This story is part of
Spotlight — Karnataka
SHOW MORE 132 STORIES

Metro drives property boom in Bengaluru
Premium

With Central Business Districts and traditionally popular areas mostly saturated for homeowners, new real estate hotspots are emerging in the city, with metro connectivity being the big deciding factor

January 26, 2024 07:00 am | Updated 04:52 pm IST


The Purple Line of Bengaluru’s metro network connecting the western parts of the city with the IT corridor on the eastern side.

The Purple Line of Bengaluru’s metro network connecting the western parts of the city with the IT corridor on the eastern side. | Photo Credit: K. MURALI KUMAR

For Rushank D., a marketing employee of a firm in Whitefield in east Bengaluru, proximity to the city’s metro rail stations was an important criterion while looking for a house to buy.

“Driving every day is a nightmare. Buses are unreliable and usually crowded during peak travel hours. The metro is the only good option as it has a fixed schedule and is dependable. I also did not want to depend on an additional platform (bike, cycle, auto or cab) for last-mile connectivity. So, living close to a metro station was my best bet,” he said. He is ready to move into his new house, which is a walking distance from Krantivira Sangolli Rayanna Railway Station metro station.

Also read | Bengaluru’s Namma Metro: A leap in connectivity, but challenges remain

In a city that is often infamous for being traffic-choked, the expanding metro network is making commuting easy. Namma Metro is now turning out to be a significant deciding factor in the real estate space in Bengaluru. Players in the sector say with traditionally popular areas and the Central Business District (CBD) mostly saturated and with the metro reaching new corners of the city, new real estate hotspots are emerging.

Metro train passing through the IT corridor in Whitefield in east Bengaluru.

Metro train passing through the IT corridor in Whitefield in east Bengaluru. | Photo Credit: K. MURALI KUMAR

‘Walk to work’

Digbijay Das, Director, Valuation Services, Colliers India, said real estate development — both commercial as well as residential — is expected to be concentrated along metro lines.

“The Gottigere to Nagawara, Silk Board-K.R. Pura, and K.R. Pura to international airport lines are under various stages of construction and will be commissioned in the coming years. The concepts of ‘Walk to work’ as well as ‘Transit Oriented Development’ will become a reality. Real estate development activity is witnessing traction in the stretch from the city centre towards the international airport in the north of the city. Thereby, a new micro market is in the making. Ease of commute is expected to become a reality once all metro lines are operational,” he said.

While acknowledging that core residential pockets, such as Indiranagar and Jayanagar, have become saturated over the years, these two locations are very well-connected by road as well as metro rail, he pointed out. “Travel time has shrunk due to metro connectivity. Therefore, buyers have the option to stay close to hubs like Jayanagar and Indiranagar at locations that are 10 to 20 minutes away,” he added.

Improved accessibility

Akhil Gupta, co-founder and chief product and technology officer, NoBroker.com, said the development of the metro project not only enhances public transport infrastructure but also boosts the overall development of the area.

“With offices opening up and the influx of people in the areas around IT hubs, the demand for properties near offices and metro lines has significantly increased. The convenience of improved accessibility has become a significant draw for both end users and investors, resulting in a surge in property prices for both buying and selling transactions. As a result, not only have property prices experienced an upward trajectory, but rental values in these areas have also seen a notable increase,” he explained.

Prominent names in the industry acknowledge the trend. Pavitra Shankar, managing director, Brigade Enterprises Limited, said, “Properties along the new metro lines, especially around stations, have experienced a significant price increase. This is evident in Kanakapura, Whitefield, and Yeshwantpur. The demand for properties in north Bengaluru, particularly towards Devanahalli, is rising. The upcoming metro extension to the airport is expected to boost further real estate prices and demand in the surrounding areas,” she added.

The Green Line on Kanakapura Road in the south of Bengaluru.

The Green Line on Kanakapura Road in the south of Bengaluru. | Photo Credit: Bhagya Prakash K.

New residential areas

Traditionally, expensive and sought-after areas like Indiranagar and Jayanagar continue to experience demand, but the growing connectivity and infrastructure developments towards the outskirts of Bengaluru have shifted homebuyers’ perceptions.

“While residents in Indiranagar and Jayanagar tend to stay, the limited amenities from standalone developments are prompting exploration of alternatives in the greater east and south. The appeal lies in mixed-use developments in these areas, offering better amenities as an alternative option,” she explained.

Murali Malayappan, CMD, Shriram Properties, concurred that the introduction of the metro has significantly boosted the demand for real estate. “This is evident not only in Bengaluru but also in major cities like Mumbai and Chennai, which historically had extensive rail networks. The initiation of the Namma Metro has been instrumental in filling the void left by older forms of transport, particularly trains, in facilitating efficient road connectivity,” he said.

The cost of preference

The preferences comes at a cost though. Bengaluru has recorded the highest rental inflation of 24% in 2023, according to NoBroker.com, a property listing platform. According to the firm, 26% of people are looking for properties that are in close proximity to public transport.

“The metro connectivity has made it possible for tenants to look for properties a little far away from IT parks and offices. The rent in such areas has not appreciated at the same pace as those near office complexes and IT hubs. This option allows tenants to save time in commuting to the office and in rental costs, which in turn contributes to an enhanced quality of living. Areas such as Varthur, Electronics City Phase 1, Haralur, Chikkanahalli, and Whitefield have witnessed a rise in demand for rental properties,” Gupra said.

Suresh Hari, Secretary, Confederation of Real Estate Developers’ Associations of India (CREDAI), Karnataka, pointed out that with increased infrastructure, prices in peripheral areas have increased, and this trend will continue. “There is a positive effect of the metro project to a great extent in terms of mobility, access, facilities and growth. But there is an abnormal escalation of land cost, which translates into increases in cost to customers,” he added.

Pavitra said, “While prime CBD areas, like Rajajinagar, Malleshwaram, Koramangala, and Indiranagar, continue to be the most expensive for both residential and commercial properties in Bengaluru, there is a steady rise in property values in north and east Bengaluru. In fact, the prices across Bengaluru have risen and are well accepted in the market, reflecting an improved buying capacity among investors and homebuyers.”

Impact of airport metro line

Explaining further about the impact of the metro on real estate prices, she said, “The recent introduction of the metro line to Whitefield and Yeshwantpur, and beyond, has significantly increased the market value of properties in those areas, attracting more interest from potential homebuyers. Connectivity from Mysuru Road to Whitefield via the metro has improved pricing along West Bengaluru corridors. The airport metro line has led to a surge in demand for residential and commercial properties in north Bengaluru, particularly in plotted developments and Grade A office spaces. That part of the city is already well-supported with social infrastructure. Additionally, there’s a growing demand for larger spaces, mixed-use developments, and the luxury segment, with the supply expanding to meet these evolving needs.”

Digbijay said while central areas of Bengaluru, comprising Lavelle Road, Palace Cross Road, Cunningham Road, Ulsoor Road, Richmond Road, and Sankey Road, continue to be the most expensive residential pockets, with the average cost upwards of ₹15,000 per sq.ft., other established residential pockets, such as Indiranagar, Whitefield, Sarjapura Road, HSR Layout, Jayanagar, and J.P. Nagar, are also witnessing premium projects, though the supply is limited.

Office space rentals

“In commercial office parlance, the Central Business District — comprising M.G. Road, Richmond Road, Infantry Road, Cunningham Road, Sankey Road, Palace Road, and Vittal Mallya Road, as well as the Secondary Business Districts (SBD) of Koramangala, C.V. Raman Nagar, Inner Ring Road, Indiranagar, Old Airport Road, Old Madras Road — is the most expensive. While office space rentals in CBD range between ₹150 and ₹250 per sq.ft./month, rentals in SBD range between ₹100 and ₹175 per sq.ft./month. On the Outer Ring Road, where the density of commercial office occupiers is the highest, rentals range between ₹95 and ₹120 per sq.ft./month,” he said.

Akhil added that though areas like Indiranagar, Jayanagar, Malleswaram and the centre of the city continue to be expensive due to their “sound infrastructure and prime accessibility”, the city’s dynamic growth has given rise to new areas in the real estate market. Localities such as Koramangala and HSR Layout have seen a remarkable surge in property value in recent years and have become comparable to the older areas.

“Furthermore, the eastern and south-eastern stretches of Bengaluru, including pockets of Whitefield, Bellandur, and Sarjapur Road, have emerged as new hotspots for both residential and commercial development. These areas are drawing considerable attention from investors and homebuyers, owing to their proximity to tech parks, social amenities, and a thriving community,” he said.

Future trends in Bengaluru

The real estate sector expects Bengaluru to witness a surge in demand and costs in the future. As Akhil pointed out, the real estate market in Bengaluru, which was under-indexed in pricing — as in more affordable — when compared to Delhi NCR, Mumbai, and Hyderabad, is now inching to similar levels.

“As per our recent survey, Bengaluru came across as the topmost destination for NRI investment. We expect the city to continue to experience price escalation in the real estate market due to the increasing demand for properties fuelled by the city’s growing job opportunities, economic growth, and a steady influx of professionals and families seeking homes. Simultaneously, there is a notable scarcity of ready-to-move-in (RTMI) properties, further intensifying the price appreciation,” he said.

Murali from Shriram Properties said the regions poised for substantial growth include east, north, northeast, and south Bengaluru. “Over the next five years, we anticipate a transformation where many individual homes in Indiranagar and Jayanagar will evolve into apartment complexes, resulting in increased property prices that may become unaffordable, fostering a prevalent apartment culture,” he added.

“Anticipating more traffic jams in the next two years, there is potential for the development of satellite towns, offering residents an alternative to travel within their specific regions. We suggest that the government capitalise on these opportunities by establishing satellite centres, contributing significantly to the overall improvement and sustainable development of the city,” he said.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.