• Bangalore is currently witnessing aggressive construction activity. Approximately 21 million sq.ft. of office space is either planned or under construction and of this, approximately 6 million sq.ft. is expected to be available by the year end, while the balance is scheduled for completion by 2007 and 2008.
  
• Traffic congestion, parking issues, deteriorating road
  conditions and low vacancy rates (less than 5%) in the CBD and its vicinity, has forced corporates to evaluate real estate options in the suburbs. The suburban markets continue to offer new projects with large floor plates and its growth potential along with excess supply has ensured lower rental costs. These micro markets have easy access, infrastructure and residential localities in the vicinity.
  
• The government continued its efforts in improving infrastructure to support the rising pressure on the city. BMRDA announced plans to construct an access controlled, 4-lane, 30 km highway connecting Nagavara on the Outer Ring Road to the new international airport in Devanahalli and this will encourage commercial development across sectors. Further, the state government has approved the new industrial policy enabling development of industrial areas in excess of 500 acres and provided incentives such as capital investment subsidies, entry tax waivers, etc.

• Rentals have broadly remained stable during the last month and are expected to remain at the same levels across most micro markets. CBD and its vicinity, however, is expected to witness a marginal increase in rentals, due to the demand supply imbalance. Demand from corporate tenants planning their expansion will continue within suburban and periphery locations as well. Demand for medium size offices will also increase as new companies try to establish base in Bangalore.

Source : Cushman & Wakefield Research, Consensus Economics, Central Statistical Organisation