The micro market of North Bengaluru is budding as an upcoming office destination, with potential to be the third most preferred location in Bengaluru for occupiers over the next five years, on the heels of ORR and Whitefield.

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By Century Real Estate March 16, 2019

The micro market of North Bengaluru is budding as an upcoming office destination, with potential to be the third most preferred location in Bengaluru for occupiers over the next five years, on the heels of ORR and Whitefield.

According to recent research by Colliers International India, new supply of Grade A office space in the micro market of North Bengaluru is expected to see 140% rise by 2021 to 5.7 million sq ft from 4.7 million sq ft now. While, the micro market of Whitefield is expected to witness a robust supply pipeline of around 10 million sq ft, the equivalent of 26.0% of citywide Grade A supply.

Grade A buildings in the area around Hebbal Junction are also expected to continue to be in demand due to their proximity to the CBD and ORR while the area around Yelahanka and further north will likely need better social infrastructure and residential density to attract sustained occupier demand.

Over the past three years, North Bengaluru has captured the attention of various sectors. For example, in 2018 the technology sector accounted for 54.0% of total leasing in the North. Banking, financial services and insurance (BFSI) companies represented 11.0% of leasing volume, engineering companies leased 8.0% of space and flexible workspace operators accounted for 7.5% of gross leasing. Some of the leading occupiers in 2018 were PwC, ABB Global, TATA AIA, Regus and Cerner.

An upward trend in rentals, and low vacancy rates in micromarkets of ORR, CBD and SBD, is likely to see demand spill-over to Whitefield and North Bengaluru. Over the last four years (2014-2018), Bengaluru has witnessed average annual gross office leasing of 13.9 million sq ft, with the ORR micromarket accounting for 45.0% of total leasing volume. The SBD and CBD micromarkets follow with 13.0% and 9.0% respectively.

The demand for Grade A office space is also expected to increase by 1.0% compounded annually over 2019-2021 to 14.5 million sq ft.

Source: ETRealty

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