It has been over a year since Gourab Patra, founder of an ad-tech startup in Bengaluru, moved to HSR Layout in the IT capital.
“I moved to Bangalore for its brilliant ecosystem to grow as a tech entrepreneur. But, I was surprised that renting an apartment as a startup founder is challenging,” he added.
He said landlords in Bengaluru reviewed his LinkedIn account and company revenue numbers before rejecting him—despite having built a startup with a decent turnover. Today, “I have found a decent landlord who will let me stay for two years,” he said.
Like Patra, several bootstrapped startup founders who moved to Bengaluru said buying or renting a home in prime areas like Koramangala, Indiranagar, and HSR Layout is more challenging than building a startup in the IT capital.
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Startup founders prefer prime areas such as Koramangala, Indiranagar and HSR Layout
Most founders who moved to Bengaluru with aspirations of venturing into their entrepreneurial journey choose to stay in prime areas like Koramangala, Indiranagar, and HSR Layout in the city centre and Whitefield in the east.
Real estate brokers say most startup owners look to stay in these prime areas where rentals are no less than ₹1.5 lakh per month for a 3BHK, and the cost of buying an apartment is around ₹3-4 crore.
“We recently closed two such deals for startup founders, where one of them bought a 3BHK apartment in prime Koramangala for ₹2.5 crore. Another was in an upmarket apartment complex in north Bengaluru where apartments cost around ₹5 crore,” Sunil Singh, director of Realty Corps said.
Priyanka Kwatra, an advocate who practices at the Karnataka High Court and runs a legal services start-up, said, “I live in Koramangala 4th block, and rentals in my society can go over ₹65,000 per month for a 2BHK. ” Kwatra lives a stone’s throw away from Billionare’s Street in Bengaluru, where every startup founder wants to find their ‘address’.
However, not everyone can afford a luxury apartment. “I have encountered several people who are unable to sustain such high real estate prices, especially when starting their venture,” Kwatra said.
“There have been many instances where the startup founders came to us with a budget of ₹1.5 crore to buy a house in Koramangala. However, they had to consider options in other areas as currently a 3BHK listing starts from ₹2.5-3 crore and upwards,” Singh added.
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Startup founders look for independent bungalows
Kiran Kumar, vice president of Hanu Reddy Realty, said that most landlords in Bengaluru do not allow bootstrapped startups to work from their apartments.
This has led to founders seeking independent houses where they can set up their workspace and then move into smaller commercial spaces when they have enough funds.
An independent house in the prime areas typically starts from ₹2 crore and upwards. These are 4BHKs with a carpet area between 1500 and 1800 sq ft. “We recently closed a rental deal where a startup founder rented a 3BHK in Koramangala for ₹1.9 lakh monthly rent. While this was beyond their budget of ₹1.5 lakh, the landlord agreed after going through their profile and with the help of some references they provided,” Singh said.
Commercial rents are on the rise. For many, a co-working space is an option
It has been over two years since Kwatra ventured to establish her law firm, Kwatra and Associates. “As a lawyer, when I started, I saw small places commercial places — big enough to fit two chairs renting out for ₹35,000 per month — made me wonder if I should put in all my savings to get an office. That’s why I decided to use a co-working space,” Kwatra said.
However, she said several other entrepreneurs in the city work out of coffee shops and cannot fund their own offices in the IT capital.
Rentals for smaller office spaces, about 400-600 sq ft, have shot up by at least 10-20% over the last year. Close to high streets like MG Road, rental costs are between ₹1 lakh and ₹5 lakh per month, depending on the office space size.
“However, there are spaces with rentals between ₹40,000-50,000 per month close to areas like MG Road, Church Street, and Residency Road or areas in the central business district. But, these are typically older buildings with smaller spaces, however suitable for a startup just venturing out,” Singh added.