by THO
In a bid to capitalize on the booming demand for home ownership amongst upper middle-class and rich Indians, several real estate developers have recently concluded a flurry of land deals in Bengaluru. However, despite a slew of projects set to be launched in the near-future, sectoral experts do not foresee a moderation in housing prices in the market.
“If you compare prices in the same quality of housing across metros like MMR and NCR, Bengaluru still commands amongst the lowest. So, there is room for further growth,” explained Pramod Bisht, CEO, South Zone, Godrej Properties. He estimated a 7-10% property price appreciation in the key micro markets of East, North and South-east Bengaluru. They include popular areas such as Whitefield, Sarjapur Road, Hebbal, Thanisandra and Bellandur, among others.
Godrej Properties on July 1, 2024, announced the acquisition of a 7-acre land parcel in North Bengaluru’s Thanisandra area to build a high-end residential project. The proposed project is estimated to have a developable potential of around 9 lakh square feet with an estimated revenue potential of about ₹1,200 crore.
“Godrej Properties has a robust launch pipeline for FY25, which includes several new project launches planned in Bengaluru,” the company said in a statement earlier this month.
As per data sourced from property consultancy Anarock, Bengaluru recorded six land deals, spanning over 102 acres, in the January-March period of 2024. Of these, five deals have been proposed for residential development while one is intended for a township project.
Other developers in the fray
Homegrown brand Puravankara Ltd acquired a 7.26-acre land parcel in the Hebbagodi suburb of South Bengaluru’s Electronics City to develop a luxury housing project, the company said in a statement on July 2. The high-end housing project will include a saleable area of around 7.5 lakh square feet, with a potential gross development value of over ₹900 crore.
“The reason why we are doing it is because of increased volumes of sales. We are replenishing our land banks, and the idea is not just to replenish but to grow as well at the same time,” said Abhishek Kapoor, Executive Director and Group CEO, Puravankara Ltd, adding that because of consolidation, it is going at a faster pace than the industry and therefore one will see more land acquisitions by the organized branded players. Kapoor projected an average 8-9% increase in property prices in coming times.
Also Read: Puravankara acquires 7-acre land parcel in Bengaluru to develop housing project worth ₹900 crore
Other real estate players who have purchased land parcels in the city of late include Brigade Enterprises and Concorde.
In a joint development undertaking, Brigade Group is set to develop an 8-acre residential project in the city’s western corner, on Tumkur Road, the company announced on July 3. The project will encompass a total development area of about 1.2 million square feet with an estimated gross development value (GDV) of around ₹1,100 crore.
“These new launches by the grade A developers are expected to command higher capital values as compared to the existing values,” said Anshuman Magazine, Chairman and CEO – India, South East Asia, Middle East and Africa, CBRE. Multiple factors such as proximity to IT hubs, superior built quality, premium facilities and amenities, are expected to contribute to this increase in capital values, he added.
In an announcement late last month, Bengaluru-focused developer Concorde said that it has purchased a 1.6-acre land parcel on the city’s Sarjapur Road to construct a premium high rise residential complex. The joint development project will have a gross development value of ₹200 crore.
Also Read: Brigade Group to develop 8-acre housing project worth ₹1,100 crore in Bengaluru
“This land buying spree is largely because housing demand is significantly high even today,” said Anuj Puri, Chairman, ANAROCK Group. In the last few years, there has been at least 30-40% jump in land prices across major cities including Bengaluru, he added.
As per the consultant, average residential prices for apartments in Bengaluru grew 32% year-on-year in the April-June period of 2024, to ₹7,800 per square feet from ₹5,900 per square feet in Q2 2023. Compared to the first quarter of calendar year 2024, prices saw an 8% jump in the June quarter.
“This clearly indicates that as long as sales remain buoyant, residential prices may continue to see a rise. And add to this, developers have bought land at steep prices, hence they may increase home prices,” Puri explained.
Will Bengaluru’s creaking infra pose a challenge?
However, road infrastructure or traffic congestion and water scarcity are major problems in the IT capital today. If these issues are not resolved soon, it may deter prospective homebuyers from infusing their hard-earned savings into this market, experts said.
