The shift in the choices of commercial and residential buyers has substantially influenced the real estate market in Bangalore. From smart homes, co-living spaces to shared work culture, various trends are anticipated to shape the city’s real estate market in 2019-20.
The ever-increasing millennial workforce of Bangalore has significantly influenced the city’s real estate market. While the IT professionals working in reputed multinationals and scouting for globally inspired lifestyles have driven the residential market in the city, the commercial real estate has been steered by the budding entrepreneurs. According to a NASSCOM report, 2018, Bangalore is one of the fastest growing technology start-up hubs in India with nearly 7,700 registered start-up firms. Of this, approximately 1,200 new start-ups were registered in 2018 alone. As a whole, various trends have outlined the city’s real estate market. Some of the key developments include:
Smart homes have emerged as one of the front-runners when it comes to key realty trends in Bangalore. The IT hub of India has always been one of the early adopters of technology in the residential segment. In fact, Bangalore is one of the largest markets for smart homes in the country. The extensive presence of white-collar populace, sizeable High Networth Individuals (HNIs) and expat communities have massively fueled the demand for smart homes in the city.
According to Ashish Purvankara, Managing Director, Puravankara Ltd., “Today, people are obsessed with technology, so much so that they prefer to be surrounded by it even in their homes. Homebuyers are keen on hassle-free experiences in their day-to-day lives. Thus, Bangalore real estate developers have come up with numerous residential projects which incorporate home automation features and ensure a contemporary, convenient and secured home environment for the residents.”
Increase in shared office spaces
In the recent past, the city has earned a new tag for itself – the ‘start-up hub of India’. Bangalore is the only Indian city that has been featured in the ‘Top 30 Global Start-up Ecosystem’ since its home to approximately 7,700 educational and financial technology companies. The soaring entrepreneurship trend in the city has pushed the demand for shared office space segment.
“Co-working spaces come with several benefits ranging from comparatively lower cost, better infrastructure to a flexible work environment. Therefore, collaborative spaces have seen considerable traction in the commercial segment. Besides, they have also boosted the average leasing values in the city,” avers Purvankara.
Extended lease terms
Across the city, many tenants have opted for lease term extensions and longer lock-in durations, thanks to the expanding commercial segment. Earlier, companies used to lease offices only for nine years, but with increased business opportunities, they have extended their lease terms to 12-15 years. The extension not only secures the occupancy right of the tenant but also minimises the impact of surging lease values. Generally, lease extension is not accompanied by a considerable hike in the rental costs, therefore, tenants remain benefitted.
Backed by the enormous latent demand and the need for innovation, the affordable housing segment has established a strong foothold in the Indian realty market, especially in Bangalore. Futuristic designs and technology fusion has fueled the demand for optimally crafted affordable houses, mainly, amid the first-time homebuyers. Besides, a part of this segment’s success can also be attributed to the implementation of Real Estate (Regulation and Development) Act (RERA), 2016, and the various tax sops provided by the government.
The co-living concept is the new norm in the city. Majority of the young working professionals and student migrants prefer co-living set-ups since they offer a deluge of amenities under one place over other residential choices. Apart from residential flexibility, co-living also renders a range of other benefits as well, such as lower rental values, peer collaboration, and minimal maintenance hassles. Although, co-living is still at a nascent stage, and it is expected to capture the interest of homebuyers in the near term.
While the macro-economic factors severely affected Bangalore’s real estate growth in the past couple of years, the sentiment is expected to change in 2019. With new trends shaping up the city’s real estate market, it goes to show that the environment is conducive and investors are keen on exploring different opportunities.