Bangalore absorbs 3rd of India's Commercial space (2011)

[Tolaha]

Bangalore gets a big bite of realty pie, absorbs 3rd of India's commercial space

Powered by strong demand from IT and related sectors, Bangalore is seeing a record absorption in commercial and residential segments amid a sharp fall in demand seen in key property markets such as Mumbai and the national capital region (NCR).

The Karnataka capital, classically called the City of Gardens and of late touted as an IT hub, has consumed a third of country's total absorption of commercial space at 11.7 million sq ft in 2011. This is 15 per cent higher than the space absorbed by the city in 2010, says a report released by Kotak Institutional Equities on Tuesday.


In comparison, NCR and Mumbai have absorbed commercial space of 6.2 million sq ft and 4.1 million sq ft respectively in 2011. NCR has seen an increase of 8 per cent over 2010 and Mumbai has seen a decline of 6 per cent.

The record office absorption has also fuelled similar levels of demand in residential properties. Bangalore has seen an absorption of 49 million sq ft of residential properties in 2011, which was more than any Indian city, according to Kotak Institutional Equities.

Though it sounds good to hear, what is critically needed is to move some of this deluge to second tier cities like Mysore, Mangalore, Hubli-Dharwad and Belgaum. State governments have been trying to convince investors from quite some time. But the Brand Bangalore has been so powerful, that even though investments have been moving to 2nd tier cities, it just hasnt done any visible difference into Bangalore's investment climate. This is the case of the brand being too strong, for its own good!

Even though state government has been emphasizing second tier cities in its Investor meets, at the cost of Bangalore, more needs to be done in terms of infrastructure building. Declaration of "Industrial clusters" has been done, needed is more action on the ground.

 

[Mad Indian]

Why not! Bangalore is the IT CAPITAL of our country and called as the Silicon valley of our country!!!

 

[Tolaha]

Why not! Bangalore is the IT CAPITAL of our country and called as the Silicon valley of our country!!!

Well... yes, Bangalore is known as the IT capital. Surprising part is that Bangalore has been absorbing more commercial space than Mumbai and NCR combined!

But the point that I was trying to put across was a little different.

Even though Bangalore attracting companies from world over is a good thing, the glaring issue with it has been that the infrastructure has in no ways kept up with the kind of growth being experienced. Meaning, while there is a huge amount of commercial space being created, equivalent number of roads/water supplies/flyovers/metros etc are not getting created.

It is easy to blame the government for the mess. A number of infrastructure projects - the Metro, road widening, creation of signal-free corridors - which are being done now are probably too little too late. But maybe its not fair to blame the government completely as nobody could have dreamt of the kind of growth that this city could have seen.

While its obvious that Bangalore needs mega investments in infrastructure to handle the explosive growth, there is a certain limit of infrastructure creation that can take place in a city within a certain time. Also, there isnt much water that can be supplied to Bangalore from Kaveri either, thanks to our friendly neighbours! So looking at these factors, the state government has been trying from many years to direct some of these incoming investments to other cities. While these initiatives have been partially successful, they have not been good enough to meet the goal of reducing the growth of commercial activity in Bangalore, at a more sustainable level.