LOREM IPSUM DOLOR SITAMET    Lorem IpsumBangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesSeptember, 2010           ...
Bangalore: Outer Ring Road  IT/ITeS Growth Corridor SeriesORR 2010 & BeyondHebbal  18.6                      million sqft ...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesExecutive SummaryThe Outer Ring Road stretch from Hebbal to Silk B...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesEmergence of ORR as a growth corridor for ITdevelopmentsTransforma...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesThe figure below summarizes the key events – (policy level, IT inf...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesAdvantage ORRThe following characteristics of ORR stretchbetween H...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesThe following table summarizes the potential of these stretches fo...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series                                                    Figure 3: ORR-...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesIT developments along ORR   ·   ORR stretch accounts almost 25% of...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series   ·   Since 2004, over 18 million of office                      ...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series   ·   Planned supply is largely concentrated in                  ...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series   ·   IT/ITeS companies occupy more than 95% of the total operati...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesFuture of ORR for IT developmentsORR is expected to continue to re...
Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesACRONYMSORR – Outer Ring RoadJn. – JunctionMNCs – Multinational Co...
IT/ITeS Growth Corridor Series_Outer Ring Road, Bangalore
IT/ITeS Growth Corridor Series_Outer Ring Road, Bangalore
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IT/ITeS Growth Corridor Series_Outer Ring Road, Bangalore

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IT/ITeS Growth Corridor Series_Outer Ring Road, Bangalore

  1. 1. LOREM IPSUM DOLOR SITAMET Lorem IpsumBangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesSeptember, 2010 Page | 1
  2. 2. Bangalore: Outer Ring Road IT/ITeS Growth Corridor SeriesORR 2010 & BeyondHebbal 18.6 million sqft of operational Grade A office space 25% of Bangalore’s total operational IT space KR Puram 75% of Bangalore’s total operational IT/ITeS SEZ space 5% Marathahalli of office space vacant as of H1 2010 95% of the office space occupied by IT/ITeS companies 3.3 Silk Board Jn. million sqft Grade A office space under construction 28 million sqft planned Grade A office space Page | 2
  3. 3. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesExecutive SummaryThe Outer Ring Road stretch from Hebbal to Silk Board Junction, popularly referred to as ORR, has developedin the last 10 years as an Information Technology (IT) growth corridor and accounts for almost 25% ofBangalore’s total IT space. Currently, global IT clients such as IBM, Accenture, Cisco, Philips, Intel, Honeywelland others operate in this micro market.ORR scores over other IT growth corridors of Bangalore in terms of proximity to Central Business District(CBD), availability of large land parcels, proximity to city’s talent pool and favourable developmentregulations. Ongoing infrastructure works aimed to transform the ORR into a signal free corridor and theupcoming hotel and retail projects will further enhance connectivity and support infrastructure in this micromarket.ORR’s IT growth corridor story commenced in early 2000s with land acquisition and allotment efforts byKarnataka Industrial Areas Development Board (KIADB) to promote IT developments. Further, single windowclearance system adopted by Karnataka Udyog Mitra (KUM) supported the KIADB’s initiative. Prior tocommencement of Bagmane World Technology Center & Ferns Icon in 2008, developmental activity waslargely concentrated between Marthahalli – Sarjapur stretch primarily due to favourable zoning regulationsand availability of large land parcels. Currently, the Marthahalli – Sarjapur and Hebbal – KR Puram stretchesaccount respectively for 57% & 36% of the total Grade A office space operational along the ORR. In future,KR Puram - Marthahalli stretch is likely to witness almost 17% of the total IT space being developed in thismicro market.ORR predominantly has large multi-tenanted IT parks with almost 95% of the total Grade A office spacebeing occupied by IT and ITeS companies and the proportionate share between IT and ITeS segments is 57%and 42% respectively. As on date ORR has over 18 million sqft of operational IT space and approximatelyanother 3.3 million sqft under construction. The planned supply along this micro-market is estimated to be28 million sqft. ORR constitutes for 75% of the Special Economic Zone developmental activity in the city andthis trend is expected to continue as this micro market has over 300 acres of land available for developmentunder SEZ category.Current levels of vacancy of Grade A office space along ORR is just over 1 million sqft and likely to drop in H22010. Even during the global meltdown phase (Q4 2008 – 2009) average rentals for Grade A office space inORR relatively witnessed a lesser drop compared to other peripheral markets – Whitefield and ElectronicsCity signifying the balance between supply and demand levels.While ORR continues to remain an attractive IT growth corridor rental levels in short term are expected torise owing to very low existing vacancy levels and limited projects under construction. However in mediumto long term the prices will stabilize owing to planned supply. Page | 3
  4. 4. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesEmergence of ORR as a growth corridor for ITdevelopmentsTransformation of Bangalore from a ‘Garden City’ to ‘Silicon Valley of India’ started in 1980s. Since thebeginning, IT hubs were predominantly concentrated in southern and eastern regions of the city namelySecondary Business Districts (SBDs) of Airport Road, Bannerghatta Road, Koramangala & Indiranagar andGovernment promoted Peripheral Business Districts (PBDs) of EPIP, Whitefield & Electronics City, HosurRoad. This resulted in emergence of areas around SBD - Koramanagala / Indiranagar / BTM Layout / SarjapurRoad in southern and eastern pockets of Bangalore as preferred residential locations by IT population. Figure 1: Bangalore-Early IT Hubs NH 4 To BIA N Hebbal Yeshwantpur NH 7 NH 4 ITPL KR Puram Magadi Road Whitefield CV Raman Nagar CBD Indiranagar Old Airport Road Marathahalli Old Airport Koramangla Silk Board Jn. Kengeri Sarjapur Road BTM Layout SH 17 NH 209 Bannerghatta ORR (Hebbal to Silk Board Junction) Major State and National Highways NH 7 Residential Locations preferred by IT working population Electronics’ Key IT Hubs in 2000 CityORR’s IT growth corridor story commenced in early 2000s with land acquisition and allotment efforts byKarnataka Industrial Areas Development Board (KIADB) to promote IT developments. To facilitate promptdevelopments, KIADB acquired large land parcels along ORR and ensured conversion of the same forindustrial hi-tech use. Further, single window clearance system adopted by Karnataka Udyog Mitra (KUM)supported KIADB’s initiative. With the completion of Outer Ring Road (ORR) in 2002, a new growth corridoropened up for IT development in Bangalore.The announcement of Special Economic Zone (SEZ) policy in 2005, led to the export oriented IT/ITeS sectorto focus their growth in upcoming SEZ parks due to expiry of the incentive structure under the SoftwareTechnology Parks of India (STPI) scheme. Readily available large land parcels along ORR and Governmentinitiative of the revised Bangalore Master Plan 2007-15 provided impetus to IT development throughfavorable zoning regulations.With the commencement of Bangalore International Airport (BIA) in 2008 in Devanahalli, the ORR stretch:Hebbal to Silk Board Jn. gained importance as it serves as the main artery between BIAL and major IT hubsof Bangalore i.e. – Whitefield & Electronics City. Page | 4
  5. 5. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesThe figure below summarizes the key events – (policy level, IT infrastructure development promoted byGovernment and completion of BIA) which promoted ORR to become a IT growth corridor of Bangalore Figure 2: ORR-Emergence as IT Growth Corridor Key Policy Level IT Connectivity IT Developments along ORR Initiatives Infrastructure Intiatives Formation of 1978 Electronics City 1990 Formulation of1991 STPI Scheme Commencement of construction works for ORR Formation of EPIP1994 Zone in Whitefield 1995 Commission of Announcement 1996 · WIPRO ITPB1998 (JV between KIADB of BIA1999 & Ascendas) 1999 · Intel Technologies 2000 · Manyata Embassy Business Park · RMZ Ecospace 2005 · RMZ Ecozen · Salarpuria Supreme2002 · Prestige Tech Park Completion of ORR 2006 · Salarpuria Hallmark · Salarpuria Softzone Annoucement 2005 2007 · Vrindavan Tech Village of SEZ Act · Cessna Business Park Release of · Salarpuria Touchstone2007 Bangalore 2008 · Adarsh Tech Park (P-I)2008 Master Plan · Ferns Icon Commissioning · Global Technology Park of BIA 2009 · Pritech Tech Park 2010 · Bagmane World Technology Center Announcement of SEZ Act in 2005, favorable zonal regulations triggered growth along ORR Presence of IT working population dominant residential zones in eastern and southern regions of Bangalore due to development of IT hubs- Electronics City and Whitefield supported the growth of IT developments along ORR Post commissioning of BIA in 2008, the ORR stretch- Hebbal to Silk Board Junction has gained importance as it acts as the main connection between BIA and major IT hubs Page | 5
  6. 6. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesAdvantage ORRThe following characteristics of ORR stretchbetween Hebbal and Silk Board Jn. makes it one ofthe most attractive IT growth corridors ofBangalore: · Availability of large land parcels · Designated as Mutation Corridor** · Zoning of land to Industrial Use (Hi-Tech) thereby increasing the permissible FSI up to 3.25 · Proximity to established IT talent pool & established residential hubs · Proximity to CBD (M.G. Road) compared to other peripheral locations of Bangalore · Ongoing construction of hotels, malls, large Grade A residential developments · Other initiatives by Government, - Entire ORR Stretch to be a signal free road by end 2011, as Bangalore Development Authority is constructing 8 flyovers and 2 underpasses at various intersections. - Widening of Old Madras Road, Hennur Road & Banaswadi Road under progress.This ORR stretch of 31 kms exhibits differentcharacteristics and has varied potential andactivity for IT developments. Here, we havecategorized this stretch into 4 parts based onintersection with highway/major road:Stretch 1: Hebbal - KR PuramStretch 2: KR Puram – MarathahalliStretch 3: Marathalli – Sarjapur RoadStretch 4: Sarjapur Road – Silk Board Jn. ** Mutation Corridor: The subject stretch of ORR as been designated as “Mutation Corridor “under Revised Bangalore Master Plan, 2007. As per this provision, plots with frontage equal to or more than 12m are eligible for conversion of land-use to ‘commercial’ and the permissible FSI being in the range of 2.75 to 3.25 (depending on the plot size, frontage and abutting road width). In addition to the frontage, the entry and exit to the plot should be provided along the mutation corridor. Page | 6
  7. 7. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesThe following table summarizes the potential of these stretches for IT developments: Table 1: ORR-Potential for IT Developments Stretch 2: KR Puram to Stretch 3: Marathalli to Stretch 4: Sarjapur to Silk Attribute Stretch 1: Hebbal to KR Puram Marathalli Sarjapur BoardDistance Chart CBD (km) 9.5 13.5 15 11 Bangalore International Airport 32 42 47 52 (BIA)Land Availability Availability of land for IT Limited Available Available Limited developmentZoning and Reulatory Attributes Sarjapur to Iblur: Iblur Army Camp Residential; Industrial (General); Industrial Iblur to Sarjapur: Iblur Army Main Land-use Residential Industrial (Hi-Tech Zone) (Hi-Tech Zone) Camp Sarjapur to Silk Board: Residential 1.75 - 3.25 (Residential) 2.0 - 3.25 (Industrial - Hi Tech Permissible FSI 2.0 - 3.25 (Industrial - Hi Tech 1.75 - 3.25 (Residential) 1.75 - 3.25 (Residential) Zone) Zone)Resident IT Population within the catchment Approximately % of total Bangalore IT Population ~15% ~25% ~40% ~25% residing within 30 mins travel time from ORR stretchBusiness and Social infrastructure Koramangala, BTM Layout, Dollars Colony, RT Nagar, Kasturi Nagar, Banaswadi, KR Koramangala, HSR Layout, BTM HSR Layout, Madiwala, Frazer Town, Banaswadi, Kasturi Puram, Mahadevpura, Yemalur, Layout, Madiwala Bellandur, Bellandur, Jaya Nagar, Major residential areas (within Nagar, Mahadevpura, Kalyan CV Raman Nagar, Indiranagar, Marathalli, Yemalur, Brookefield, Banashankri, Bannerghatta 30 mins) Nagar, Nagwara, Hebbal, HBR Marathalli, AECS Layout, Sarjapur Road, Haralur Road, Road, Sarjapur Road, Haralur Existing/ Growing/ Upcoming Layout, Hennur Road, Bellandur, Karthik Nagar, Devarabeesanahlli, Road, Devarabeesanahalli, Thannisandra Road, Bellary Doddenakkundi, Whitefiled Kadubeesanahalli, Hosa Road, Kadubeesanahalli, Hosa Road, Road, Whitefield Road Road, Varthur Road Varthur Road, Hosur Road Hosur Road Royal Suites (Serviced Hotel Seven (4 Star) and Lotus Ivy (Business Hotel) Existing Hotels None Apartments) Park (Business Hotel) Orange Hotel (Business Hotel) Novotel IBIS (559 rooms) Park Plaza (237 rooms) Upcoming Hotels (Till 2012) Hotel Westin (246 rooms) None Palm Retreat (200 rooms) Marriott Shangri-La (450 rooms) Salarpuria (250 rooms) Upcoming Retail Malls None Soul Space Arena Soul Space Spirit None Overall Potential for IT Moderate Moderate High Low development Page | 7
  8. 8. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series Figure 3: ORR-IT Growth Corridor N To BIA Bellary Road Nagwara Hotel Westin 1 Hebbal BEL Sanjay Nagar Hennur Hebbal HBR Layout Hormavu To Hosakote RT Nagar Banaswadi Ramamurthy Nagar OMBR Layout Kasturi Nagar Frazer Town To Whitef ield KR Puram HP Mahadevpura 2 CV Raman Nagar 3 Soul Space Kartik Nagar DRDO Arena Kaggadaspura CBD 4 BEML Indiranagar AECS Layout NAL ISRO HAL BEML Layout Marathahalli Yemalur To Whitef ield Old Airport 5 Marathahalli Park Plaza NAL 6 Novotel IBIS 7 Legend 17 Salarpuria – 18 8 Merill Lynch STPI Parks Soul Space 9 Existing Malls / Hyper-markets Koramangala Spirit 10 16 Bellandur 11 15 SEZ Parks 12 13 INTEL Shangri-La Upcoming Malls BTM Layout Marriott 14 Palm Retreat Silk Board Jn. SEZ / STPI ParksSarjapur Legend Existing Serviced Hotels/ Serviced Apartments Sarjapur Road Apartments Under-construction STPI Parks STPI Parks HSR Layout UpcomingWIPRO Serviced Apartments Hotels/ Existing Malls / Hyper-markets Hosur Road Haralur Road To Electronics’ City To Sarjapur Legend Under-construction SEZ Parks SEZ Parks Upcoming D Organizations PSUs R & Malls STPI Parks Existing /facilities BTS STPI Hyper-markets SEZ Malls /Parks Upcoming Under-passes Existing Hotels/ Serviced Apartments SEZ Parks Residential Locations Upcoming Malls Under-construction STPI Parks Upcoming Hotels/ Serviced Apartments Flyovers SEZ / STPI Parks Legend Potential Growth Regions Existing Hotels/ Serviced Apartments Under-construction SEZ Parks PSUs R & D Organizations Under-construction STPI Parks STPI Parks Upcoming Hotels// Serviced Apartments BTS facilities Existing Malls Hyper-markets Upcoming Under-passes Under-construction SEZ Parks SEZ Parks PSUs R & D Organizations Residential Locations Upcoming Malls Upcoming Flyovers BTS facilities Parks SEZ / STPI Upcoming Under-passes Potential Growth Regions Existing Hotels/ Serviced Apartments List of Existing, Upcoming and Proposed IT Park Residential Locations STPI Parks Under-construction Upcoming Flyovers Serviced Apartments Upcoming Hotels/ 1 ManyataGrowth ParkSEZ Parks Potential Tech Regions Under-construction 7 PSUs R & D Organizations Prestige Tech Park 13 Global Technology Park Bagmance World Technology BTS facilities Upcoming Under-passes 2 8 RMZ Ecozen 14 Pritech Park Centre Residential Locations Upcoming Flyovers 3 Fortune City 9 Salarpuria Hallmark 15 Vrindavan Tech Village Potential Growth Regions 4 Ferns’ Icon 10 Salarpuria Touchstone 16 Adarsh Tech Park 5 Salarpuria Supreme 11 Salarpuria Softzone 17 Cessna Business Park 6 Prestige Exora Business Park 12 RMZ Ecospace 18 Umiya Business Bay Page | 8
  9. 9. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesIT developments along ORR · ORR stretch accounts almost 25% of the Table 2: ORR-Operational IT Parks Bangalore’s total IT space. Operational Area Name of the Park Category as of H1 2010 Key Tenants - The Hebbal to K.R. Puram stretch is (in million sqft) dominated by office space supply Hebbal to K.R. Puram from Manyata Embassy Business Manyata Embassy Park. STPI & SEZ 6.80 IBM, ANZ, Philips Business Park K.R. Puram to Marathahalli - Gopalan Enterprises’ Fortune City Bagmane World IT/ITeS SEZ and Bagmane World SEZ 1.00 EMC2 Technology Centre Technology Centre - Phase II will be Lenovo, Ferns Icon STPI 0.38 key driver for office space supply STMicroelectronics between K.R. Puram to Marathahalli to Sarjapur Marathahalli stretch. Further, RMZ Ecospace STPI 2.00 Accenture, AOL, Capgemini availability of land for future development assures more activity Pritech Ecospace SEZ 1.80 Quest, Firstsource, Symphony Services in short to medium term along this Vrindavan Tech Cisco, OPI, stretch. SEZ 1.48 Village T-systems Oracle, Nokia, - IT parks located between Prestige Tech Park STPI 1.00 Yodlee Marathahalli - Sarjapur Road SAP, Genpact, Akamai account for more than 55% of the Salarpuria Softzone STPI 0.90 Technologies total operational office space along Honeywell, Subex, Adarsh Tech Park SEZ 0.77 ORR. Large land parcels locked with KPIT Cummins existing developments ascertain Salarpuria Hallmark STPI 0.42 Teleca, Quest, Nokia trend to continue in future too. Salarpuria MTS, Mentor STPI 0.42 - Sarjapur - Silk Board Jn. stretch Touchstone Graphics, ARM witnessed no IT space activity Global Technology STPI 0.27 LSI Logic mainly on account of limited land Park availability and existing zoning Salarpuria Supreme STPI 0.21 Blue Coat, Motorola, Ocwen regulations. RMZ Ecozen STPI 0.11 Aricent · Currently, the Marthahalli – Sarjapur Road & Hebbal – KR Puram stretches account for 57% & 36% of the total Grade A office space Table 3: ORR-Upcoming IT Parks operational along the ORR. Expected Area Name of the Park Category · In future, KR Puram - Marthahalli stretch is Completion Date (in million sqft) Prestige Exora likely to witness more IT space activity and Building 1 STPI Q1 2011 0.67 almost 17% of the total IT space along ORR Adarsh Tech Park SEZ Q4 2010 0.50 would be along this stretch. Umiya Business Bay STPI Q1 2011 0.45 Vrindavan Tech Village SEZ Q4 2010 0.32 Phase II (2A) Page | 9
  10. 10. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series · Since 2004, over 18 million of office Table 4: ORR-IT Space Distribution space has been constructed on ORR. In Stretch Operational U/C Planned Total H1 2010, ORR witnessed absorption of Hebbal - K.R.Puram 36% 11% 15% 23% almost 1.5 million sqft and currently has a vacancy rate of 5% for office space (1 K.R.Puram - Marathahalli 7% 30% 22% 17% million sqft). This is expected to further Marathahalli - Sarjapur 57% 59% 63% 61% drop in H2 2010 to as low as 3%. Figure 4: ORR-Grade A Office Space Supply · Recent trend of IT companies moving to SEZs may be due to revised Direct Tax Code (DTC) published in Q2, 2010. As per Vestian 30.0 Estimate 27.8 revised draft of DTC, units coming up in 25.0 SEZs after the implementation of the sqft (in millions) 18.6 20.0 17.6 Code from April 1, 2011, would not be 15.0 entitled for Tax holiday. 10.0 · Lower vacancy rates and very little 5.0 3.3 0.4 3.2 construction activity (3.3 million sqft) has 0.0 made developers including Primal Projects Operational U/C Planned (2010 - 2012) (2012 and beyond) (Pritech Phase 2), Bagmane (World Supply Absorption Technology Center Phase 2), revisit the construction plans and commence construction of their respective projects in H2 2010. · Untill 2007, developments on the ORR were predominantly Software Technology Parks such as RMZ Ecospace, Manyata Embassy Business Park etc. Post 2008 the development trend on this stretch has been towards SEZ projects such as Vrindavan Tech Village, Pritech Park, Cessna Business Park, and Manyata Embassy Business Park (SEZ). · Around 55% of the operational space falls under SEZ category and accounts for more than 75% of operational SEZ space in Bangalore; considering 80% of the ORR’s future supply is in SEZ category the micro market will continue to dominate in this category of office space. Figure 5: ORR-Supply & Absorption Trend 8 10% 7 8% 6 sqft (in millions) 5 6% 4 Vestian Estimate 3 4% 2 2% 1 0 0% 2006 2007 2008 2009 2010 Supply (STPI) Supply (SEZ) Absorption (STPI) Absorption (SEZ) Vacancy in % Page | 10
  11. 11. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series · Planned supply is largely concentrated in Figure 6: Bangalore-Rental Value Trend the existing parks itself: 100 - Under STPI category, existing 80 Global Technology Park and INR/sqft/month Manyata Embassy Business Park 60 has land for future developments. New entrants include Prestige 40 Exora Business Park and Umiya 20 Business Bay. 0 - Under SEZ category, developers 2006 2007 2008 2009 H1 2010 of existing parks have more than CBD Suburban ORR Peripheral 300 acres of land for future development. Leading projects Table 5: ORR-Key Occupiers include Pritech Park, Vrindavan Area Occupied Tech Village, Adarsh Tech Park Occupier (in million sqft) and others. IBM & IBM Daksh > 1.0 · During global meltdown phase, Q4 2008 – Cisco Systems 2009, average rentals in ORR witnessed Honeywell drop of only 20% compared to 30 - 40% Philips > 0.5 drop in other PBDs of Bangalore. This EMC 2 signifies the balance in demand and Nokia supply of real estate space along ORR. Outsource Partner International · ORR predominantly houses multi- T-Systems tenanted IT developments with an AOL exception of Intel Campus which is an Accenture > 0.2 owned facility. Capgemini · Considered the hub of large IT Nokia-Siemens developments with 5 out of 20 existing IT ANZ parks having more than one million sqft LSI Logic operational spaces. This number is expected to increase to 8 by 2012. Table 6: ORR-Key Lease Transactions (H1 2010) Area Company Building (in sqft) Nokia Technologies Vrindavan Tech Village 1,26,000 Brocade Vrindavan Tech Village 90,000 Akamai Technologies Salarpuria Softzone 70,000 Symphony Services Pritech Park 60,000 Teleca Salarpuria Hallmark 43,000 Cynivwea RMZ Ecospace 42,000 Ocwen Financials Salarpuria Supreme 28,000 Page | 11
  12. 12. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor Series · IT/ITeS companies occupy more than 95% of the total operational space of which, 80% are Multi- National Companies (MNCs). · IT companies located in this micro market operate in software development, R&D and engineering services space. ITeS companies provide knowledge and back-end services in IT & Telecom, BFSI, and Retail and Healthcare verticals. Figure 7: ORR-Occupier Profile 1% 57% 42% IT ITeS Others 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Software Engineering Support IT and Telecom BFSI Healthcare Retail/ Others Product and R&D Services and Manufacturing/ Development Training Media & Entertainment Page | 12
  13. 13. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesFuture of ORR for IT developmentsORR is expected to continue to remain an attractive IT/ITeS growth corridor of Bangalore and improvefurther with planned completion of numerous flyovers/ underpasses between Hebbal and Silk-Board Jn. byend of 2011 and upcoming business & social infrastructure.Rentals of office space are expected to rise to some extent in short term mainly due to low vacancy ratesand fewer under construction projects; however, only nominal rise in rentals is expected due to existing highvacancy rates in PBDs such as Whitefield, Electronics City and others.The current most active ORR stretch Sarjapur Road – Marthahalli would be extended till KR Puram, asMarthahalli – KR Puram stretch is expected to witness high IT space activity in coming years.While ORR over the years has emerged as the most preferred office space destination, this micro marketforesees a few challenges including: - Uncertainty on future of tax holiday for SEZ units post implementation of DTC in April 1, 2011 may have adverse effect on ORR, atleast in short term, as most of the office space supply along ORR is scheduled under SEZ category. - Growth of ORR may slowdown due to the shift in focus towards Bangalore North for upcoming developments. Page | 13
  14. 14. Bangalore: Outer Ring RoadIT/ITeS Growth Corridor SeriesACRONYMSORR – Outer Ring RoadJn. – JunctionMNCs – Multinational CompaniesIT – Information TechnologyITeS – Information Technology Enabled ServicesCBD – Central Business DistrictSBD – Suburban Business DistrictPBD – Peripheral Business DistrictITPB – International Tech Park, BangaloreKIADB – Karnataka Industrial Areas Development BoardJV – Joint VentureEPIP – Export Promotion Industrial ParkSEZ – Special Economic ZoneSTPI – Software Technology Parks of IndiaDTC – Direct Tax CodeFSI – Floor Space IndexPSU – Public Sector UndertakingsBIA – Bangalore International AirportQ1 – Quarter 1 (January – March)Q2 – Quarter 2 (April – June)H1 – First Half (January – June)BTS – Built to SuitBFSI – Banking Financial Services and InsuranceR&D – Research and Development Page | 14

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