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Bengaluru: Global slowdown in the information technology (IT) and IT-enabled services(ITeS) has now told on Bengaluru’s realty sector.
The city, which has been topping the absorption of commercial space, saw a 28 per cent decline in office space leasing in the July-September quarter, according to a report tabled on Monday by the property consultancy firm, Vestian.
Remarkably, new supply in the city plummeted 25 per cent to 2.7 million square feet, during the period.
Bengaluru has effectively debunked the otherwise robust trend seen with the top seven markets reporting the highest ever quarterly absorption since the Covid-19 pandemic.
Overall office space leasing in the quarter ended September 2023 rose 21 per cent year-on-year, across the seven major cities of Bengaluru, Hyderabad, Chennai, Mumbai, Pune, Delhi-NCR and Kolkata. New office space supply also, increased 26 per cent annually to 13.4 million square feet during the period under review.
The sector also reported healthy vacancy levels with an appreciation in average rentals, Vestian chief executive Shrinivas Rao said. “This showcases the robust fundamentals of the sector and a healthy demand for quality office spaces in India,” he added.
With 15.9 million square feet in total absorption across the seven markets, Hyderabad led the trend, increasing its share in the overall pie to 23 per cent during the period, as against 8% in Q2FY23.
Strikingly, though Bengaluru saw its share falling to 23 per cent, from 38 per cent in the corresponding period last year, the city accounted for the second highest absorption area during the period at 3.6 million square feet.
Vestian expects office demand in Bengaluru to improve with IT conglomerates calling employees back to office. Sudhir Pai, chief executive of property portal Magicbricks agreed. He listed a slowdown in hiring and campus recruitment by IT companies as the top reason. But he sees this as a temporary blip in Bengaluru’s office market.
The southern markets of Bengaluru, Hyderabad and Chennai cumulatively contributed 58 per cent of total office leasing and 70 per cent to new supply during Q2 of FY24.
Delhi NCR also reflected a dim performance during the period with a 14 per cent y-o-y decline in leasing, at 3 million square feet.
Despite a marginal decrease of 1 per cent sequentially, the IT-ITeS sector dominated office leasing activity during the period with a 25 per cent share. The banking, financial services and insurance sector came in second, with a 20 per cent share in total absorption during the quarter.
Lastly, manufacturing & engineering and flexible space sectors accounted for 17 per cent and 16 per cent, respectively.
A Tata Consultancy Services (TCS) office in Bengaluru received a hoax bomb threat call allegedly from a former female employee.
Updated Nov 14, 2023 | 09:42 PM IST
TCS Office In Bengaluru Receives Hoax Bomb Threat Call From Former Female Employee : Report (File image)
Bengaluru: A Tata Consultancy Services (TCS) office in Bengaluru received a hoax bomb threat call on Tuesday, reported ETV Bharat citing sources. The threat call caused panic among the employees.
The police were immediately informed. Security personnel evacuated the building. The Bomb threat call was targeted at the B block of the TCS office. As per the reports, after receiving the call, security officials at the office informed the Parappana Agrahara police.
After receiving the information, A bomb disposal squad and a dog squad were rushed to the spot. The bomb disposal squad conducted a thorough investigation. However, nothing suspicious was found.
During the investigation, it was found that a former female employee made the hoax threat call, the report stated.
Notably, it is the second such incident within six months. Earlier in May this year, a similar incident took place at TCS’s Kondapur office, The Indian Express had reported. There also an ex-employee also made a hoax bomb threat call. The office had to be evacuated.
Dismissing a petition filed by Mukunda Rao and Venkatesh Rao, Justice Sreenivas Harish Kumar pointed out that having preferred a sale, the petitioners are precluded from exercising rights under section 3 of the Act. Section 2 of the Act provides for the court to order a sale of property if it is not possible to be divided conveniently or reasonably. Under section 3, if a shareholder seeks sale of the property, the other shareholders can buy the same.
A property in Bhadravathi town in Shivamogga district was put up for spot sale in April 2006. The highest bidder was Ramachandra Rao, the original judgment debtor and one of the shareholders, for slightly over Rs 12 lakh. Thereafter, in the court sale proceedings, one Mujeeb offered Rs 12.1 lakh and paid the same. Ramachandra Rao‘s legal representatives then challenged the said sale, and the HC directed the trial court to proceed in terms of Partition Act provisions.
After this, the legal representatives of Ramachandra Rao moved the trial court, seeking permission to deposit two-thirds of the Rs 12.1 lakh. Another application under section 4 of the Partition Act seeking permission to exercise right of pre-emption was also filed. The petitioners, Mukunda and Venkatesh Rao, also requested the trial court to release their two-thirds share.
Under section 4 of the Act, when a shareholder in a house belonging to an undivided family sells to an outsider, he/she can file a suit for partition and other shareholders may undertake to buy the outsider’s share.
On October 25, 2021, the trial court partly allowed the plea filed by the legal representatives of Ramachandra Rao and directed them to deposit Rs 16,57,058 as being the two-thirds share of Mukunda and Venkatesh Rao.
The court permitted the applicants to purchase the share of the petitioners. The petitioners then argued that being the shareholders, they were entitled to buy the share of the respondents – the legal representatives of Ramachandra Rao. According to them, since the petitioners first made an application under section 2 of the Partition Act, they will get right to buy the share of other shareholders.
Ramachandra Rao argued that the petitioners had lost their right as filing an application under section 2 indicates that they wanted the sale proceeds of the property.
Dismissing the petition filed by Mukunda Rao and Venkatesh Rao, Justice Sreenivas Harish Kumar has pointed out that when the petitioners having rather preferred sale are precluded from exercising right under section 3 of the Act when the respondents are ready to buy the shares of the petitioners at the valuation made by the court.
A property in Bhadravathi town in Shivamogga district was put to spot sale In April 2006. At the spot sale the highest bidder was Ramachandra Rao, the original judgment debtor, for Rs 12,05,000. Thereafter, in the court sale proceedings, one Mujeeb offered Rs 12.1 lakh and paid the same. The legal representatives of Ramachandra Rao then challenged the said sale and the high court directed the trial court to proceed in terms of the provisions of Partition Act.
After this, legal representatives of Ramachandra Rao moved the trial court, seeking permission to deposit 2/3rd of Rs.12,1 lakh and another application under section 4 of the Partition Act seeking permission to exercise right of pre-emption.
Petitioners Mukunda Rao and Venkatesh Rao also requested the trial court to release their 2/3rd share.
On October 25, 2021, the trial court partly allowed the application filed by legal representatives of Ramachandra Rao and directed the m to deposit Rs.16,57,058 being 2/3rd share of the petitioners Mukunda Rao and Venkatesh Rao and permitted the applicants to purchase the share of the petitioners.
Challenging this , the petitioners had argued being the shareholders,they were entitled to buy the share of the respondents, the legal representatives of Ramachandra Rao According to them ,since the petitioners first made an application under section 2 of the Partition Act, they would get a right to buy the share of other shareholders.
On the other hand, the legal representatives of Ramachandra Rao argued that the petitioners have lost their right as filing an application under section 2 indicates that wanted the sale proceeds of the property.
After going through the rival contentions, Justice Sreenivas Harish Kumar pointed out that if sections 2 and 3 of the Act are read harmoniously, the court must be first satisfied that division in accordance with decree is not possible because of one or all the reasons envisaged in section 2.
“Once the court directs sale to be held, the party or shareholder other than the applicant under section 2 gets right to buy” the judge has further noted while upholding the order passed by the trial court at Bhadravathi.
The report released Wednesday in Bengaluru by the United Kingdom-based property consultancy said approximately Rs 2,800 crore is needed to ‘remodel and expand’ the Silicon City’s stormwater infrastructure.
Bengaluru: To prevent recurring urban flooding, Bengaluru needs over 600 km of additional stormwater drains (rajakaluves), United Kingdom-based property consultancy Knight Frank revealed in its latest report. Knight Frank said the city needs approximately Rs 2,800 crore to remodel and expand its stormwater infrastructure, nearly nine months after parts of the city witnessed flooding due to heavy rains.
“Currently, Bengaluru has 842 km of primary and secondary drain. To complement the spatial expansion, the city broadly requires an addition of approximately 658 km of primary and secondary drains. As per Knight Frank estimates, the capex requirement for the construction of new drains in addition to the rejuvenation of existing drains is estimated to be Rs 2800 crore ($350 million),” the consultancy said in a statement.
The report titled ‘Bengaluru Urban Flood’ was released Wednesday at Knight Frank’s office in the city. The nearly two-month-long study found, among other things, how the population grew in the city and how the length of drains reduced over time.
It noted that the length of drains in two major valleys of Bengaluru, Koramangala and Vrishabhavati reduced from 113.2 km and 226.3 km in the 1900s to 62.8 km and 111.7 km in 2016-17, respectively, as per a Comptroller and Auditor General of India (CAG) performance audit of the management of stormwater in Bengaluru in 2021.
On the other hand, the city’s population increased from 57 lakh in 2001 to 1.2 crore in 2021. The population is projected to grow to 1.8 crore by 2031, the consultancy noted.
“Share of the built-up area of the city has increased from 37.4 per cent in 2002 to 93.3 per cent in 2020.”
Knight Frank said the city can adopt “nature-based solutions such as ‘sponge city’ developments” as a way to control urban flooding.
“The concept of a ‘Sponge City’ emphasizes tackling urban surface-water flooding and related urban water management issues such as purification of urban runoff, attenuation of peak run-off, and water conservation. This approach integrates green spaces and ‘blue’ systems like wetlands into conventional ‘grey’ infrastructure such as concrete embankments, contributing to the 2030 UN Sustainable Development Goal (SDG) to ‘make cities and human settlements inclusive, safe, resilient and sustainable’,” the report noted.
“In line with our estimates, the Karnataka government in its FY 2023-24 Budget announced an allocation of Rs 3,000 crore ($375 million) for developing stormwater infrastructure in the city, with assistance from the World Bank. Thus, the provision of financial assistance is not a hindrance, however, there is a compelling need to remodel Bengaluru’s stormwater infrastructure,” Knight Frank concluded.
The two-month-long study — Bengaluru Urban Flood — was released here on Wednesday. It is their first report on the topic in India, and they believe a drainage master plan, to chalk out which up to 1.5 years may be needed, is among the solutions.
Driven by statistics from IISc and other sources, researchers estimated the city needed to construct approximately 658km of primary and secondary drains, in addition to rejuvenating the existing ones. The city currently has 842km of primary and secondary drains and the deficit was calculated based on certain parameters, including the total road length.
The capital expenditure for developing the new drainage system is estimated to be Rs 2,800 crore. About 80% of this is for developing the additional requirement, and the rest for maintaining or upgrading existing infrastructure, said V Shilpashree, the main author of the study. Shantanu Mazumder, executive director, Knight Frak Bengaluru, said the budgetary allocations and the revenue from real estate were good enough for the plan. Bengaluru has to see how other cities in India and abroad have worked out models.
Reduced length of SWDs
The study highlighted that stormwater drains that were 113.2km in length in Koramangala valley in the 1900s are now almost halved — 62.8km in 2016-17 as per the CAG 2021 report. A similar reduction for the said years was seen in the stormwater drain length in Vrishabhavathi valley where 226.3km of SWD was reduced to 111.7km. Estimating the city’s population to go up to 18 million by 2031, the report underlines the need to scale up the existing stormwater drainage system to keep up with the same.
Shilpashree said primary and secondary drains are interconnected and help transfer the excess water collected (due to rainfall) from one lake to the other. However, a lot of concrete development has damaged the inter-connectivity of lakes, thereby reducing the length of the drainage network.
Mazumder said Brand Bengaluru took a hit because of the rain and flooding issue and the same became a red flag even for apartment buyers. Whether a property is in a low-lying area or not is part of their checklist, he said, adding that things like feasibility assessment of a property will consider if it is in a catchment area.
— Inputs from Prithika Lily Correa
In January 2021, KIADB issued preliminary notification for acquiring 2 acres, 30 guntas of the petitioner’s land at Hulikunte village, Doddaballapur taluk. TG Shanthamma and her family members approached the board seeking interim compensation to meet their medical expenses and also settling Rs 53.4 lakh bank loan.
However, KIADB issued an endorsement saying since the final notification is not yet issued and also in view of an order in a civil suit, they can disburse compensation only after the final notification. The family then approached the court seeking permission to sell 50% of the property.
According to them, though their property is valued at Rs 1.6 crore, it can fetch Rs 4.2 crore and they should be allowed to sell half the property as they require Rs 2 crore to tide over the situation.
Taking away ‘oxygen mask’ from ICU patient
Allowing their petition, Justice Krishna S Dixit noted that transfer of the land in acquisition process would not in any way prejudice the interest of state or the beneficiary of acquisition.
“Where the life of citizen depends on a property and the same is being taken away in an acquisition process, though lawfully launched, the delayed accomplishment of the said process and the delay that would eventually be brooked in the payment of compensation till such accomplishment happens, in the given circumstances of the case, would metaphorically amount to taking away the ‘oxygen mask’ from the gasping patient in an Intensive Care Unit…,” the bench observed in its order.
WeWork India’s chief financial officer Santosh Martin said 70% of their space is now occupied by large enterprises, and the remaining by startups, and small- and medium-sized companies. Before the pandemic, large enterprises constituted 50% or less of desk occupancy. The startup funding slowdown has also impacted demand from that segment.
WeWork, the world’s largest co-working space provider, operates in all the major Indian cities including Bengaluru, Gurugram, Hyderabad, Mumbai and Pune. Bengaluru-based 315WorkAvenue says demand from multinational companies in IT, engineering, financial services and R&D has doubled in the past year. Manas Mehrotra, the founder of the coworking space provider, said MNCs and corporate houses traditionally had standalone offices and were reluctant to take on leased coworking spaces. But that, he says, has changed drastically now. “They want coworking offices due to reduced capital expenditure budgets, as also the customised workspace design and enhanced flexibility that coworking spaces provide,” he said.
Among large companies that have taken coworking spaces are Google, which recently took 1 lakh sqft space from provider Smartworks in Pune, Amazon and Accenture, who have taken up spaces in smaller cities like Bhopal and Vijayawada.
Viral Desai, senior executive director at property consultancy Knight Frank India, estimates the occupancy by large corporates across coworking spaces in the country to be at around 80% of the total occupancy. Pre-pandemic, he said, smaller companies dominated the space.
He said this phenomenon is more in Bengaluru and Hyderabad where companies are still operating in the hybrid model, unlike other cities like Mumbai where most companies have asked all employees to work from the office.
“Companies are now more comfortable signing contracts for two to five years to use such flexible spaces. They are leasing offices even in smaller cities like Jaipur. Suddenly if one day, a client says they do not want people to work from that location, it would be easier to wind up that establishment,” Desai said.
He said corporates are now signing multi-city contracts where they would commit to using a certain number of seats across three or four cities, instead of signing up for a particular number in each of these cities. Anshuman Magazine, chairman & CEO for India, South-East Asia, Middle East & Africa at property consultancy CBRE, felt that going forward, companies would continue to view such spaces as a hedge against headcount uncertainty. Such spaces offer shorter lease durations and more flexible lease terms.
Rents in India’s technology hub of Bangalore have nearly doubled since the start of last year, making it the country’s hottest residential market.
Landlords in the city, often referred to as India’s Silicon Valley, now charge the highest proportion of their property’s value as rent, edging out financial center Mumbai, according to data from market researchers.
The capital of Karnataka state is home to over 1.5 million workers including those for global firms like Alphabet Inc.’s Google, Amazon.com Inc., Goldman Sachs Group Inc. and Accenture Inc. That population was displaced during the pandemic, with staff moving to remote work or departing the city, pushing rents down. With Bangalore’s economy and private sector stirring back to life, landlords are looking to recoup lost revenue and find themselves in a seller’s market.
“Rental market is too hot right now,” said Prashant Thakur, head of research at property consultancy firm Anarock. “Apartments had to be rented out at very low rates during Covid as many went back to their hometowns. Now that people are getting back to the office, landlords are making up for their losses with higher rents.”
Anarock’s data shows rents in various Bangalore neighborhoods have jumped by double digits since 2019, echoing a wider surge across India’s major cities. But Bangalore’s more recent cost increase is larger because it took a bigger hit from the pandemic, market observers say.
The experience of securing a home is also turning into a highly competitive race.
Ripu Daman Bhadoria, who moved last year from Amazon in Seattle to Google in Bangalore likened his house hunt to clearing a job interview at the Mountain View, California-based search giant. “Engineers think Google interviews are tough but this is another level,” said the 36-year-old engineering manager who has multiple people on his team facing the rent challenge. “The stress impacts health, it impacts work, everything.”
The shortage of supply has led estate agents and ultra-picky home owners to demand LinkedIn profiles and resumes from prospective renters, said Arpan Batra, the owner of real estate consultancy Anzen Spaces. She and Waquar Ahmed of Ahmed Realty — who has 35 clients looking for a home and no inventory to offer — both observed a doubling of rent prices over the past year. Multiple interview rounds, including on Zoom, are now commonplace.
Part of the problem is an artificial constraint on supply, Batra said, brought on by construction grinding to a halt during the pandemic. Bangalore only added roughly 13,560 residential units in the first quarter of this year, an increase of just 3% compared with a 55% jump in Mumbai, according to Anarock. Bangalore is now the top Indian city for rent yield with 3.9%.
Nowhere is the problem as acute as the neighborhoods in central Bangalore, Whitefield and the Outer Ring Road (ORR) area. There are about 350 companies in the 17-kilometer ORR stretch and they together employ one million workers, said Krishna Kumar Gowda, general manager of the Outer Ring Road Companies’ Association. The concentration is high and impacts availability of rental homes within a reasonable distance, he said. Intel Corp., Microsoft Corp., KPMG, Goldman Sachs and Morgan Stanley Inc. have their offices along the length of the road and a new Google campus with a capacity for housing 10,000 workers is coming up fast, said Gowda.
Ramyakh Jain, who moved to Bangalore for a new job, found a two-bedroom rental home for 50,000 rupees ($600) per month in February. It’s one-and-a-half times the rent and only half the size of the apartment he had in New Delhi’s Gurgaon district previously. It took him weeks of scouring the market with the help of as many as 25 estate agents. Even so, he considers it an accomplishment.
“I’ve found a roof over my head,” Jain said. “I’m among the lucky ones.”
While the demand for houses worth less than Rs 25 lakh went down compared to last year, the demand for properties worth above Rs 50 lakh went up, according to Knight Frank India.
Residential registrations in Hyderabad increased by 32% month on month (MoM) basis during November 2022, property consultancy Knight Frank India noted in its latest assessment. The city recorded registrations of 6,119 units of residential properties in November. The total value of properties registered during the month stood at Rs 2,892 crore. Since the beginning of the year, the city has observed registration of 62,159 residential units with a total worth of Rs 30,415 crore compared to registrations of 75,453 residential units amounting to Rs 33,531 crore observed in a similar period last year, the real estate consultancy firm said.
The Hyderabad residential market includes four districts namely Hyderabad, Medchal-Malkajgiri, Rangareddy and Sangareddy. Residential units in the price band of Rs 25 – 50 lakh constituted 50% of the total registrations in November 2022, which is an increase from a share of 37% in November 2021.
Demand in the less than Rs 25 lakh ticket size, however, weakened with its share constituting 22% compared to 39% a year ago. Greater demand for larger ticket size homes remained evident as the cumulative share of sales registrations for properties with ticket sizes of Rs 50 lakh and above increased to 28% in November 2022 from 24% in November 2021.
In November 2022, the share of registrations in the unit category of properties sized 500 – 1000 square feet increased to 22% compared to 15% observed in November 2021 while properties sized 1,000 square feet or higher witnessed a dip in share from 74% in November 2021 to 65% in November 2022. At the district level, the study shows that home sales registrations in the Medchal-Malkajgiri district were recorded at 41% followed by Rangareddy district at 39%. The share of Hyderabad district in total registrations was recorded at 14% in November 2022.
The weighted average prices of transacted residential properties have increased by 12% YoY in November 2022. Sangareddy district saw the steepest rise of 47% YoY in November 2022 indicating more higher-value homes were sold in this location during this period.
“Residential registrations in Hyderabad increased by 32% MoM in November 2022, while observing a 21% decline on a yearly basis. The city’s residential market saw some relief in November as the Hyderabad market witnessed an uptick in registrations despite major headwinds from geopolitical developments and a spike in home mortgage rates over the last few quarters. The more sensitive lower ticket sector is affected, however, the demand for higher value homes continues to remain strong,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.