Schneider

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Bangalore's commercial realty stock may rise

November 2012

Industry watchers expect Bangalore's commercial real estate stock (Grade A occupied and vacant office space) to rise to 100 million square feet by 2016-17.

In 2009-'10, the city had commercial real estate stock of approximately 50 million square feet. With the presence of leading IT companies in the city, Bangalore has become India's 'Silicon Valley'. The tremendous growth of the IT or ITES Industry has revolutionized the residential real estate and retail markets.

Residential units being one of the most favoured traditional investment options, a rise in income could mean an investment in second homes for many households. The growing urban aspirational middle class enabled by increasing disposable income and coupled with the opening up of FDI will revolutionize the retail sector's growth in Bangalore.

The availability of high quality, large office spaces at sub-dollar rental levels (providing lower operational costs), access to a large skilled workforce, the growth of the retail and residential markets and Bangalore's cosmopolitan culture have worked in the city's favour, making it a preferred destination.

Reports suggest that the city's residential property market has been resilient, with capital values having increased by 25 percent since the trough in mid-2009.