A new report from real estate consultancy firm — JLL India, has said Bangalore is fast emerging as a top-ranking luxury homes market. The report, authored by Om Ahuja, CEO, Residential Services, JLL, said few cities can match Bangalore’s real estate power.
The Garden City of India has long since progressed from being the country’s most preferred retirement destination to becoming its Information Technology capital — a city of entrepreneurs and the nouveau riche.
“In all respects, Bangalore is an extremely vibrant city with highly-favourable demographics. The average age of the city’s population has dropped dramatically from 60+ to 30+ in two decades, and the average earning power of this population is arguably the highest of the more-established cities of India. As a result, Bangalore’s real estate market dynamics are also unique when it comes to financial clout and corresponding lifestyle preferences,” Ahuja said.
A major factor driving real estate consumption in Bangalore is the consistency of job creation, which surpasses all other Indian cities. In the last one decade, even after a serious slowdown in national and international economic growth, Bangalore has been consistent in generating the highest number of jobs for engineers and management graduates among all cities of India. It is a growing city both in terms of geographical expansion and in providing livelihood to the educated young Indians; yet it has still not lost its lifestyle attractiveness quotient.
“Bangalore is resplendent with areas that can be defined as ‘posh’, both in terms of cultural richness and density of wealth. Residents of Vittal Mallya Road, Richmond Road, Ulsoor Road, Sadashivnagar and the by-lanes of Cunningham Road have always cherished the experience of living in independent houses. While these houses are now giving way to apartment buildings, these locations still retain their profiling as addresses that announce status and prestige,” Ahuja noted.
Indiranagar and Koramangala are the preferred destinations of first-generation rich entrepreneurs who value an evolved lifestyle that does not require them to compromise on space. Bangalore’s elite continue to prefer these locations as against moving into newer areas which offer comparable lifestyle quotients, but lack the charm they are accustomed to.
“The current rates for residential properties on Vittal Mallya Road range from Rs 27,000-30,000 per sq ft and go as high as Rs 42,000-45,000 per sq ft in locations like Richmond Road, and Rs 29,000-30,000 per sq ft on Sankey Road,” JLL added.
Considering the limited supply, both now and in the foreseeable future, these are extremely high premium locations with no supply overhang whatsoever. As a result, the capital appreciation potential is considerable. While luxury apartment costs ranging between Rs 6 crore and Rs 30 crore may seem exorbitant, they are in fact very reasonable compared to the going rates in premium locations of established cities like Delhi and Mumbai.
The space and lifestyle that the luxury projects in these areas offer is against a backdrop of charm and grandeur lacking in most other cities. A luxury apartment in Indiranagar and Koramangala is still an attainable reality with prices ranging from Rs 9,000-12,000 per sq ft. No other premium locations of other major Indian cities offer such prices in the luxury segment.
Bangalore’s newer luxury home destinations evolved primarily in the areas close to Satya Sai Ashram and the International Tech Park (ITPL), or Whitefield. Established developers like Adarsh, Chaitanya, Prestige and Total Environment built lavish villas in this area which offers the serenity and space that Bangalore’s wealthy look for in luxury homes.
The price tags for most of these villas range from Rs 3 crore to upwards of Rs 30 crore. Examining the per-square-foot rate in the light of these figures is not a realistic way of benchmarking the pricing as it is difficult to put a price to the benefits of dedicated land and the open spaces available in these developments. Nevertheless, the actual figure often comes in at less than Rs 10,000 per sq ft.
“Reasonable prices for luxury homes in posh localities reflect a long-standing market reality in Bangalore it has always been driven largely by genuine end users,” Ahuja noted.
This is not to say Bangalore is entirely devoid of investor activity. “We see a lot of it reflected in the prices escalations in North Bangalore, specifically in areas like Hebbal and Yelahanka where the action is high. However, considering the predominantly healthy market characteristics and the superior offerings involved, these areas and their adjacent locations are still reasonably priced, offer a generous lifestyle and rank very high in capital value appreciation,” JLL said.