Explainer: Is south Bengaluru catching up with the realty boom in the eastern IT corridor?

According to local brokers, properties in parts of south Bengaluru, like Kanakapura Road, being relatively cheaper, make for an attractive investment.

While real estate in the eastern IT corridor of Bengaluru's Whitefield has skyrocketed over the past two years, experts say the southern parts of the city are now slowly catching up.

Parts of south Bengaluru like Kanakapura Road, Electronic City, Bannerghatta Road, JP Nagar, and BTM Layout have seen a 10-15 percent rise in real estate prices since December 2023, local brokers say.

Experts point out that real estate rates in north and east Bengaluru have jumped every quarter over the past couple of years, while the southern parts of the city have appreciated slowly.

"Only now we see prices in the south rising significantly, especially with the over-saturated rental market in eastern Bengaluru's Whitefield," said Sunil Singh, Director, Realty Corp.

According to local brokers, properties in parts of south Bengaluru, like Kanakapura Road, being relatively cheaper, make for an attractive investment.

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"The return on investment (RoI) for a commercial property today is about 5 percent per annum. If a person invests in a property today, the RoI can be as much as 25-30 percent over the next five years," said Kiran Kumar, Vice-President, Hanu Reddy Realty.

Ongoing developments like the Bengaluru-Mysuru Expressway and the southern metro corridor have impacted land prices in the area. According to Singh, a 1 acre plot in places like Kengeri have jumped from Rs 1.5-2 crore to Rs 2.5-5 crore. And it is likely to appreciate further.

Prices in the south rising steadily

In once affordable places like BTM Layout, a 2 BHK was being rented out for Rs 25,000 per month till December 2023. Today, the same apartments are being rented at Rs 35,000-40,000 per month, Singh added.

Similarly, in JP Nagar, average rents have shot up from Rs 28,000 per month to Rs 30,000-35,000.

"We notice a similar trend in other parts of south Bengaluru. Fully-furnished apartments in JP Nagar are being rented out at Rs 48,000 per month, up from Rs 35,000-40,000 before," Singh added.

In fact, data from Magic Bricks says that rentals in the south have moved up  26 percent over last year, while rentals in the east have spiked 20 percent.

Playing catch-up

Knight Frank India research says that unsold inventory in south Bengaluru has dropped by 14 percent, while the same for east Bengaluru has spiked 66 percent in the second half of last year. This points to the growing demand for real estate in the southern parts of the city, while north and east continue to be the top choice.

Experts note that although south Bengaluru realty is growing, the city's east and north will continue to dominate the rental and commercial sector because of the rapidly expanding developmental projects.

"The southern parts of the city will continue to remain an affordable real estate hub until we see major development happening. Till then, places like Whitefield in the east and areas closer to the airport in the north will continue to grow at a faster pace," Singh added.