Why tech firms in India should consider North Bengaluru for expansion

Its proximity to the airport is a huge plus.

According to Colliers, since the early 1990s, Bengaluru has enjoyed a consistent supply of talent and high availability of office space. 

Due to challenges including overburdened infrastructure and limited vacancy in preferred submarkets, such as the Outer Ring Road (ORR), Central Business District (CBD) and Suburban Business District (SBD), Colliers expects office demand to shift to towards Whitefield, where quality supply is available at competitive rents, with the upcoming metro rail completion set to fuel demand further.

Colliers notes that the ORR is the epicentre of commercial office leasing in Bengaluru, accounting for 35% to 40% of Bengaluru’s total annual leasing volume. This area houses major MNCs and accounts for 40% of total office stock

Meanwhile, Whitefield is a self-reliant, established peripheral IT district with several Special Economic Zones and IT parks. Reasonable rents attract companies looking to scale up and enjoy cost arbitrage.

Here’s more from Colliers:

Real estate & workplace considerations

With captive centres and the BPO (Business Process Outsourcing) sector dominating the office landscape in India, space per person has fallen from more than 150 square feet in the early days to around 70 to 80 square feet today. 

After COVID-19, we expect this figure to increase and settle in the 100 to 120 square feet per person range.

Given increased use of technology within the workplace and a more flexible approach from companies, we expect 20% to 25% of the workforce to be able to work from anywhere over the medium-to-long term. 

Outlook & recommendations

Traffic and accessibility during peak hours are a challenge across most of the city. This requires occupiers to evaluate residential locations, commuting times and district-level transport links when determining locations for expansion. 

Currently, North Bengaluru (defined as the micromarkets of Hebbal and Yelahanka) is not a technology cluster. However, we recommend that occupiers consider this location for expansion and consolidation as infrastructure improves and office stock becomes available. 

After the opening of the new airport in Devanahalli in 2008, real estate development has picked up in the northern belt with various IT parks and planned Special Economic Zone supply. Connectivity is good, but social infrastructure is still in the development stage. New supply over five years is highest after the ORR.