‘Bangaluru’ today is more than a geographical identity. “Back in the 90’s and the early 2000’s Bangalore was known more as much for its climate and defense and engineering antecedents as it was for being a retiree’s paradise. Over the last 15 years as outsourcing and BPOs became house hold words, Bangalore became a brand, first to be admired, and then envied and an investment destination for businesses and property.
The BPO industry ‘wave’ created the Knowledge Industry. It also resulted in a young, affluent, cosmopolitan society, which was leisure focused. Secondly, the 2000’s saw a wave of entrepreneurs– in IT / ITES / Life-sciences and Retail. The “Have idea, and online presence, will build and sell” – wave attracted entrepreneurs. Bangalore also emerged as a “test market” / launch market for retail and lifestyle concepts (e.g. micro-breweries) – and for international brands, who wanted market reaction from a cosmopolitan audience without making large investments.
Bangalore is not land-locked (as with Mumbai) and hence the city has been consistently growing. Urban planning did not keep pace – though three ring roads and a few flyovers were created. Each wave of expansion created ‘mini townships’ – self-sufficient suburbs with commercial and residential spaces – E.g. Whitefield, Bannerghatta road, Sarjapur road. When the city expanded, each ‘mini-township’ included both residential and commercial spaces. However, these expansive waves did not always provide for retail space or for social infrastructure such as public schools and hospitals. More than 80% of schools and hospitals in Bangalore are privately owned / managed.
The leisure focus of the Bangalore workforce meant the creation of ‘second homes’ on the outskirts – often around a golf course or around some agricultural land, a ‘farm’ away from home. This was another factor leading to the outward expansion of the city; aided by the new airport which opened in 2008 – 45 kms from the center of the city.
Another factor driving investments has been the historical link with the NRI community. The first ‘migration’ wave outwards in the 1970’s was Bangalore centric – as technical specialists from its engineering schools, studied and then settled down in the States. This provided a captive audience with the ability and willingness to invest when, in the 1990’s real estate developers started converting the ‘township’ thought process into high–end gated communities – from White field to Sarjapur to Bannerghatta – these gated communities provided a way to stay ‘rooted’ for the NRI community; and act as a natural floor to any recessionary tendency in the property investment market. They also provide an easy bridge for expat workers to live in India, insulated within a slice of “suburban California”.
Compared to the other metros, Bangalore remains India’s most livable city. However, the pressures of the slow pace of infrastructure development and the inevitable clash between cosmopolitan immigrants and its local population are starting to tell. Petty crime has increased; infrastructure projects such as the Phase 2 of the Metro and various flyovers have been delayed.
One final significant factor. The recent redrawing of electoral lists has meant that Bangalore Metropolitan area accounts for about 25% of Karnataka’s legislature. These structural changes should increase focus on infrastructure – as greater political will manifests itself, once the 2014 electoral equations are clear. Some of this is visible – phase 2 of the metro has picked up, the NICE road has been commissioned. The investment case for Bangalore has proven its mettle in the 2008 – 2012 recession – residential yields have been steady, and have been driven by the increased number of ‘hubs’ and mini suburbs getting created. Bangalore has also started to witness ‘iconic’ properties – triplex villas near the KGA golf course in IndraNagar and Mantri’s “South India’s Tallest residential tower” @ 55 floors – at Bannerghatta. It only remains for growth plans to get a bit more structured and include retail spaces and social infrastructure as part of the whole – in order to create a long range vision for the city to be truly India’s most livable – the “Melbourne of South Asia.”
“An abridged version of this article appeared in the Property Times on 31/10/2013 – you can find that link here”