HIGHLIGHTS • In 2013, Bengaluru market recorded highest absorption of office space among top 6 cities in India. • Cumulative leases in the Bangalore market amounted to just over 8.66 million sq. ft. in 2013. • New requirements were mainly from corporates seeking to realign their office requirements. • New office supply was close to 5.5 million sq. ft., which was 28% less than the new supply in 2012. • It is anticipated that the annual transaction volumes in 2014 will be similar to 2013.

1. Bengaluru (Bangalore) Office Market
Snapshot 2013

2. Bengaluru Office
Market Snapshot 2013
Quarter-on-Quarter Absorption
Highlights
3.5
2.88
3.0
AVERAGE ABSORPTION
2.0
1.68
1.5
1.28
1.0
0.5
0.0
1Q
Demand
Absorption of office space in the Bengaluru market amounted to
just over 8.66 MN SF in 2013, which is 9% and 23% down
recorded in the year 2012 and 2011 respectively. In the first half
of the year, Bengaluru witnessed robust demand from occupiers;
However there was a drastic reduction in the number of transactions in the second half of the year. There were fewer large sized
transactions in 2013 as compared to previous years. In 2013 the
average space size of the deals was approximately 37,000 SF,
which was half of that in 2012 as most of the demand was generated by small and mid-size enterprises looking for expansion.
2.82
2.5
IN MN SF
Bengaluru office market was the largest contributor to the panIndia office space absorption with a share of approximately 27%
of the total area leased in 2013. However, overall occupier
demand in Bengaluru has softened in 2013 as against 2012. New
requirements are mainly from corporates seeking to realign their
office requirements via consolidation and relocation. New office
construction commencements and office development completions have been very limited. The drop in demand has been
matched by drop in new supply, thereby maintaining the
demand supply gap in equilibrium.
2Q
3Q
4Q
Industry Wise Absorption
Others 15%
Telecom 2%
2
Engineering
14%
1
IT/ITeS
79%
IT/ITeS remained the primary demand driver accounting for
approximately 80% of the total office space absorption. The
Outer Ring Road and Whitefield micro-markets remained the
preferred office destination, together accounting for 55% of the
total absorption.
Top 10 Transactions of the Year
Client
Developer /
Landlord
Samsung
Constellation Business Park
Bagmane Developer
550,000
Outer Ring Road
2Q
Honeywell
RMZ Ecoworld
RMZ CORP
500,000
Outer Ring Road
2Q
JDA
Mantri Commercio
Mantri Developer
360,300
Outer Ring Road
3Q
Cerner
Manyata Embassy Tech Park
Embassy Group
350,000
Outer Ring Road
1Q
Columbia Asia Hospital
Independent Building
Sivasakthi Developer
300,000
Whitefield
1Q
Amazon
Brigade WTC
Brigade Group
252,000
Malleshwaram West
2Q
Adobe
Prestige Platina Tech Park
Prestige Group
250,000
Outer Ring Road
3Q
Accenture
Prestige Technopolis
Prestige Group
250,000
Dairy Circle
3Q
Symantec
RMZ Ecoworld
RMZ CORP
246,000
Outer Ring Road
4Q
AXA Group
1
Building Name
Mfar Manyata Tech Park
Mfar Construction
196,250
Hebbal
4Q
Bengaluru Office Market Snapshot 2013 | Colliers International
Area (In SF)
Location
Transaction Quarter

3. Supply & Vacancy
New office supply was close to 5.5 MN SF, which is 28% lesser
than the new supply in 2012. Given that most of the demand
was for Outer Ring Road and Whitefield, it comes as no
surprise that 75% of the new supply was also located in these
two micro-markets. The remainder of the new supply was
evenly split between Hosur Road and Electronic City micromarkets. Due to the limited addition of new buildings, the
overall market vacancy has reduced to 14% which is marginally
lower than that of 2012 (15%).
New Supply, Absorption & Vacancy
12
18%
FORECAST
10
14%
8
12%
10%
6
8%
4
Rental & Capital Values
Rentals in CBD and Electronic City remained stable. In the
preferred office destinations, Outer Ring Road, Whitefield and
Banerghatta Road rental values appreciated by 6 - 10% on Y-o-Y
basis. Going forward, rental values in the EPIP Zone, Whitefield
and ORR are expected to witness an increase due to consistent
occupier’s interest especially from the IT/ITeS industry.
6%
4%
2
2%
0
2010
Development completions will continue to be below average as
developers shall refrain from adding more speculative supply
until the overall market improves. There are however a significant number of under construction projects in Whitefield, Outer
Ring Road and towards the north Bengaluru. Overall, the
prospects for office rentals increasing significantly is unlikely,
barring micro-markets such as Outer Ring Road and CBD which
are expected to witness modest rental increases in 2014. This
could be due to a scarcity of quality office space. Rental values
may be under a downward pressure in peripheral micro-markets like Electronic City and Whitefield due to higher supply
ratio as compared to other micro-markets.
2
Bengaluru Office Market Snapshot 2013 | Colliers International
2011
2012
New Supply (In MN SF)
2014 Prognosis
It is anticipated that the annual transaction volumes in 2014 will
be similar to 2013, albeit the second half of the year is expected
to be stronger than the first half, as market activity after the
general elections is expected to improve and be better than now.
16%
2013
2014 F
Absorption (In MN SF)
2015 F
0
Vacancy (In %)
Average Rentals Trends & Forecast
60
FORECAST
50
40
30
20
10
0
2008
2009
2010
2011
2012
2013 2014 F
Average Rental Trends (INR Per SF Per Month)
2015 F

4. Primary Authors:
62 countries on
6 continents
United States: 140
Canada: 42
Latin America: 20
195
EMEA: 85
$2
Surabhi Arora
Associate Director | Research
+91 124 456 7500
surabhi.arora@colliers.com
Amit Oberoi
National Director I Valuation & Advisory Services
& Research
Sachin Sharma
Assistant Manager I Research
For Office Services:
George McKay
South Asia Director I Office & Integrated Services
george.mckay@colliers.com
billion in
annual revenue
Vikas Kalia
National Director I Office Services
vikas.kalia@colliers.com
1.12
Yogesh Bheemaiah
Director I Office Services
yogesh.bheemaiah@colliers.com
13,500
Technopolis Building, 1st Floor,
DLF Golf Course Road,
Sector 54, Gurgaon - 122 002
TEL +91 124 456 7500
billion square feet
under management
professionals
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