1 Research & Forecast Report | April 2015 | Colliers
International
Momentum continues with over 2.3 million sq ft of office
absorptionIt was another solid performance for the Bengaluru office
market in 1Q 2015, with office absorption totalling 2.31 million sq
ft. Apart from this, about 1.74 million sq ft of office space was
pre-committed for build to suit by MNCs like Amazon, Wells Fargo,
Arista Networks and WSP Consultants. IT / ITeS commanded the
absorption with about 69% (1.6 million sq ft), followed by BFSI
sector 14% and Retail 6%. SBD locations, such as Bannerghatta Road,
Koramangala, Malleswaram, Yamalur, J P Nagar and Outer Ring Road -
Marathahalli to KR Puram, saw maximum traction with about 1.4
million sq ft office absorption, trailed by PBD locations like
Whitefield, Hosur Road and Outer Ring Road - KR Puram to Hebbal,
where more than 0.45 million sq ft was leased during the
quarter.
Bengaluru recorded new supply of over 2.1 million sq ft in 1Q
2015, 23% higher than that of the previous quarter. Projects
constituting this supply were Purva Gainz by Purvankara Projects
and Prestige Trinity Center by Prestige Group both located at Hosur
Road, Divyasree Technopolis - Block by Divyasree at Yamalur, Global
Village SEZ by Tanglin Group at Mysore Road and Pritech - Block 14
by Primal Group at ORR Marathahalli Sarjapur Road. The total
available stock for fit-outs was approximately 11 million sq ft.
EPIP Zone / Whitefield accounted for 39% of the total stock,
followed by Outer Ring Road (24%) and Electronic City (18%).
City Office Barometer
Research & Forecast Report
Bengaluru | OfficeApril 2015
Rental Values
*Indicative Grade A rents in INR per SF per month**Northern part
of ORR - KR Puram till Hebbal
MICRO MARKETS RENTALVALUE*% CHANGE
QoQ YoY
CBD 90 - 130 0% 16%Outer Ring Road (Marathalli - Sarjapur)
55 - 63 0% 7%
Outer Ring Road (North)**
53 - 60 0% 0%
Bannerghatta Road 50 - 60 0% 0%
EPIP Zone/ Whitefield
28 - 36 0% 0%
Hosur Road 25 - 40 0% 8%
Electronic City 26 - 33 0% 7%
INDICATORS 1Q 2015 2Q 2015 F
Vacancy
Absorption
Construction
Rental Value
Capital Value
2 Research & Forecast Report | April 2015 | Colliers
International
Th e quarter witnessed many new project launches during the
quarter, such as Embassy Tech Village, HVP Crest, Mantri Agara
Project, Vaishnavi Project and Primal Park (RGA Tech Park) Blocks 3
and 4. All these projects are expected to add more than 4 million
sq ft of Grade A offi ce space between 201617 in the citys
inventory.
Rental values were remained stable across Bengaluru, however
capital values posted an average rise of 2% QoQ across the city,
except CBD, Hosur Road and Bannerghatta Road where capital values
were remained stable.
In one of the major real estate transactions, Brigade Group and
GIC Singapore jointly bought Hindustan Unilever Ltd. (HUL)s prime
26 acres of land located in Whitefi eld to develop an IT Special
Economic Zone. Th e property is located in a prime location with
connectivity to two IT hubs, namely, Whitefi eld and Outer Ring
Road.
Colliers View
Overall, the Bengaluru offi ce market is in the sweet spot in
terms of supply-and-demand fundamentals. About 2 million sq ft of
offi ce space is expected to witness completion next quarter, out
of which about 0.2 million sq ft is already committed. Th is steady
increase in development activity and greater domestic and foreign
investor interest in offi ce market should result in additional
occupancy and rent growth. Select micro markets located along Outer
Ring Road (Marthalli - Sarjapur) and EPIP Zone / Whitefi eld will
continue to remain preferred micro markets among occupiers due to
their strategic locations.
Top 5 Transactions of the Quarter
Key Under Construction Projects
CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE
Amazon Constellation Business Park 500,000 Outer Ring Road
Lease
Misys World Technology Centre 150,000 Outer Ring Road Lease
Nokia Karle Town Centre 131,640 Outer Ring Road Lease
Epsilon Karle Town Centre 131,640 Outer Ring Road Lease
GCC Services India Pvt Ltd World Technology Centre 131,211 Outer
Ring Road Lease
BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION
Maple Tree - 1 Phase Adamas Builder 900,000 Outer Ring Road
2015
Bagmane Constellation Business Park - Virgo Block
Bagmane Developers 800,000 Outer Ring Road 2015
RGA Tech Park Primal Realty 800,000 Sarjapur Road 2015
Quarter Wise Absorption
Average Rental And Capital Value Trend
8,000
10,000
12,000
6,000
4,000
2,000
0
70
60
50
40
30
10
20
0
2
1
3
4
5
6
7
0
1Q 2
013
2Q 2
013
3Q 2
013
4Q 2
013
1Q 2
014
2Q 2
014
3Q 2
014
4Q 2
014
1Q 2
015
Mill
ion
Sq.
ftRe
ntal
Val
ues
INR
Per
Sq
Ft P
er M
onth
Capi
tal V
alue
s IN
R P
er S
q.ft
Notes:
1. Offi ce Market: Prime offi ce properties in Bengaluru can be
divided into three principal sub-market CBD/O CBD (MG Road, Millers
Road, Vittal Mallya Road etc.) the SBD
(Banerghatta Road & Outer Ring Road (ORR)) and PBD (Hosur
Road, EPIP Zone, Electronic City and Whitefi eld).
2. Rents/Capital Value: Market average of indicative asking
price for Grade A offi ce space.
3. Available Supply: Total Grade A offi ce space being marketed
for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable
scenario; as compared to previous quarter.
5. All the fi gures in the report is based on market information
as on 25th March 2015.
Forecast
1Q 2
008
1Q 2
009
1Q 2
010
1Q 2
011
1Q 2
012
1Q 2
013
1Q 2
014
1Q 2
015
1Q 2
016F
1Q 2
017F
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