East vs North - Office Market in Bangalore

East Bangalore continues to be the most preferred office market in the city for expansion and consolidation; gradual increase in demand for North Bangalore

East Bangalore comprising of Outer Ring Road (KR Puram to Iblur), Sarjapura Road, Varthur and Whitefield micro-locations has emerged as prime office destination and accounts for 47% of the commercial office stock in the city. Most of the IT/ITES companies in Bangalore have large office set-ups in East Bangalore and prefer the location for expansion and consolidation.

Post commencement of Kempegowda International Airport in Devanahalli, micro-locations of Hebbal, Bellary Road, Yelahanka, Devanahalli and Thanisandra in North Bangalore are witnessing major activity in the commercial office space segment. There has been a significant (125%) growth in the office space absorption during 2013-2016 in North Bangalore and correspondingly, huge supply is lined up in these locations.

IT/ITES companies are also consolidating their operations in Built-to-Suit campuses in the city. Currently, 5.4 million sqft of Built-to-Suit campuses are under-construction in Outer Ring Road and 0.8 million sqft of captive campus in North Bangalore.

Upcoming supply in North Bangalore is primarily concentrated along Bellary Road stretch (Hebbal-Yelahanka). There are land banks of all prominent commercial office space developers in North Bangalore. In addition to the planned supply of 29.9 million sqft in North Bangalore, 315 acres of land is banked for future commercial development. East Bangalore has 238 acres of land banks concentrated in Whitefield micro-location.

Currently, the rentals in North Bangalore are at par with East Bangalore.

North Bangalore:

  • Hebbal Outer Ring Road & Bellary Road (Hebbal-Yelahanka): INR 60-70 per sqft/month
  • Bellary Road (Yelahanka-Devanahalli) & Thanisandra Road: INR 40-50 per sqft/month.

East Bangalore:

  • Outer Ring Road (KR Puram to Iblur): INR 60-78 per sqft/month
  • Sarjapur Road: INR 55-65 per sqft/month
  • Whitefield: INR 37-45 per sqft/month.

High occupier preference for East Bangalore over North Bangalore due to matured residential, social and business infrastructure

Talent Pool, Social Infrastructure, Quality & Type of Development, Rentals, Business Facilitators and Connectivity/ Accessibility are key determining factors for occupiers in selecting a location for setting up of an office.

Gradual increase in office demand in North Bangalore over the next few years with improvement in residential, social and business infrastructure; office market share expected to increase from current level of 11% to 21% by 2022

East Bangalore will continue to remain as the preferred office destination; however, due to lesser under-construction & planned stock, the supply options will saturate in 5-7 years time assuming annual absorption continues to average at 5 million sqft in the micro-locations.

North Bangalore will witness a major improvement in residential, social and business infrastructure by 2022.

  • Residential market size will increase from the current stock of 26,000 units to 70,000 units by 2020
  • Social infrastructure will improve as 2 major malls will become operational by 2019
  • 3 major hospitality projects are also expected by 2022.

Post 2022, most of the planned projects in the location will witness completion leading to an increase in the share of office stock from the current level of 11% to 21% thereby facilitating a gradual increase in demand for North Bangalore.

About the Author

Shwetha Pai

Shwetha Pai

Shwetha has more than 12 years of experience in Real Estate Research & Consultancy. She has advised over 25 clients across various research and consultancy assignments across tier I, II and III cities in India. Prior to joining Meraqi she has worked for Vestian Global and UGL Equis. Shwetha holds a B.Arch degree from Bangalore University and Post Graduate Degree in Urban Planning ,SPA, New Delhi.

Related Research Reports

The “Why, How & What” of
Professionally Managed Student
Accommodation (“PMSA”) in India

16 Dec 2020

The purpose of this article to establish the need WHY, available operating models HOW, features WHAT of Professionally Managed Student Accommodation (PMSA). It also covers the current status of Student Housing (during the COVID period); and a suggested way ahead (post COVID-19) for PMSA.

Brief - Build-To-Rent (BTR)

23 Oct 2020

This paper defines the path for the emergence of a new format of residential development in India. In this article we examine the potential and the viability of private residential rental developments, their attractiveness to investors and their feasible as a development concept. We also include some guiding principles that can be readily applied.

Uncertainty, Caution, Hopefulness - REView Report, September 2020

24 Sep 2020

The outbreak of Coronavirus ‘COVID-19’ brought the global economy at its lowest and it impacted the Indian economic activity too. The real estate sector in India witnessed a major contraction in demand levels in H1 2020. Office space absorption declined by 38% compared to H1 2019 while Residential Sales, by 59%. Remote workings intensified and Business Continuity Plans were triggered. Residential buyers also put their purchase plans on hold in view of the market uncertainties, credit crunch and job concerns. Co-living sector recorded invocation of force majeure clause, rental alterations, lowering of profit margins as well as closure of properties. Warehousing demand was high from the E-commerce sector.