Investing in Bangalore Real Estate: A Cluster Framework Approach

In this blog, we take a dive into answering the most frequently asked questions about investing in Bangalore real estate. As we are aware, Bangalore’s real estate market is going through an unprecedented boom across, especially in the North and East part of the city. 

We take this opportunity to give a perspective to the most frequently asked questions we get from our clients who look to invest in real estate here. Let's get started.

Choosing the Right Investment Location

When it comes to investing in real estate, the main question that arises is where to invest in Bangalore. The insights explain that real estate works in a cluster framework. Historically, cities were built around sea or river ports, based on the proximity to economic activity. In today's information era, cities are built around information technology sectors and transit hubs. Bangalore, being the largest tech sector in India and one of the top five IT clusters in the world, is predominantly driven by the IT sector.

So focus on macro factors and track economic activities and cluster formations. Here we suggest investing in areas where economic activity is growing and moving. For example, in Bangalore, the north and east parts of the city are currently experiencing significant development due to the presence of IT parks and the relocation of the international airport.

The Development of North Bangalore

North Bangalore has seen significant growth and development in recent years. With the relocation of the airport, the area has become a hub for IT parks, commercial spaces, and residential properties. Large companies like Boeing and Shell have set up campuses in this region, attracting more businesses and professionals.

This insight points out that around 45-48% of the new IT space in Bangalore is being developed in North Bangalore, making it a promising investment opportunity. The area is also witnessing the establishment of educational institutions, religious centers, and other amenities, further contributing to its growth.

Understanding the Role of Development Authorities

When it comes to buying property in Bangalore, there are various authorities involved in the approval process. The Bangalore Development Authority (BDA) is responsible for planning the city's development and approving construction projects. The Bruhat Bengaluru Mahanagara Palike (BBMP) is the municipal corporation that provides essential urban services.

The properties approved by the BDA are considered the best options to invest in. These properties undergo a thorough review and receive an occupancy certificate (OC) once completed. The BBMP registers properties and issues a "Kata" (account number) for record-keeping and property taxation purposes. It is advisable to invest in properties with a proper OC and Kata to minimize risks.

The Role of Real Estate Agents

Real estate agents play a crucial role in assisting buyers with their property investments. While some buyers may prefer to conduct their own research and make direct purchases, here we need to consider the value that professional agents bring to the table. Agents have in-depth knowledge of the market, trends, and upcoming developments. They provide rational information and advice based on their expertise.

Professional agents help buyers avoid potential pitfalls and guide them towards making informed decisions. They understand the buyer's requirements, provide data-driven recommendations, and ensure transparency throughout the process. However, it is essential to choose a reputable and trustworthy agent to maximize the benefits of their services. 

Did you know? | Real estate agents only charge the customer for a resale transaction. When transacting with the developer (aka Primary transactions) directly, there are no charges.

Investment Opportunities in North Bangalore and East Bangalore

Based on data and ongoing developments considering investment opportunities in North Bangalore and East Bangalore. Approximately 48% of the new IT space in Bangalore is being developed in North Bangalore, making it a prime location for investment. Additionally, around 25-26% of the new IT space is being developed in the East Bangalore corridor.

These areas are experiencing significant traction due to the upcoming IT parks, commercial spaces, and other infrastructure projects. With the rise of employment opportunities and the influx of professionals, these micro-markets are expected to witness substantial growth over the next few years.

Conclusion

Investing in real estate requires careful analysis, and choosing the right location is crucial for maximizing returns. By understanding the cluster framework approach and considering factors like economic activity, cluster formations, and ongoing developments, investors can make informed decisions.

North Bangalore and East Bangalore are currently the hotspots for real estate investment in Bangalore. With the planned IT developments and the anticipated growth in these areas, investors have an excellent opportunity to capitalize on the potential returns.


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