Research &

Forecast Report
Bengaluru | Office
January 2015

Bengaluru steals
the show with over
13.77 million sq ft
of absorption
The city tops the chart with about 49% share in the pan India
absorption in 2014. Robust leasing activities, especially
from the IT / ITeS sector with about 73% of the citys total
absorption, backed up the overall absorption, resulting in
an enormous growth from 8.65 million sq ft in 2013 to 13.77
million sq ft in 2014. Over and above this, approximately,
4.38 million sq ft of office space has been pre-committed
in various IT parks that are under construction. Outer Ring
Road outshined other micro-markets as the most preferred
micromarket with more than 51% of the total absorption,
followed by Whitefield 20% and the CBD 6%.
The market has benefitted from both the increased
demand from the IT/ITeS sector and the booming
Indian e-commerce sector. The most significant deals in
2014 include the 3.8 million sq ft office space taken by
e-commerce giant Flipkart, which alone contributed about
25% in the citys total absorption. Moreover, existing tenants
such as KPMG, IBM, L&T and Cap Gemini leased large
office spaces to accommodate their growing operations.
Private equity players also showed equal interest in this
market. The market witnessed one of the largest JV deals
between Black Stone Group and Embassy Group amounting
to INR 1,951 crores for Vrindavan Tech Village spread over
106 acres.

City Office Barometer

INDICATORS

2015

Vacancy
Absorption
Construction
Rental Value
Capital Value

Rental Values
MICRO MARKETS

RENTAL
VALUE*

% CHANGE
QoQ
YoY

CBD

90 - 130

16%

22%

55 - 63

4%

7%

53 - 60

8%

28%

Bannerghatta Road

50 - 60

0%

0%

EPIP Zone/
Whitefield

28 - 36

0%

0%

Hosur Road

25 - 40

0%

8%

Electronic City

26 - 33

0%

5%

Outer Ring Road

(Marathalli Sarjapur)
Outer Ring Road
(North)**

*Indicative Grade A rents in INR per sq ft per month

**Northern part of ORR - KR Puram till Hebbal

Strong absorption was complemented by robust new supply

of approximately 7.17 million sq ft. About 9.1 million sq ft
of supply was available for lease in the market in 4Q 2014,
of which about 70% was equally distributed in EPIP Zone
Whitefield and ORR. The remaining 30% of the supply

2014

Research & Forecast Report | January 2015 | Colliers International

New Supply, Absorption And Vacancy Trends

Despite robust absorption, rents increased marginally on

the average by 3.5% YoY across all micromarkets, barring
locations like Bannerghatta and EPIP Zone/Whitefield
where rents remained stable. Capital values also recorded
an increase of 6% YoY across micro markets.

15%

10

10%

5%

2010

2011

2012

2013

New Supply (In Mln sqft)

2014

2015F

2016F

Absorption(In Mln sqft)

Vacancy(In %)

Forecast

60

10,000

50

8,000

40

6,000

30

4,000

20

2,000
2016

2015

2014

2013

2012

2011

10
0

12,000

CLIENT

BUILDING NAME

AREA (SF)

LOCATION

LEASE / SALE

Flipkart

Embassy Tech Village

3,500,000

Outer Ring Road

Lease

KPMG

RMZ Eco World

800,000

Outer Ring Road

Lease

VolvoIndia Pvt. Ltd.

RMZ Eco World

800,000

Outer Ring Road

Sale

L&T

RMZ Eco World

500,000

Outer Ring Road

Lease

WIPRO

Divyasree Technopark

500,000

Whitefield

Lease

AREA (SF)

LOCATION

POSSESSION

900,000

Outer Ring Road

2015

Bagmane Constellation Business

Bagmane Developers
Park - Virgo Block

800,000

Outer Ring Road

2015

RGA Tech Park

800,000

Sarjapur Road

2015

Key Under Construction Projects

DEVELOPER

Maple Tree - 1 Phase

Adamas Builder

Primal Realty

Source: Colliers International

Notes:
1. Office Market: Prime office properties in Bengaluru can be divided into three principal sub-market-CBD/Off CBD (MG Road, Millers Road, Vittal Mallya Road etc.) the SBD
(Banerghatta Road & Outer Ring Road (ORR)) and PBD (Hosur Road, EPIP Zone, Electronic City and Whitefield).
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the figures in the report is based on market information as on 25th December 2014.

Research & Forecast Report | January 2015 | Colliers International

Capital Values INR Per sq ft

70

Top 5 Transactions of 2014

BUILDING NAME

0%

Average Rental And Capital Value Trend

2010

A number of big RFPs floating in the market will keep

absorption momentum ongoing in 2015. Moreover,
companies like Honeywell and Goldman Sacs plan to set up
their campuses in Bangalore. Vacancy is expected to remain
stable if developers continue to deliver under-construction
projects as per the expected delivery dates. Rents may rise
marginally in the ORRMarathalliSarjapur stretch due to
limited vacant stock while other locations will have stable
rental scenarios.

15

2009

Trends to watch for in 2015:

20%

Rental Values INR Per sq ft Per Month

The state government of Karnataka also played an active

role this year to support the real estate momentum by
approving the execution of Phase 2 of the Namma Metro,
which will connect Byappanahalli to IPTL-Whitefield
and Mysore Road terminal to Kengeri. An elevated road
project costing INR1,200 crores will be constructed from
Basaveshwara Circle to Hebbel to facilitate a hassle-free
drive to Kempegowda International Airport (KIA).

20

2008

was shared by CBD, Electronic City, Hosur Road and

Bannerghatta Road. Supply demand equilibrium helped to
keep the vacancy levels stable for the Grade A office market.
The city has a robust new supply pipeline of approximately
33 million sq ft in the next 3 to 5 years, which will further
keep the vacancy levels in check in the coming years.

Primary Authors:

485
63 countries on
6 continents
United States: 146
Canada: 44
Latin America: 25
186
EMEA: 84

$2.1

billion in
annual revenue

1.46

billion square feet

under management

15,800

professionals

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