Nestled near Bengaluru's eastern IT corridor, HSR Layout has undergone a remarkable transformation. What started as a tranquil Bengaluru Development Authority (BDA) residential layout in 1985 has now emerged as one of the city's first startup hotspots, complete with its very own High Street.
Around mid-2014, Saurabh Garg, the co-founder of prop-tech unicorn NoBroker, moved to HSR Layout to commence his startup journey.
During that time, Garg said, HSR Layout was one of the most affordable places in Bengaluru. Several chains of hip coffee shops started sprawling up in the area, attracting most of the millennial crowd.
In the early 1990s and mid-2000s, HSR Layout started gaining prominence due to its strategic location close to the IT corridor in the east and south, growing infrastructure, and retail shops springing up in the area.
The BDA Complex, HSR Layout's shopping destination, became a hot option for hangouts and "startup planning", as Garg describes.
How did it evolve as a startup hub?
Back then, Koramangala and Indiranagar had established themselves as among the prime locations in Bengaluru. But as real estate prices appreciated in Koramangala, several startup founders started shifting towards HSR Layout (about 4 km away).
While HSR started expanding in the mid-2000s, a major boost came between 2010 and 2014, experts say. At that time, apartment costs in Koramangala were touching Rs 6,000-7,000 per square foot while HSR was commanding Rs 4,000-5,000 per sq ft, according to Sunil Singh, Founder of Bengaluru-based Realty Corp.
"Even the land cost in Koramangala at that time was Rs 12,000 per sq ft while the prices in HSR were almost half at Rs 6,000 per sq ft. The retail prices were also much less compared to Koramangala and Indiranagar," he added.
This led to several startups spilling over to HSR Layout, where land was available and much less congested than the already established Koramangala area.
"Being affordable and also well-connected to IT corridors, we decided to start the venture from HSR Layout in small bungalows that were present at that time. Even other companies, like Myntra or CultFit, also started in the same area," Garg said.
As startups flocked to HSR, office spaces cropped up in clusters, solidifying its status as both a residential and commercial hub.
According to Colliers data, the present unicorns such as Zetworks, Grow and Paytm started operations in HSR Layout and later moved to tech parks and prominent office spaces as these companies expanded and grew over time.
At present, startups such as Whatfix, Dealshare, Kathabook, Cult, and Dukaan are some of the large and prominent occupiers in HSR Layout.
Real estate appreciation
Umakanth Y, Director of Advisory Services at Colliers India, said the location of the HSR Layout is the key factor responsible for the area’s tremendous growth.
The Outer Ring Road, Hosur Road, Sarjapur Road, and Bengaluru City Railway Station provide infrastructural connections to the HSR Layout.
"The under-construction metro Line 3 (RV Road-Bommasandra) in Phase 2, projected to be operational by early 2024, has been one of the drivers in the last five years," he added.
The developers' footprint (both Grade A and B) has increased in the last few years with nearly 7,000 residential units being launched since 2004, according to data from Knight Frank. The micro-market primarily comprises mid and luxury segments, it added.
The 27th Main in HSR Layout became one of the closest high streets for residents in south-eastern Bengaluru, for whom MG Road was still 10 km away and Indiranagar even further.
The major change, experts say, is that the residential segment in the area has evolved from independent bungalows to gated societies as millennials and a considerable number of Bengaluru's floating population started settling in the area.
According to Singh, the land price now has jumped to Rs 18,000 per sq ft in HSR Layout – almost at par with Koramangala. The commercial prices in Koramangala's prime 100 Feet Road are around Rs 38,000-40,000 per sq ft, while HSR Layout commands Rs 35,000-60,000 per sq ft.
And the real estate prices are appreciating between 10-20 percent every year.
Currently unaffordable, major infrastructural failure
However, this upward trajectory has made HSR Layout less affordable, with the rental market going into a frenzy. Prices have surged by a staggering 20 percent compared to the previous year. A 2BHK rental today costs between Rs 45,000-55,000 in HSR Layout while a 3BHK starts at Rs 80,000 per month. Still, inventories are not available due to growing demand, local brokers say.
The Outer Ring Road and the major Silk Board junction – that connects parts of Bengaluru's IT Corridor together – see major traffic snarls that last for more than an hour at times.
"Bottlenecks like Silk Board have a major traffic hurdle and people don't want to be anywhere close to Silk Board. Standalone property prices have dipped by about 10-15 percent and are still dropping compared to the by-lanes away from traffic,” said Balaji Badrinath, a realtor at Coldwell Banker.
Additionally, every year, heavy rainfall inundates parts of HSR Layout, including several apartment complexes and residential plots.
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