Bengaluru, Hyderabad Strengthened By Office Space Take-Up

Real estate follows jobs and jobs follow people. In this cycle, active cities that boast manpower and resources get to decide how attractive their investment prospects are. For example, Bengaluru and Hyderabad have been the leading office space absorbers in 2016 with information technology (IT) and business process management (BPM) soaking up the biggest spaces. Data show net absorption in Bengaluru is the highest in the past nine years.

Let's see how it determines the residential market:

Outer Ring Road and Whitefield

With almost 54 per cent of the entire absorption concentrated in these localities, we see a preference for residential settlements along the Outer Ring Road (ORR) and Whitefield. Localities such as Bellandur, Banaswadi, Doddanekundi, Kalyan Nagar, Mahadevapura along with Whitefield have registered healthy capital appreciation over the last 40 months, according to report. There are over 500 ready-to-move-in properties in the area and 20 new launches are expected. A little over 50 projects are under-construction. This makes ORR a go-to residential destination.

Also read: Commercial Market Pushes Housing Investment Prospects In Hyderabad

Investors, too, have had a good time. PropTiger DataLabs research shows that average selling price in this region stood close to Rs 4,600 per sq ft in April, 2013. By December 2016, prices have climbed up and on an average, stands at Rs 5,500 per sq ft. While the exact location of the property, the size of the house, brand of the developer and amenities would matter, from an investor's point of view, despite the slump, the value of property has not deteriorated even if the gains haven't been sizeable. You can still afford a 2BHK unit for an average budget of Rs 60 lakh and a 3BHK unit that will be priced anywhere up to Rs 95 lakh.

In Whitefield, ITPL, Sai Baba Ashram, Brookefield, Ramagondanahalli and Whitefield Hope Farm are the sub-markets . Research says that an investor's best bet would be Brookefield where returns are the highest at 29 per cent followed by Whitefield Hope Farm at 20 per cent over the last 45 months.

On an average, the entire micro-market is priced at an average of Rs 4,900 per sq ft. However, prices in Brookefield are on an average close to Rs 6,300 per sq ft. In ITPL, it is Rs 5,500 per sq ft. 2BHK units in the Whitefield micro-market will be close to Rs 50 lakh and 3BHK units are priced close to Rs 91 lakh. If you are looking at plotted development, secure a budget of up to Rs 35 lakh. Given that real estate is not moving fast, developers are keen on offering customised packages and discounts to woo takers. There is no doubt that this becomes a good time to buy given that even the jobs market is capturing more space in the vicinity. 12.7 million sq ft of office space has been absorbed.  

Hyderabad- catching up fast

Hyderabad, not yet the numero uno but is definitely in the making with 6.3 million square feet absorption. With some of the corporate giants entering the commercial market, while residential sales might have remained guarded, buyers' positive sentiments are not hidden.  Despite a very long crisis period clouded by political turmoil, brand Hyderabad has emerged in a new way with localities such as Madhapur recording a high supply of office space as well as absorption.

Due to price advantage, most residential localities in Hyderabad will suit those looking at affordable homes. However, home sales were high in Manikonda, Kukatpally, Nanakramguda, Kokapet and Kondapur. Over 40 projects are under-construction in Manikonda alone and about 100 projects ready for possession.

Also read: The Right Time To Buy Is Now!