For a decade now, commercial real estate has emerged as India’s new most desirable investment market. Among India’s major cities, Bengaluru stands out as a growth hub. Its thriving IT sector and strongly performing economy-backed fabulous infrastructure have led to a rise in commercial real estate in Bengaluru.

This article explores the reasons for this boom and why more investors and businesses are getting focused on this sector.

The IT Boom and Its Aftermath

Bengaluru was called the “Silicon Valley of India” because of the intense development during the last two decades of the IT industry of this city. This has been seen by bringing multinationals, startups, and technology giants into the business, mainly in Bengaluru. The demand for office space increased as the economy focused on technology-driven businesses. As more companies establish their operations in the city, demand for commercial real estate in Bengaluru continues to grow. The technology parks and business hubs in Whitefield, Electronic City, and Outer Ring Road also form the prime locations for such offices.

Along with boosting the demand for offices, the IT boom has diversified into other sectors like hospitality, retail, and coworking. As companies grow, they seek to add office space for their people, which adds to the need in the commercial real estate market.

Startup Ecosystem

Bengaluru has often been considered the startup capital of India. Many reasons bring this about, but the thriving startup ecosystem of the city has directly boomed commercial real estate in Bengaluru. Entrepreneurs can rely on excellent talent, a great government, and an innovative culture to set up their businesses in Bengaluru.

Yet another aspect, the proliferation of coworking spaces among startups, may owe to its flexibility and affordability for growth. Most startups, freelancers, and even large companies favour the flexibility coworking spaces offer, providing room to scale up or down according to the fluctuations of a business; indeed, it has become highly appealing in Bengaluru’s fast-growing ecosystem. Coworking spaces are thus contributing significantly toward the growth of commercial real estate in the city.

Checkout this article on Bengaluru’s ecosystem enabling startups to build and grow!

Infrastructure Development

Infrastructure development in Bengaluru has improved. Developing roads, metro lines, and flyovers have eased travelling between various places and made commuting far easier. What was once a distance far from the city centre is now conveniently connected; for example, Devanahalli and Hebbal.

All these infrastructure developments have opened up other areas for commercial real estate development. With increasing connectivity, business must now be sited in central business districts. They are extending out from the city outskirts where they can find ample office space, commercially very affordable. This development is one of the reasons why commercial real estate in Bengaluru is witnessing this boom.

Availability of Talent

Bengaluru also attracts talents from the other end of the country and even from outside the country. The city’s prevalence of world-class educational institutions, research centres, and training programs has attracted a massive group of elite professionals. Businesses line up in Bengaluru to establish their offices because they can immediately access this talent pool.

This steady inflow of talent also leads to the expansion of businesses, which further boosts the demand for commercial real estate. As companies grow, they need to expand their space to house a growing workforce, thereby giving a push to commercial property as well.

High Return on Investment

In Bengaluru, the return on investment for commercial real estate has been quite attractive for investors. As the city runs fast, coupled with the fact that it’s at the top in the world of IT developments, the property values appreciate steadily in this place. More often, commercial property gives higher rental yields than residential property.

On top of that, leasing office spaces with multinational companies, startups, and coworking operators is a source of stable cash flow. Long-term leases with stable tenants provide security and profitability to investors; hence, commercial real estate seems an attractive investment in the emerging market.

Government Initiatives

In this light, the Karnataka government, as well as the city authorities of Bengaluru, have been quite enthusiastic about creating an atmosphere that is conducive for entrepreneurs as well as real estate. The undertakings through the Karnataka Startup Policy and the Bengaluru Master Plan have allowed businesses to shop more quickly in the city.

In addition, the government has de-gazetted many regulations and gone for the de-congestion of approvals required for real estate projects. This avoids the typical bureaucratic delays characterising the development process and thus becomes easy for developers and investors.

The above policies have witnessed a vital role in boosting commercial real estate in Bengaluru.

Suggested read: Bengaluru Growth Story and the Role of Government Policies

Rise of Mixed-Use Developments

Another trend that fuels the boom in commercial real estate in Bengaluru is mixed-use projects. Mixed-use mega-projects contain not only all kinds of residential units but also where office spaces, retail, and recreational facilities exist within the same mega-project. As more professionals move into the city for work, such projects will be in demand.

People desire to live around their places of work to reduce traveling and make it easy for themselves. A mixed-use development would provide its residents with office space, apartments, shopping centres, and entertainment venues. Businesses love these projects, as they ensure continuous foot traffic flows and create an all-in-one environment for their employees.

Sustainability and Green Buildings

More environmentally friendly buildings are now being seen in Bengaluru. More companies are using this office space to minimize their carbon footprint, which meets the green building norms. Developers are also responding to this by constructing energy-efficient buildings having rainwater harvesting, solar power, and a proper waste management system.

In addition to helping companies meet sustainability goals, green buildings save operational costs in the long run. That is another reason commercial real estate in Bengaluru is undoubtedly in such huge demand.

Also read: How Managed Office Solutions Are Reducing Carbon Footprints?

Implications of Remote Work

The COVID-19 pandemic created many changes in the working fabric and environment. Companies adopted the work-from-home arrangement, and in this process, there has been some repute that attains the importance of flexible and adaptive office spaces, allowing employees to continue working from remote places. As most companies have already returned to work, they have taken up more hybrid models of remote and work from office both.

It has increased the demand for flexible office spaces and coworking hubs, especially in Bengaluru, where the tech industry thrives. Businesses want spaces with a changing and shifting nature, causing the increase of commercial real estate in the city.

Future Outlook

There is a future for commercial real estate in Bengaluru as the city is expected to continue attracting new businesses and talent. Hectares of commercial offices will be in demand. Also, since government and infrastructure projects are already in progress, more areas will open for commercial development.

It will grow even further due to its sectors of investors and businesses. North Bengaluru is specifically in hot demand for its proximity to the airport and other significant developments. This city’s commercial real estate market will surge over time due to its resilience, innovation, and adaptability.

Suggested read: Best Commercial Real Estate Opportunities – How to determine?

Bengaluru’s commercial real estate scenario is booming with factors like booming IT, a thriving ecosystem of startups, developed infrastructure, and government support. Business houses keep moving to the city, so the demand for office spaces, coworking hubs, and mixed-use would see a further rise. Opportunities would continue to line up for investors, developers, and companies alike through Bengaluru’s commercial real estate. With solid growth prospects, good returns, and an ideal business atmosphere, it is no wonder that Bengaluru has emerged as a significant hub of investment attraction for commercial property.

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