Bangalore Office Market Snapshot 2013

Rental & Capital Values

Rentals in CBD and Electronic City remained stable. In the preferred office destinations, Outer Ring Road, Whitefield and Bannerghatta Road rental values appreciated by 6 - 10 percent on Y-o-Y basis. Going forward, rental values in the EPIP Zone, Whitefield and ORR are expected to witness an increase due to consistent occupier’s interest especially from the IT/ITeS industry.

2014 Prognosis

It is anticipated that the annual transaction volumes in 2014 will be similar to 2013, albeit the second half of the year is expected to be stronger than the first half, as market activity after the general elections is expected to improve and be better than now. Development completions will continue to be below average as developers shall refrain from adding more speculative supply until the overall market improves. There is however a significant number of under construction projects in Whitefield, Outer Ring Road and towards the north Bengaluru. Overall, the prospects for office rentals increasing significantly are unlikely, barring micro-markets such as Outer Ring Road and CBD which are expected to witness modest rental increases in 2014. This could be due to a scarcity of quality office space. Rental values may be under a downward pressure in peripheral micro-markets like Electronic City and Whitefield due to higher supply ratio as compared to other micro-markets.

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