BM Property: Bengaluru’s driving growth in real estate

Bengaluru continues to dominate India’s office real estate sector, reflecting the city’s robust economic confidence and position as a leading IT hub. Office market transactions in India rose by 18% in Q3 2024 compared to Q3 2023, with Bengaluru contributing significantly to this growth. The completion of new office spaces in key cities, including Bengaluru, has further bolstered the commercial real estate market. According to the Real Estate Sentiment Index, developed by Knight Frank India and the National Real Estate Development Council (NAREDCO), the sentiment remains optimistic in Q3, despite global economic challenges. The findings show a balanced outlook, with stakeholders expressing confidence in the residential and office segments driven by steady demand and favorable market conditions.

Current sentiment score dip

The Current Sentiment Score for Q3 2024 saw a slight moderation, dipping from 65 in Q2 to 64. This reflects cautious optimism among stakeholders, influenced by prevailing global uncertainties such as geopolitical tensions and fluctuating economic conditions. However, the Future Sentiment Score improved from 65 to 67, signaling growing confidence for the upcoming six months. This optimism is driven by factors like anticipated festive season demand, easing inflationary pressures, and an expected boost in capital inflows.

Bengaluru is at core
The South Zone, with Bengaluru at its core, demonstrated a positive sentiment, with the score rising from 65 in Q2 2024 to 66 in Q3 2024. This improvement highlights stable residential demand and favourable trends in IT hubs such as Bengaluru. The city’s vibrant real estate market, bolstered by ongoing infrastructure projects and robust leasing activity, continues to play a pivotal role in driving the South Zone’s performance and instilling confidence among stakeholders, according to the report.

Steady recalibration

The report stated that Bengaluru’s residential real estate market is undergoing a phase of steady recalibration as developers adapt to evolving market dynamics. The focus remains firmly on mid-to-premium segments, which continue to experience consistent demand. Stakeholders express confidence in the city’s end-user-driven market, with 40% anticipating sales growth and 28% expecting stability in the coming months. Pricing trends also reflect optimism, as most stakeholders foresee a rise in residential prices, driven by robust demand and limited inventory in prime locations. Developers are strategically balancing new project launches with effective inventory management to sustain this momentum.

Robust growth

The city’s commercial real estate sector also showcases resilience and robust growth, bolstered by the continued expansion of tech and consulting firms. Bengaluru’s status as a thriving business hub, coupled with ongoing infrastructure enhancements, reinforces confidence among stakeholders. Despite global economic uncertainties, the outlook for Bengaluru’s commercial real estate remains strong, underpinned by steady leasing activity and long-term growth potential. The report stated that a robust 76% of stakeholders predict increased office leasing, up from 63% in Q2 2024.