which is helping to attract home buyers. The impact of metro will be more visible only when the entire stretch is operational. The realty growth in these regions is witnessing more vertical development, mixed land use as well as integrated township developments. The Metro connectivity will add advantage to this connectivity from the railways and roadways.

n Source: The Times of India

Infrastructure push for Bannerghatta Road localities

The projects on the anvil to enhance connectivity will lead to more development in the vicinity. Bannerghatta Road, one of the busiest roads in the city, connects the core city areas to prominent locations

in the south such as Koramangala, JP Nagar, BTM Layout, and through NICE Road to other arterial roads and the peripheral locations. Infrastructure projects are being planned to boost development of the area. The government has invested money to widen Bannerghatta Road.

n Source: The Times of India

Affordable housing market grows in Bangalore

Infrastructure has been the most significant determinant of growth in the peripheral areas of the city. Good connectivity as well as allocation of land by the government for commercial and industrial growth led to development around 15 km away from the city centre. The next phase of development is now taking place 30 km and beyond with improvement of national highways, road widening projects and elevated expressways. It has led to the rise of the affordable housing market in the city.

n Source: Magicbricks Bureau

What makes Bannerghatta Road attractive for buyers

Bannerghatta Road has wide variety of residential offerings which support the extensive growth of the office space market. Efficient connectivity is set to fuel further growth in this belt. With its start at Hosur Main Road, Bannerghatta Road branches off and runs parallel to it. It is one of the first IT belts to develop into a flourishing catchment area with commercial, residential and social infrastructure retail, options in schooling and healthcare. Locations on Bannerghatta Road will benefit from a swift commute thanks to a new Metro line that will link Nagavara to Gottigere in Phase II.

n Source: Magicbricks Bureau

IN NEWS

Corridor of growth (COG)06

l As part of Metro Phase II, the Nagawara- Gottigere line will link metro to this corridor. The work on this stretch has slowed down as there is some realignment at the Jayadeva hospital junction.

l There is a plan to widen the existing four lane Bannerghatta road into a six lane road but the plan has been stalled many times due to protest from residents on both sides of this stretch.

l As part of the Cauvery phase IV plan the corridor has been connected by Cauvery pipeline in most of the areas until Gottigere and many houses and apartments have

already started to get water supply as well although a tad irregular.

A recent visit to the corridor has revealed that there is a lot of activity happening in terms of residential spaces coming up. But there is a general doubt in the investor if the infrastructure in the area will keep pace with all the development in the corridor. The corridor will witness the completion of almost close to 12000 units by the end of 2016 which are main multi storey buildings. This will put more strain on the already poor infrastructure and Bannerghatta main road will be the single point of roadblock and traffic jam. Currently

there are no alternate parallel roads and people will have bear with the traffic issues. Alternate modes of transport such as metro has been going very slow and with the latest plan to reallign the metro in order to avoid disturbing the Jayadeva hospital area has added more delays to the much awaited Nagawara-Gottigere line.

All these factors combined with the movement of the IT/ITES offices to much affordable areas such as North Bengaluru and Electronic City have further reduced the attractiveness of the corridor from investment perspective.

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D I S C L A I M E R

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