Major real estate transactions and acquisitions after 2020 bolstered the region's stronghold on residential housing. For example, Birla Estates, the real estate arm of Century Textiles and Industries, has agreed to jointly develop a prime 52-acre land parcel in North Bengaluru with MS Ramaiah Realty LLP.

Residential prices and sales in the North West Bengaluru region — including places like Malleshwaram, Rajajinagar and Peenya — are expected to grow at a higher rate, as compared to other parts of the city over the next five years, according to a report by data analytical firm CRE Matrix.

Residential supply in the area grew by about 29 percent between 2022 and 2023, while demand surged by 64 percent, data showed. The data shows North West Bengaluru saw a demand of 3,405 units and a residential supply of 2,012 units in CY2023, up from 2,639 and 1,221, respectively, in CY2022.

On an average, 2,500 units are sold every year in the region, representing around a 6 percent contribution to overall city sales.

Based on the demand-supply ratio (D/S Ratio), the report puts North West Bengaluru on top of of other macro-markets like North East (Devanahalli and Yelahanka) and South East (Outskirts of Whitefield) regions. With a D/S Ratio of 1.7x, North West has surpassed even the larger markets of South and East, the report added.

A macro-market can be a larger part of a city or a state which follows a geographical demography. In real estate, the demand and price trends of smaller hubs or micro-markets may follow the larger leads of the macro market.

Prices increase over 30%

Housing prices have increased by about 31 percent to Rs 9,912 per sq ft in August 2024, from Rs 7,553 per sq ft in CY2023.

About 57 percent of units sold in the macro-market have been priced below Rs 1 crore, CRE Matrix data showed. However, recently, units priced above Rs 2 crore have also started getting traction in the macro-market, it added.

"Prominent developers such as Brigade, Phoenix, Prestige, Vaishnavi, Puravankara, and Sattva Group have established their presence in the North West region. With brands such as Godrej and Birla Estates foraying into the region, we expect sales and pricing to grow at a higher rate, compared to other parts of the city," the report said.

Big brands enter the region

Major real estate transactions and acquisitions after 2020 also bolstered the region's stronghold on residential housing. In November 2022, IKEA India established its third India store in Nagasandra, Bengaluru.

Birla Estates, the real-estate arm of Century Textiles and Industries (CTIL), has agreed to jointly develop a prime 52-acre land parcel in North Bengaluru with MS Ramaiah Realty LLP. Godrej Properties also lapped up a 5-acre land parcel to launch its first project in this macro-market.

"The most densely populated macro-market of Bengaluru is now witnessing a massive connectivity push. With the metro already connecting this region to other parts of the city, the North West is perfectly positioned for growth in the immediate future. Adding to this, the infra spending to the tune of around Rs 16,000 crore will only further improve the region’s attractiveness. But for me, North West is the immediate solution to Bengaluru’s massive congestion problem," Abhishek Kiran Gupta, CEO & Co-founder, CRE Matrix & Indextap.com, told Moneycontrol.

Outer Ring Road, Whitefield completely choked with congestion

The report highlights that major Bengaluru’s relatively poor public transport and lower capacity of roads to handle traffic have led to massive congestion around the eastern IT corridor of Whitefield and the central prime commercial hub of the Outer Ring Road (ORR) area.

"Higher market rents, as compared to rentals in ORR and Whitefield, have ensured that Bengaluru remains a strong landlord’s market. However, with strong alternatives such as North West emerging, rentals are likely to reduce in the near future. With connectivity infrastructure and liveability conditions better than many other macro markets of the city, North West presents a rare opportunity to lap up office spaces to leverage the temporary rental arbitrage available today," the report added.

CRE Matrix said that North West Bengaluru has an office stock of 2.1 million sq ft, with a supply of 8 million sq ft over the last two years.

In terms of size, prime office assets in North West Bengaluru compete head on with prominent assets in the other macro-markets of ORR and Bengaluru North.

ORR rentals have grown at a faster pace than in North or North West Bengaluru. With infrastructure and affordable commercial space available, the report said that over the next five years, North West rentals will increase by 6-8 percent annually.

"Based on the current contractual agreements, future rentals in North West are likely to remain above North and ORR average office rentals over the next six years. Contributing just 5 percent to the under-construction office supply in the city, North West will see limited supply coming up for completion over the next five years. Prominent developers, such as DNR, Salarpuria Sattva, Brigade, Puravankara and Prestige, have lined up sizeable assets for buyers looking to expand or relocate in the city," the report said.