Bangalore Property Values

Residential Property Values (Rs. Per sq. ft.)

Location	Oct 2008	Jan 2008	Oct 2005
South	5,000-9,000	4,500-7,000	2,900-5,200
South East	3,000-5,000	2,500-3,100	1,500-2,500
South West	3,000-4,500	2,800-4,000	1,200-2,500
East	2,800-3,900	2,500-2,800	1,200-1,800
North	2,700-3,800	2,500-3,000	1,200-1,800
North West	4,200-6,000	4,000-5,000	2,500-3,500
Central I	6,000-8,400	6,000-8,000	3,500-5,500
Central II	3,900-6,000	3,000-4,500	2,000-3,500

You can see that properties prices have increased by over 100%-150% in the last 3 years depending upon the location. The highest increase has been in South Bangalore due to excess demand by IT professionals residing in these areas. In the last few month land prices have started falling though the fall is not as high as it is for apartments. Developers may not openly admit it but once you are on the negotiating table they are willing to reduce prices. Table above reflects only the prices which developers are quoting openly. Be rest assure that actual prices are around 10-15% below those numbers. Land prices may not come down significantly because of acute shortage of prime properties. This proves the fact that India is a land of opportunities- without any land! Bangalore has an abysmal average FSI of 1.6 which has led to poor development of residential properties across the city. Hence, most of the prime land have single or double storey building or houses. In coming few weeks, you may see significant drop in property prices even from big developers like Sobha, Brigade and DLF, who till now have resisted price reduction.

Retail Property Rental Values (Rs. Per sq. ft. per month)

Location	Oct 2008	Jan 2008	Oct 2005
Koramangala	375-450	400-500	200-225
M.G.Road	175-250	200-250	100-150
Brigade Road	300-380	320-360	150-200
Cunningham Road	180-225	200-250	100-150
Commercial Street	200-250	175-225	100-150
Vittal Mallya Road	300-350	350-400	150-225
Indiranagar	200-250	250-300	100-150

Good news for retailers! Rental prices have decreased due to a mix of excess supply and lower demand. I believe this is the best time for retailers to engage in long term contract with developers at a lower rate. The developers, who are facing huge financial problem, would be more than happy to do so. Expect another series of price correction soon.

Commercial Property Rental Values (Rs. Per sq. ft. per month)

Location	Oct 2008	Jan 2008	Oct 2005
CBD	80-85	70-75	30-35
Suburbs	50-55	45-50	25-30
Peripheral Whitefielf	35-50	40-50	20-25
Peripheral E-City	25-30	25-30	12-15
Outer Ring Road	45-50	40-45	20-25

IT firms consumes over 80% of commercial/office spaces in Bangalore. With the economic slowdown across the world, IT sector has taken a severe beating. Businesses are down and so is the demand for office space. There may not be much addition of commercial space in Bangalore in the next 6-12 months due to global slowdown. Our research shows a drop in demand by over 60%. Realty firms may not undertake new projects in the coming months especially on Outer Ring road where there is already an excess supply of properties.

For the above table, I categorized different zones such as East and South based on following locations.
• South Bangalore includes Kormangala, Jakasandra
• South East Bangalore includes Sarjapur Road, Outer Ring Road, HSR Layout
• South West Bangalore includes Jayanagar, JP Nagar, Kanakpura Road, Bannerghatta Road, BTM Layout
• East Bangalore includes Marathhalli, Whitefiled, Airport Road
• North Bangalore includes Hebbal, Bellary Road, Yelahanka, Dodballapur Road
• North West Bangalore includes Malleshwaram, Rajajinagar
• Central I Bangalore includes Brunton Road, Artillery Road, Ali Askar Road, Cunningham Road
• Central II Bangalore includes Frazer Town, Benson Town, Richards Town, Dollars Colony, Indiranagar
• Suburbs includes Kormangala, Indiranagar, CV Raman Nagar

Sources
ABN Amro Research Reports
Cushman & Wakefield
Deutsche Bank Research Reports