Top destinations

Panathur-Varthur & Thanisandra set to see price appreciation of 61% & 55% respectively by 2020

Knight Frank India recently launched the second edition of its Residential Investment Advisory Report 2016 for the Bengaluru market. The report identifies the top investment destinations in the city for the next five years (till 2020) and also reviews the performance of the previously recommended destinations.

Key takeaways

* Thanisandra, in the north, is currently priced at Rs. 4,800 per sq. ft and is expected to touch an average price of Rs. 7,450 by 2020. This region has optimum employment opportunities, enhanced physical infrastructure and easy access to social infrastructure. It will also benefit from the upcoming metro rail node at Nagawara and the scheduled Peripheral Ring Road (PRR) project.

* Panathur-Varthur, located in the east, has a current average price of Rs. 4,350 per sq. ft and is expected to touch an average price of Rs. 7,000 by 2020. This belt enjoys proximity to two major employments hubs in the city – Whitefield and the ORR stretch; additionally, the upcoming connectivity of the metro rail at Kundanahalli and the PRR project will add sheen to it as a prime location with investment potential.

* Despite the presence of IT/ITeS companies, South Bengaluru, comprising areas such as Koramangala, Bannerghatta Road, and Sarjapur Road, will witness slackened price growth due to severe traffic congestion, a lack of substantial incremental employment opportunities and poor infrastructure development.

Impacting the price momentum

The industrial tag in the past and the launch of relatively higher-priced residential projects in select micro-markets presently are impacting the price momentum in West Bengaluru. While metro connectivity towards Mysore Road is expected to boost the region’s growth potential, it will require a larger quantum of incremental employment opportunities and social infrastructure before it can be considered an investment destination in the five-year horizon.

Top residential investment destinations

Says Samantak Das, ‘Since our first edition in 2012, Bengaluru’s residential market has remained resilient despite a slowdown in the country’s overall economic scenario. Our previous recommendations of Hebbal and K.R. Puram have witnessed price appreciation in the range of 67% and 33%, respectively, during the last three years, which was markedly higher than the price growth in the city. We recommend investors in these markets to hold on to their investments for two years more since the price appreciation will still be higher than the average price rise in the city. Going forward, we believe that incremental employment and upcoming infrastructure projects will give a substantial push to the residential markets of East and North Bengaluru. Considering this, we have identified new investment destinations, namely Thanisandra and the Panathur-Varthur belt, where we expect a price rise of 55% and 61%, respectively, by 2020.”

According to Satish B.N. of Knight Frank, “We have identified Thanisandra and Panathur-Varthur on the basis of their connectivity to employment hubs as well as enhanced social and physical infrastructure. Since both these locations are expected to witness incremental employment of over 80,000 pople, they will attract a significant population wanting to settle down nearby. Additionally, planned projects such as the metro and the Peripheral Ring Road will benefit both Varthur Road and Thanisandra, connecting them seamlessly to other parts of the city, thus making them potential destinations for residential investment.”