ilf&s tev sample

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TECHNO ECONOMIC VIABILITY REPORT

TEV Report

IL&FS Property Management and Services Limited

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Contents

SECTION 1 INTRODUCTION TO THE STUDY

CHAPTER 1 : STUDY OVERVIEW CHAPTER 2 : BANGALORE – THE IT HUB OF INDIA CHAPTER 3 : ADVANTAGE BANGALORE CHAPTER 4 : IT DEVELOPMENT FUELING REAL ESTATE GROWTH IN

BANGALORE

SECTION 2 TECHNO – ECONOMIC VIABILITY OF IT PARK IN JIGANI – BOMMASANDRA LINK ROAD

CHAPTER 5 : LOCATION AND ACCESSIBILITY CHAPTER 6 : NEIGHBOURHOOD ANALYSIS OF THE STUDY AREA CHAPTER 7 : REAL ESTATE DEVELOPMENT AROUND THE STUDY AREA CHAPTER 8 : SWOT ANALYSIS OF THE STUDY AREA

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SECTION - I

INTRODUCTION TO THE STUDY

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CHAPTER - 1

STUDY OVERVIEW The Company, having base in Hyderabad has been allotted 8 acres of land for development of IT Park in the upcoming Industrial area on Jigani – Bommasandra Link Road. The Company has leased the land from KIADB for a period of 6 years. According to agreement clauses:

• The lease shall be converted into a sale subject to fulfillment of all terms and conditions. • The conversion of lease into sale shall also be subject to the utilization of minimum 50% of

the total plot area in accordance with the proposals furnished. • Within a month of date of approval, the company has to submit the comprehensive plans for

land utilization, building, sheds, etc., for approval from statutory authority.

• The company has to start civil work within 3 months of allotment. • Within a year of allotment, the company has to complete civil work and formally start its

operations. On this regard, Techno – Economic Viability (TEV) study has been taken up to with the aim

• To assess the feasibility of locating IT Park in Jigani – Bommasandra Industrial area • Development Constraints and Future potential of the Jigani – Bommasandra Industrial area

in terms of IT Growth. Scope of Work

• Location and Accessibility analysis of the site. • Neighbourhood Analysis. • Physical and Social Infrastructure Analysis • Real Estate Developments in the area. • Potential for IT development. • Identifying Strength, Weakness, Opportunities and Threats (SWOT) for Development of IT

park on the Study Area. • Financial Analysis.

Limitation

• The allotment letter states the allocation of this plot to the company for Software Development industrial use. However based on interaction with concerned official at IL&FS the study here is carried out for an IT Park.

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CHAPTER - 2

BANGALORE – THE IT HUB OF INDIA Bangalore renamed as Bengaluru, is the capital of one of the most prospering states, Karnataka. The city of Bangalore, with a population of over 6 million, is the 3rd largest city in India (5th largest metropolitan area) and the 27th largest city in the world. Bangalore is located on the Deccan Plateau, almost in the centre of the Indian peninsula. At an elevation of 920m, Bangalore is known for its mild, "salubrious" climate throughout the year and until recently was regarded as a "pensioner's paradise" because it was a small and sleepy town, by Indian standards. Today the city of Bangalore is recognized the world over as the “IT Capital of India”. Ever since the city discovered its potential as a high-tech city in the early 1980s, Bangalore has seen a major technology boom and is today home to more than 250 high-tech companies including homegrown giants like Wipro and Infosys. In 1998, News Week magazine ranked Bangalore among the world’s “Hottest Tech Cities”. Business Week placed Bangalore among the “Global Hot Spots of the 21st Century”. Further, the United Nation’s Human Development Report-2000 recognises Bangalore as the fourth leading hub of technological innovation, ahead of many cities in USA, Europe, Japan, China and South East Asia. This has given Bangalore the rightly earned status of 'Silicon Valley' of India, solely accounting for 55 per cent of India's total exports of software. As an IT Destination a recent research study based on various parameters ranks Bangalore as under: Parameters Total score / overall Rank India’s top tech cities 66.2 Zonal stack up in India 1 Manpower availability 1 Environment & life style 1 ICT Infrastructure availability and usage 1 The growth of the software industry in Karnataka has been spectacular. In the year 2001 Bangalore saw a cumulative investment of around US $1.3 billion in the software industry. About 146 new software industries came up during 2001. 2002 saw addition of another 110 IT industries. At present there are more than 1500 Companies are operational within the state employing more than 100,000 professionals. There has been a constant increase in number of companies over the years.

1. 1999-2000 - 782 companies 2. 2000-2001 - 928 companies 3. 2001-2002 - 1038 companies (as of May 2002) 4. 2002-2003 - 1154 companies (as of April 2003)

The number of IT/ITES companies setting up shop in Karnataka is rising by the day, but a majority of them (77%) are very small in size — with export revenues of less than Rs 10 crore. The total IT export was Rs 37,600 crore ($8.3 bn) in 2005-06. There are five companies in the state with sales of over Rs 1,000 crore. The two biggies, Infosys Technologies and Wipro, alone totaled up figures of $2 bn each (Rs 18,000 crore combined) last fiscal. While both have a presence outside the state, a significant portion of their sales comes from their Karnataka businesses. At last count, there were 177 companies with exports of Rs 10-50 crore. Looking at the number of Software Technology Park (STP) units which plays a big role in GSDP of Karnataka and the approved ones, a vast majority of them had IT exports of less than Rs 10 crore. The total number of software technology parks in 2005-06 was 1721, of which 201 were registered during the financial year. Below is a break up of the number of IT companies under STPI in Bangalore classified by type of activity

• Integrated circuit design (IC) - 46

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• Communication software - 108 • Systems software - 166 • Application software - 293 • Service companies - 303

The IT industry's composition in Bangalore shown in the diagram below indicates that a large percentage of the companies are involved in high technology software development. It is expected that IT exports from Karnataka will touch Rs 49,000 crore ($10.8 billion) in the current financial year.

Statistics - Software Exports from Karnataka Year Value of Export

• 2002-03 Rs. 12350 crore • 2003-04 Rs. 18100 crore (US$ 4,022 million) • 2004-05 Rs. 27600 crore (US$ 6,272 million) • The export growth during 2004-05 over 2003-04 figures was 52%.

Segment wise Exports during 2004-05

• Enterprise application – 52% • Technology Software – 33% • ITES / BPO -13% • Others - 2%

Export of ITES / BPO Sector

• 2003-04 - Rs. 2237 crores (US$ 497 million)

• 2004-05 - Rs. 3500 crores (US$ 795 million

Growth in Software Export of India (1998 – 2005)

Types of Software Industries in Bangalore

33%

17%10%

13%

17%

10%General Software

Application Software

IT Enabled Services

IC Design

System Software

Communication Software

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BENEFITS TO INVESTORS The explosive growth of IT in Karnataka has been helped in no small measure by the progressive policies of the Government. The Karnataka Government offers special assistance, incentives and concessions for the Information Technology industries depending upon investment category of industries. Basically classification for benefits has two categories- industries with investment up to 100 crores and more than 100 crores i.e. Mega projects. Some of the benefits that the Government offers investors which have investments in fixed assets up to Rs. 100 Crores in the Information Technology sector are listed below:

Entry Tax Exemption Information Technology industries will be exempt from payment of Entry Tax on computer hardware, computer peripherals and other capital goods including captive power generation sets, during implementation stage which can be extended up to 5 years from the date of commencement of implementations.

Power Tariff Concessions

• Software industries will be treated as industrial (and not commercial) consumers and electricity tariff applicable to the industrial consumers will be levied on such industries.

• As continuous uninterrupted and quality power supply is one of the prime requirements of sustenance and growth of Information Technology industries, these industries will be given priority in the sanctioning and servicing of power. The IT industries will also be exempt from power-cuts without any time limit.

• Captive power generation sets installed by the Information Technology industry will be eligible for the following incentives.

• Total exemption from payment of electricity tax without any time limit. Mega Projects: The concessions detailed above are primarily meant for IT companies where initial investment in a new company, or in expansion, modernization is less than Rs. 100 crores. If the investment is more than Rs. 100 crores, the Government considers that project as a Mega project and a special set of initiatives and concessions will be worked out with reference to the needs of the company. In addition, a project that employs more than 1000 employees will also be considered as a Mega project and these concessions are applicable for both the new units as well as for existing units that create additional employment by incremental investment. The other incentives for all IT / ITES industries are as follows:

• Quick Clearances from Pollution Control Board: Karnataka State Pollution Control Board has simplified the procedure for seeking clearances under the Air Act and the Water Act for the software companies that use captive DG Sets.

• Concessions on Company Registration Charges • IT companies taking up expansion, diversification, and modernization get concessions on

registration charges.

• Relaxations in FAR for all IT projects set up outside the limits of the municipal corporations in the state. This concession would be available to the projects notified by the Department of IT that set up excellent infrastructure, water, uninterrupted power; dedicated connectivity etc. A maximum relaxation up to 50% of the existing FAR would be available.

IT Parks: Karnataka is a pioneering state where several International Standard IT Parks have already been established. For instance, International Technology Park was established in the year 1997. This Park was established through a joint venture of Government of Karnataka, TATA group and Singapore Consortium. This park is the largest in the country with 12 lakh Sq. ft. space, has world class infrastructure facilities / telecom connectivity, power security, housing etc. The Government has offered special incentives and concessions for IT Parks certified by the IT Department having a minimum built up area of 1 lakh sq. ft. Concessions announced are mentioned below:

• Exemption from payment of entry tax on machines, equipment, capital goods and construction material procured for implementation of infrastructure projects, for a period of 3 years or till the date of completion of the project, whichever is earlier, subject to the

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condition that each invoice should be for not less than Rs.25 lakhs (Rs.1 lakh for construction materials).

• Exemption from sales tax/works contract tax arising in the construction of the infrastructure facility for a period of three years or till the date of completion of the project, whichever is earlier.

• 50% exemption from payment of stamp duty and registration charges on the first sales of land in the case of IT Parks.

These attractive incentives coupled with aggressive business strategy by State Govt. to promote growth of IT, ITES and BO industry has lead many national and international developers to establish their facility in Bangalore. Today Bangalore is the undisputed capital of IT Industry. With Bangalore developing at a brisk pace there is a healthy interest in its Real Estate market. The ITES, BPO, Bio-Tech, R & D and Life Sciences industries are primary reasons for this boom in the real estate market of Bangalore. Not only has it increased the capital and rental values of commercial property, it has fuelled a demand for housing for its workforce. According to the recent market studies Bangalore continues to remain the most favored IT/ITES/BPO destination in India and is emerging as a premier R & D destination due to the availability of the Talent, the culture of the city, the cooperation of the people and the weather.

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CHAPTER - 3

ADVANTAGE - BANGALORE

BANGALORE: A NATURAL LOCATION FOR THE SOFTWARE INDUSTRY Bangalore has been described as "a gateway to new global frontiers". Its growth to become another Silicon Valley started with establishment of electronic and aeronautic industries in 1956 – 1960. Because of its dust-free environment, large public sector undertakings like Bharat Electronics Limited (BEL), Hindustan Aeronautics Limited (HAL), Hindustan Machine Tools, Indian telephone Industries and Bharat Heavy Movers were established by the Government of India in Bangalore, along with national defense research laboratories and the Indian Institute of Science. The academic community in Bangalore contributed to the vibrant nature of these industries and to the ancillary businesses. In the last 15 to 20 years many private sector electronics companies have sprung up in or moved to Bangalore to take advantage of the pool of talent that is resident there. These advantages made Bangalore a natural location for the computer and IT industry. As software development has superseded the production of hardware in India, Bangalore has become a key location for the software industry in India. Now most of the top computer and software companies in the world have wholly owned subsidiaries or joint ventures with Indian companies that are based in Bangalore, including IBM, Oracle, Novell, Fujitsu, HP, SAP Labs, Huwaei and Flextronics etc. Bangalore also is headquarters to a large number of Indian software companies. Many other multinationals get much of their software development work done in Bangalore. Siemens, Deutsche Bank, Motorola, Citicorp, VeriFone etc. all have branches in Bangalore where software development occurs for their entire system. There was a concerted effort amongst policy makers to create an environment in Bangalore where high-tech industries would flourish. Karnataka is the first state that announced IT policy in the year 1997. This policy has acted as an important catalyst for the growth of IT industry. One element that may account for the success Bangalore has had in attracting high-tech industries is the fairly stable relationship between the state government and the private sector. Despite changes in government, some fairly drastic in terms of policy stance, industrial policy in the state has been fairly consistent. In the mid-1980s, the Karnataka government in conjunction with the Department of Electronics created an Electronics City, or KEONICS as it is called, 18 kilometers outside Bangalore on 330 acres of land. Govt. of Karnataka provided a lot of incentives to attract the electronics industry in the form of financing, tax-relief offered by the government. This initiation was a success. Later on these incentives were extended to software when it became apparent to the State Government that the software industry was going to be an important source of revenue. Throughout the 1990s, the State Government has been quite successful in marketing Bangalore. It has supported initiatives such as the collaboration between the European Commission and the Department of Electronics of the Government of India called 3SE, Software, Services, Support and Education Centre Limited, which was launched in June 1994, by providing the office space and infrastructure. These efforts have served to further encourage investment in this industry in the last few years. To provide thrust to growth of Industries the Govt. has formulated a policy vide its order no. CI 167 SPI 2001, Bangalore dated 30-6-2001where it has extended incentives and concessions in promoting hi-tech industries in key sectors like Electronics, Telecommunication, Information Technology, Precision Engineering, Automobiles, Readymade garments, Bio Technology and Food Processing have been noteworthy. The state has also witnessed considerable Foreign Direct Investment (FDI) both in Bangalore & other parts of Karnataka. Another example of the supportive policy environment is the Karnataka State Industrial Investment and Development Corporation Ltd (KSIIDC), which has been around since 1964. KSIIDC is an investment promotion agency. It is involved in project identification and provides information, financial assistance through a variety of schemes as well as assistance in obtaining the necessary clearances.

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Statutory Bodies Working Towards Progress of Karnataka

Department URL

Central Ground Water Board http://cgwbswr.kar.nic.in

Central Silk Board http://indiansilk.kar.nic.in

Coffee Board http://www.kar.nic.in/exportcoffee

Employees' State Insurance Corporation, Karnataka http://www.esickar.gov.in

Karnataka Industrial Area Development Board http://www.kiadb.kar.nic.in

Karnataka Land Army Corporation http://www.klac.gov.in

Karnataka Renewable Energy Development Ltd http://kar.nic.in/kredl

Karnataka State Building Center (KARNIC) http://www.nirmithi.kar.nic.in

Karnataka State Finance Corporation http://ksfc.kar.nic.in

Karnataka State Pollution Control Board http://kspcb.kar.nic.in

Karnataka State Small Industries Corporation Limited http://www.kssidc.kar.nic.in

Karnataka State Tourism Development Corporation http://kstdc.nic.in

Rajiv Gandhi Rural Housing Corporation Limited http://ashraya.kar.nic.in

Southern Regional Electricity Board http://www.sreb.kar.nic.in

The Roerich & Devika Rani Roerich Estate Board http://www.roerich.kar.nic.in In Brief – Bangalore as an investment destination boosts of:

INDUSTRIAL DEVELOPMENT IN BANGALORE Karnataka has always been at the forefront of industrial growth in India. With its inherent capabilities coupled with its enterprising citizens, Karnataka provides the ideal choice for investment opportunities. In its efforts to develop a strategy for industrial growth and development, the State Government is concentrating on promoting the development of industries in which the State already has a competitive edge. Key sectors in Karnataka as per contribution of SGDP include information technology, electronic, engineering and steel.

• Fast Start Up - Infrastructure is already in place. • Largest availability of Managers and Staff in India with work experience in MNC/overseas

companies • Largest presence of Multinational and Indian IT companies. Bangalore produces 60% of

India's IT exports. Over 300 software companies (including 100+ multinationals) are based in Bangalore

• All the major IT players have selected Bangalore and have existing and expanding operations here including Oracle, IBM, Intel, SAP, Texas Instruments, General Electric, Motorola, HP, Sun Microsystems, Novell, AOL Netscape

• Bangalore has the largest number of educational institutions in India. Sixty three percent (63%) of all Indian IT colleges are based in South India - 91 in Bangalore alone

• Largest and widest availability of skilled people in India. Bangalore boasts 150,000+ software professionals. Expect 5,000 responses to a newspaper job advertisement or 500 people per day at 'walk-in' interviews

• The State Government is the most IT friendly and IT experienced in India • Government departments, such as the Software Technology Parks of India (STPI), are

businesslike, helpful and responsive

• Direct flights from Bangalore to/from Frankfurt and Singapore • Lower real-estate cost than Mumbai (Bombay) and Delhi. On a par with Hyderabad and

Chennai (Madras) • Bangalore is the preferred relocation city for people from all over India • Cosmopolitan city with a significant expatriate community. Excellent climate, good

international schools, shopping, hotels, hospitals and recreation facilities • No communal tensions. • Best network of support industries and services in India

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To facilitate Industrial development, Govt. of Karnataka has set up Karnataka Udyog Mitra (KUM) to helps entrepreneurs to identify, short list and decide the location, depending on the products and other parameters. Karnataka Industrial Area Development Board (KIADB), Karnataka Electronics Industries Development Corporation [KEONICS] and Karnataka State Small Industries Development Corporation [KSSIDC] are another organisation of the Government, providing ready-built industrial sheds for the use of investors. KIADB is the major statuary body gearing up industrial area development in Karnataka. KIADB is a wholly owned infrastructure agency of Government of Karnataka, set up under Karnataka Industrial Areas Development Act of 1966. KIADB holds pride in being the first government organisation in Karnataka to obtain ISO 9001 certification in the year 1997. The major aims and objectives of the Board are to:

• Promote rapid and orderly development of industries in the state. • Assist in implementation of policies of government within the purview of KIAD Act. • Facilitate for establishing infrastructure projects. • Function on corporate lines, with “No Profit – No Loss” policy.

KIADB - as a premier industrial area developer

From its inception the KIADB has acquired 30,002 acres of private land and formed 98 industrial areas spread all over Karnataka and has also made available land to 350 stand alone industries. KIADB has also acquired lands to cater the specific needs of individual industrial units (Single Unit Complexes). Till date, KIADB has formed 95 industrial areas spread all over the State, and acquired land for nearly 290 Single Unit Complexes ensuring balanced industrial development in all regions with well thought of infrastructures and unique features. The Board also acquires land for infrastructure projects of the Government. It is the authority responsible for setting up industrial area in Karnataka. Major functions of KIADB are:

• Acquire land and form industrial areas. • Provide all infrastructures to such industrial areas. • Acquire land for Single Unit Complexes. • Acquire land for Government agencies for their schemes and infrastructure projects • Promote projects of public importance in joint venture with organizations of international

repute. Few prominent industrial areas:

• Peenya, Electronic City, Export Promotion Industrial Park (EPIP) in Bangalore. • Hebbal in Mysore. • Baikampady in Mangalore. • Tarihal in Dharwar. • Kakati in Belgaum. • Auto Complex in Shimoga.

World's leading Companies have risen up in glory on the infrastructure set by KIADB. This apart, KIADB has envisaged several innovative projects up its sleeve like Agro -Tech Parks, Apparel Park, Auto Parks, Hardware Park, Bio-Tech Park, EPIPs, and Special Economic Zones etc. Within Bangalore district, KIADB has developed around 18 Industrial areas. Government of India has brought out a scheme namely ASIDE through Ministry of Commerce, New Delhi to facilitation of exports and growth in the states. KIADB with a long-term vision has identified three roads for development under this scheme.

• Roads leading to EPIP in Bangalore. First road to an length 10 Kms., leading to EPIP through Hoodi junction from existing Bangalore Airport and second road to an length of 8.5 Kms. from K.R.Puram to Hope Farm. The above said roads have been widened and improved with high quality work and are provided with Sodium Vapour street lights.

• Road leading to Bidadi IA in Bangalore. Road leading to Bidadi Industrial Area from State Highway to a length of 3 Kms. has been developed under this scheme benefiting both industrialists and road users of that region.

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• Roads linking Jigani IA to Bommasandra IA in Bangalore. Link road between Jigani Industrial Area & Bommasandra Industrial Area connecting to NH-7 is developed under this scheme. The Karnataka Industrial Area Development Board has identified 712 acres of land on both sides of Jigani-Bommasandra Link Road on the outskirts of the city for setting up industrial units. This road reduces the distance between these two industrial areas by nearly 12 Kms. Thus making it convenient for industrialists to commute between two Industrial Areas and linking Jigani Industrial Area with NH-7. Around 214 companies have been allotted land along Jigani – Bommasandra Link Road. Looking at the IT growth in Bangalore and the excellent connectivity of the area to existing Electronic City and upcoming IT Corridor along Outer Ring Road connecting Sarjapur and Whitefield, many developers are proposing IT Development in Jigani-Bommasandra Link Road.

DRAWBACKS OF BANGALORE

Bangalore's global ambitions are being threatened by its crumbling infrastructure. Twenty years ago, Bangalore's population hovered at about 3 million, and there were 300,000 vehicles on the road. Today, according to city data, Bangalore's nearly 7 million residents drive 2.3 million vehicles, registering new ones at a rate of about 700 a day. And while a long-awaited road ringing the city was completed in 2003, it failed to alleviate downtown traffic. Three more such roads are planned, including but yet to be completed.

The proposed metro rail system, which was supposed to take three years to build and be finished this year, is still on the drawing board and mired in controversy. The same goes for a new international airport, a long-standing dream of the tech sector. Another concern is the city's overtaxed power grid. While officials say the power supply is adequate, every IT company has a generator for when power goes out. To make matters worse, the city's storm drains were overwhelmed by last year's severe monsoon season, leading to heavy flooding throughout the city.

Another blow to Bangalore came in February, when officials revealed that a $3 billion semiconductor plant, known as Fab City, would be built in rival Hyderabad. The decision to build in Hyderabad was widely attributed to Bangalore's infrastructure shortcomings. Several other companies like Siemens & Honeywell are deciding to set shop in other cities due to similar reasons.

Bangalore's jam-packed streets, rolling power outages, rising salaries and deteriorating quality of life -- and the emergence of smaller, cheaper Indian cities -- mean that the city that has is now in danger of becoming a victim of its own success. Other than infrastructure the other major drawback is the high cost of living and, increasing costs are making it a difficult proposition to live in.

The infrastructure in the slums of Bangalore, which has changed little during the IT boom, helps explain the resentment directed at the city's technical elite and their demands. As Solomon Benjamin, an urban studies expert and advocate for Bangalore's poor, points out, the IT industry accounts for less than 10 percent of the city's employment. If IT does go elsewhere, Benjamin said, "it would be a blip in Bangalore's history. A significant blip, perhaps. But a blip."

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Office Absorbtion Trend Bangalore

0

1

2

3

4

5

6

7

8

9

1999 2000 2001 2002 2003 2004 2005 YTD 2006

Millio

ns

Sq

. ft

.

CBD Off CBD Suburban Peripheral

CHAPTER- 4

IT & ITES FUELING REAL ESTATE GROWTH IN BANGALORE

Bangalore is the acknowledged first choice for all IT/ITES companies and the city’s economics have received a boost with the spurt in outsourcing of services. The bursting job market, high salaries, and easily available home loans have abetted the meteorically rise in real estate prices. The Bangalore city continues to enjoy the status of most preferred city' by the new and existing companies whose sentiments range from "We get what we want" to "It is desirable more is done to infrastructure; but yes we are comfortable here." COMMERCIAL MARKET; It is primarily driven by IT and ITES/ BPO sector with requirement of large floor plates, state of the art facilities and nominal rentals. Consolidation of real estate portfolios by both Indian and multinational (MNC's) information technology (IT) companies have pushed real estate markets in Bangalore city to vigorous activity. In this sector, both software and hardware has been the biggest contributor for the growth in central business district (CBD), off-CBD and suburban areas. Today, the Indian and MNC’s companies, who are in IT related business, have paved the way for a lot more peer groups to absorb several million square feet of space. Demand & Supply: Bangalore continues to have an edge over other metros in terms of office space take-up. IT/ITES sector remains to be the major demand driver for the city and demand is largely characterised by built-to-suit requirements, though concern for infrastructure is rising amongst IT/ITES/BPO companies. Almost 75% of the total space leased in the city over

the past one year has been in suburban and peripheral locations of Bangalore these locations. The IT corridor along Sarjapur- Marathahalli Ring road and Whitefield has witnessed considerable amount of interest from developers as well as prospective occupants. In the CBD and off CBD locations of M.G. Road and Cunnigham Road though options have been limited the demand for Grade A commercial

space has been substantial. Office space absorption in Bangalore continues to rise exponentially with an increase of over 90% between 2003 and 2006. Approximately 2.9 million ft² of supply was delivered across all micro markets in the second quarter of 2006 taking the total fresh supply infusion in 2006 to 5.8 million ft². The suburban and peripheral locations remained the primary locations in terms of real estate development accounting for approx. 98% of the market supply in the second quarter.

Supply of Office space by year 2008

ORR

31%

Bannerghatta Road

33%

Whitefield

8%

Electronic City

13%

M.G. Road/ Cunningham

Road

4% Vittal Mallya Road/

Koramangala

11%

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The year 2006 is expected to witness an addition of approximately 7.5 million sq ft of grade A/B+ stock. Developers like Salarpuria, RMZ, Prestige, Adarsh, Divyasree, Bagmane and Vikas Telecom are executing projects of 1-2 million sq ft each in suburban and peripheral locations, a major portion of which in Whitefield and Outer Ring Road. The total super built up area in the first quarter has totaled to 2.5 million sq ft. With saturated areas like Indiranagar and Koramangala commercial developments have shifted to peripheral areas like Outer Ring road, Old Madras Road, JP Nagar,

Sarjapur Road and Bellary Road. The suburban and peripheral locations continue to attract maximum demand, accounting for 43% each of the total absorption, with Off CBD locations accounting for the balance 14% demand. CBD locations did not record any significant transactions. The supply of premium quality commercial space increased considerably in last quarters with the availability of the International Technology Park (Whitefield), supplying approximately 1.2 million square feet. A total cumulative area of 20 million sq. ft of space will be available to corporates by end of 2008. Peripheral Market will contribute almost 85% of the total supply of office space. As observed earlier the new supply is skewed towards the suburban and peripheral locations. Capital and Rental Values: Owing to continued robust demand, rentals of prime commercial properties in most micro markets have remained stable or have marginally strengthened from last quarter with the exception of certain peripheral locations which have witnessed a downward trend owing to excess supply of stock. The capital rate for office space in Airport Road is between Rs1,800 and Rs2,200 a square foot; in Cunningham road, it is between Rs 2,000 and Rs3,000 a square foot; for office space in Brigade Road, the rate is between Rs 4,000 and Rs 5,500 a square foot; in Richmond Road, office space comes at between Rs 2,400 and Rs3,450 a square foot; while in Vittal Mallya Road, it is priced at Rs 3,500 to Rs4,600 a square foot.

Some of the corporates, which recently announced their plans, are as follows:

• Royal Dutch Shell is planning to set up its new technology research centre in Bangalore. This would be their first set up in India and third centre in the world. Shell intends to hire 1,000 people and is expected to start operations in 2006.

• Spirit Aero Systems, one of the world’s largest independent suppliers of structures for commercial aircraft, and Infosys have announced their plans to setup an Engineering Center at the Infosys campus in Bangalore.

• RelQ has announced plans to invest US$3 Million to develop infrastructure for test labs. • Siemens has announced its intention to expand in South India. They are constructing an

additional tower next to the existing facility in Electronic city to accommodate another 1000 people in addition to the existing 2000 staff.

• Accenture has announced major plans for India, China and Philippines, which is likely to double their head count in the next 2 – 3 years. Currently they have 16,500 employees across 5 cities in India. The future expansion strategy will be multi-city.

• Wind River systems have announced the opening of its development centre in Bangalore. The centre will focus on new product and will also accommodate a sales office.

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Future Outlook: According to realtors, in last two years, annual absorption rate ranges between 3.2 million sq. ft to 4 million sq. ft. With a huge supply of 20 million lining up by 2008, it is going to hit the Bangalore market. The appreciation of property market has slowed down and lease rates are going down due to excess supply specifically in peripheral areas. RESIDENTIAL MARKET: The Bangalore residential market is one of the fastest growing residential markets in India with a greater stress on quality developments and a higher percentage of demand for apartment developments. Presently the residential sector is dominating the South, West and Southwest part of the city but the eastern part of the city is witnessing an increased residential activity as a spin off from the IT related commercial developments. The residential market is in an upward cycle, both in terms of supply and demand. In the central areas (off Cunningham Road, Brunton Cross Road etc.), a number of developers are constructing smaller apartment complexes (8-16 units) targeting high-end clients. In comparison, the suburbs (Whitefield, Bannerghatta Road and the ORR) are witnessing the construction of an eclectic mix of residential formats: High-end villas, row housing townships as well as apartment complexes, with the residential real estate market coming up with tremendous growth potentials, various entrepreneurs-backed real estate companies are coming up with successful residential layouts in Bangalore. With the best international facilities, large-scale land development and club amenities, they have actually dramatically changed the look and feel of the Bangalore real estate market. The boom in the Bangalore Real Estate seems to be end-user driven because of tax concessions available to the first-time home buyer, low interest rates, higher disposable incomes and the disintegration of joint families. The built-up area rate on Airport road for residential projects is between Rs2,400 and Rs3,250 per square foot; in Banashankari and Fraser Town, it is between Rs2,500 and Rs4,500 per square foot; in Cox Town and Malleshwaram, it is between Rs3,800 and Rs4,800 a square foot; in Jayamahal and Koramangala, it is between Rs3,750 and Rs4,500 a square foot; in Sadashivnagar it is between Rs3,800 and Rs5,000 a square foot; and in Whitefield and Yelahanka, it is betweenRs2,400 and Rs3,200 a square foot. Summary on Residential Market in Bangalore

• The residential market witnessed strong end user and investor demand especially in the south-eastern, eastern and northern quadrants of the city over the last six months. Not only has there been an increase in apartment prices but also in land values in select suburban areas.

• With various constraints in the form of construction bye laws, ceilings on FSI within the CBD area, etc, the city has gradually extended towards suburban areas where land rates are comparatively more affordable. Among the various suburban areas, the locations experiencing growth are Whitefield, Yelahanka, Kanakpura road, Bellary Road, Sarjapur Road, and Mysore Road.

• In the central areas (Lavelle road, Brunton Cross Road), a number of developers are constructing smaller apartment complexes (8-16 units) targeting high-end clients. The suburbs (Whitefield, ORR, Hebbal, and Devanhalli) are witnessing the construction of an eclectic mix of residential formats: High-end villas, row housing townships as well as apartment complexes.

• With the take off of the International Airport, Devanhalli is becoming the favored destination. North Bangalore is likely to be the key growth area with the main thrust being on Bellary Road, Yelahanka, and Devanahalli.

Some of the major Prime Residential projects which were launched in 2006 are

• Sobha Azalea (26 duplex apartments, BUA of 2,464–2,940 sqft for INR 3,280 per sqft) at Harohalli (Yelhanka)

• Sobha Althea (180 apartments, BUA of 3 BHK, 1,936–2,125 sqft and 4 BHK, 2,812–4,260 sqft for INR 2,506–2,911 per sqft) at Harohalli (Yelhanka)

• Sobha Chrysanthemum (509 apartments, BUA of 3 BHK,1,699–1,855 sqft for INR 2,515 per sqft) at Thanisandra

• Alpine Viva (475 apartments, BUA of 2 BHK, 1,307 sqft; 3 BHK, 2,125 sqft; 4 BHK, 2,495 sqft for INR 1,900 per sqft) in Whitefield

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• HM Symphony (304 apartment units, BUA of 2 BHK, 1,316 sqft; 3 BHK, 1,717 sqft for INR 2,090 per sqft) in Kasavanahalli, off Sarjapur Road

• Nitesh Estates’ Buckingham Gate (12 apartments priced at INR 12,000 per sqft) • Sobha’s Amantha (7 apartments, built-up area (BUA) of 4 BHK, 4,029–5,271 sqft, priced at

INR 14,070 per sqft) • Purvankara Developers’ Purva Vanezia (1300 Apartment Units) in Yelhanka New Town

(North Bangalore), priced at Rs. 2240 per sq ft • Renaissance Exotica (238 Apartment Units) in Jakkur (North Bangalore), priced at Rs. 2150

per sq ft OUTLOOK – BANGALORE REAL ESTATE The Bangalore Real Estate Prices sector is burdened with multiple taxes such as work contract tax, service tax, high stamp duties and an increase in the cost of raw materials. While the pot-holed inaccessible roads and the pitiable infrastructure could translate into a decline in land rates, the Government of India’s liberalization measures will be a boon for the realty sector. Some price correction is projected to happen with rising supply. The Karnataka state government has cleared the Hi-Tech City project proposed by the Bangalore Development Authority but the latter is hit by non-availability of land as private land developers have acquired a portion of land allocated for the project five years ago. The project is part of the IT Corridor that is aimed at decongesting the city and creating an exclusive township for the IT sector between Sarjapur Road and Hosur Road. The boom has gained the interest of foreign companies. Royal Indian Raj International Corporation is investing $2.9 billion in a single real-estate project called ‘Royal garden City’. Morgan Stanley Real Estate has invested about $68 million in Mantri Developers Pvt. Ltd, a private real estate developer based in Bangalore. Top developers such as Prestige, Sobha and Hiranandani are scouting for properties in Bangalore while Emaar of Dubai is trying to acquire land to develop its world-class townships. The who’s who of global real estate is scrambling to buy every centimetre of Bangalore land, which has acquired the status of a potential goldmine. With the demand for retail, commercial, office and residential real estate in Bangalore touching dizzying heights, Bangalore’s property market is projected to boom in 2006 even as 2005 was an excellent year. Ernst and Young have predicted that foreign direct investment in the property market in India will touch $2 billion in 2006, and Bangalore will garner bulk of the investment!

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SECTION - II

TECHNO – ECONOMIC VIABILITY FOR SETTING UP IT PARK

IN JIGANI – BOMMASANDRA LINK ROAD

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CHAPTER - 5

LOCATION AND ACCESSIBILITY ANALYSIS OF THE STUDY AREA

Located in the southern part of the Bangalore metropolitan area, the Industrial area between Bommasandra and Jigani is in Anekal Taluk. It is around 40 kilometers from downtown Bangalore. From City Center, Bangalore Railway Station and existing Bangalore Airport this area is situated at a distance of about 25-30 Kms Both Jigani IA and Bommasandra IA boast of excellent connectivity to major areas of Bangalore. These two areas are among well developed industrial areas with many reputed organizations have offices & factories in this area. The Jigani Bommasandra Industrial Area is about:

5. 55 to 60 Km from Proposed International Airport 6. 35 Km from IT Whitefield 7. 9 Km from Electronic City 8. 25 Km from main CBD area

ACCESSIBILITY There are two approach roads to Jigani Bommasandra Industrial Area. One is from Hosur Road and another is from Bannerghatta Road. HOSUR ROAD is NH – 7 connecting Bangalore to Hyderabad and other parts of India. Hosur road caters to traffic moving towards Electronic city and Bommasandra IA. Due to heavy vehicular movement it has been proposed to make the Bangalore-Hosur stretch of the national highway a six-lane road with an elevated road between the Central Silk Board intersection on Hosur Road and Electronics City. This will be a four-lane 'superstructure' - one of its kind. It will start from Hosur

BOMMASANDRA – JIGANI LINK ROAD

BOMMASANDRA INDUSTRIAL AREA

JIGANI INDUSTRIAL

AREA

THE SITE FOR PROPOSED IT PARK

LOCATION MAP – JIGANI BOMMASANDRA INDUSTRIAL AREA

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Road at the Silk Board junction and go straight into the heart of Electronic City. Construction on this project has started recently and is envisaged to be completed in next two years. A recent traffic survey carried out to study the traffic density on Hosur Road reveals a whopping 1.20 lakh passenger car units (PCU) on a normal day. As many as 10,000 trucks and 10,000 buses pass through Bommanahalli every day. As the four-lane Hosur Road is the only approach road to Electronic City, traffic from all over the city converges at the Silk Board junction to move ahead. However, all is not bad. The under-construction road on stilts, PWD's project to develop an arterial road and Nandi Infrastructure Corridor Enterprise's (NICE) peripheral road are progressing, and will reduce the pressure on Hosur Road once through. The PWD developed road will bring connectivity between Whitefield and Sarjapur Road, and Electronic City. NICE's peripheral road will connect Mysore Road, Kanakapura Road and Bannerghatta Road with Electronic City. Observations

• Generally the road condition is good but the situation may change with commencement of construction activities for six lane road and elevated highway.

• The traffic during peak hours generally causes delays in movement. The commuters face a lot of problems particularly between 8.00 am – 10.00 am and between 6.00 pm – 8.00 pm. However once the elevated Hosur road corridor, Peripheral road and PWD arterial roads come up the situation will ease providing relief to commuters.

• The development along the road is mostly industrial with very few pockets of residential development. Most residential areas developed are off the road.

• Majority of commercial/retail development is in Koramangala area. • Electronic city and Bommasandra are major destination for most travelers commuting from

the city to their respective work place. • Being a National Highway, Hosur road caters to heavy vehicular movement. • Connectivity to the proposed site will greatly improve once the construction of six lane NH-7

and elevated highway is complete. BANNERGHATTA ROAD is a Karnataka State Highway which connects Bangalore City through Bannerghatta village to Jigani Industrial area finally reaching Anekal taluk. Bannerghatta road previously had the name Anekal road. Over the years, because of the popularity of Bannerghatta National Park, a major tourist attraction, this road is now being called Bannerghatta road. Observations

• The road condition is generally good with few rough patches due to ongoing construction activities along the road. Road condition is bad after it crosses the main Jigani industrial area entering into Jigani Village.

• Road width narrows after IIM Bangalore causing problem and delays for vehicle moving towards Jigani IA. Improvement needs to be taken up periodically as it caters to tourist movement to Bannerghatta National Park and heavy vehicular movement to Jigani IA.

• Delays due to traffic are observed during peak hours up till IIM Bangalore (8.00 am – 10.00 am and 5.30 pm – 7.30 pm). The main junctions and traffic hotspots on this road are at Dairy Circle, BTM Check post area, Bilekahalli, Arekere Gate, Hulimavu Gate, Gottegere, Bannerghatta circle, Koppa gate, Jigani Industrial area.

• Bannerghatta Road has a host of IT companies having their campuses through out the stretch. Sterling Commerce, Oracle Corporation, Honeywell, IBM, Accenture, HSBC, Trilogy, Convergys and BPL Software are some IT companies who have a presence on this road.

• Huge residential developments have come up along the road due to setting up of IT campuses. L&tT South City (1400 Apts), Mantri – Elegence, Terrace, Elite, Paradise, Woodstock and Residency (each one is around 300 apts), Purvankara Heights and Panaroma (300 + apts), Ajmera, Ranka Colony are some big residential development in this area.

• Retail developments are few and far apart. Some of the residential townships have retail and commercial spaces leased out to retail grocery chains such as Foodworld, Viveks and garment showrooms.

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Main Approach Road

THE MAIN APPROACH ROAD abutting the site is 30 m (100 ft) wide Link road between Jigani Industrial Area & Bommasandra Industrial Area connecting to NH-7. The link road improves accessibility and connectivity between Bommasandra and Jigani reducing the distance between these two by nearly 12 Kms, thus making it convenient for industrialists to commute between two industrial areas and linking Jigani Industrial Area with NH-7. Observation

• The road condition is excellent having street lights, HT Line, road divider & signage, storm water drainage system and with all infrastructures in place.

• The approach road from Hosur road through Bommasandra is only 60 ft wide which can in future become a traffic bottleneck.

• Industrial development by the side of this link road has already started with major industrial and IT players such as Biocon, HCL and Cipla leasing land for development of their facilities.

• Nearest residential pocket is the Jigani village which is populated by poor and lower middle class industrial laborers. There is a need to develop more residential pockets to cater to needs of future development targeting middle class and higher income group section.

• Retail shops are mostly hardware and Kirana shops near village. Retail will only develop after residential development would come up.

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Land Use Map – Electronic City

CHAPTER – 6

NEIGHBOURHOOD ANALYSIS OF THE STUDY AREA SURROUNDING AREAS Jigani – Bommasandra Link Road is surrounded by mainly four major developed areas:

• Electronic City in the North

• Bommasandra Industrial area in the East

• Jigani Industrial Area in the West

• Anekal Taluk in the South ELECTRONIC CITY: An IT and industrial area located in the southern periphery of Bangalore Metropolitan Region, this is an electronics industrial park spread over 330 acres (1.3 km²) in Konappana Agrahara and Doddathogur villages. It houses more than a hundred industries, including IT industry leaders such as Hewlett-Packard, Motorola, Infosys, Siemens, ITI, Wipro, Satyam etc. The area is maintained by Keonics, which provides the entire necessary infrastructure.

• Area 332 acres (134 ha)

• Year of Commencement 1978

• No. of Industries 103 • No. of Persons

Employed > 60,000 • Distance from

Bangalore o 18 km from

Vidhana Soudha o 15 km from Airport.

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Electronics City also is the home of the International Institute of Information Technology - Bangalore which is one of the premier graduate schools in India, focusing on all aspects of Information Technology. The land Use of planning district housing Electronic City shows:

• It is still predominantly agriculture (60%) • Industrial landuse occupies approximately 10% of the total area of 36.6 sq. km. • Commercial activity has developed along Hosur Road. • Residential zones (5.5%) are less but present many parcels of land are being developed as

residential township

Observation

• The area is well developed and equipped with all infrastructure facilities for IT development. • KIADB has acquired additional 122 acres for expansion of existing Electronic city due to

demand for IT space in the area. • Rapid development of IT uses has created a pressure on availability of land in the entire

stretch between Whitefield and Electronic City along Sarjapur Road. Because of this pressure, residential developments have come up in an un-organised way.

• Though the area does not fall under BWSSB, electronic city is provided with all facilities. Many IT companies have a captive power plant to meet their requirements.

• There are around 17 primary schools, 11 Higher Primary schools and 4 high schools. These numbers is grossly adequate for present population, but in view of major developments coming up in this area more schools are required.

• The health care facilities are quite ample in this area with almost 8 primary health centres and 3 Hospitals.

BOMMASANDRA INDUSTRIAL AREA: This industrial area was started about twenty years ago. There are total of over 700 units in the Bommasandra Industrial Area of which less than half are active at this stage. In the early days of its development, this industrial area suffered extensively due to inadequate infrastructural facilities. However the situation has improved with initiatives taken by KIADB and the construction of the four-lane Bangalore-Hosur road in 1998 making this area more accessible. The average time to reach Bommasandra Industrial Area from the main city has also reduced considerably from about two hours to thirty minutes now.

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Landuse - Jigani Industrial Area

Industrial Plots

Civic Amenities

Roads

• Almost 72.5% of the total area comes under Industrial use.

• The percentage of civic amenities, commercial and open space together contributes only 14% of the total area.

• There are hardly any residential areas near to the site. The nearest residential areas are 5 Kms away located in Electronic city. Jigani village is around 6 Kms from this area.

Observations

• The area boosts of good connectivity to Bangalore being strategically located near Hosur Road.

• There is not much IT development in this area except for completed Info – park. The potential for IT development is quite good in this area as all infrastructure facilities are in place.

• Though there were water and power problems in past, the situation has improved considerably with intervention from KIADB. Many industrial units have gone for captive power generation and presently three bore wells have been sunk by KIADB provide the relief to water problem.

• Road condition in this area is very good through width of road in some junction is inadequate. Adequate street lights have been installed by the side of the road.

• There is a need for residential development in this area to accommodate growing volume of population due to upcoming industrial development in and around it.

• Social Infrastructure such as education, health care facilities and recreation are very few and inadequate for the present population. The need for these facilities requires immediate intervention from KIADB.

JIGANI INDUSTRIAL AREA: Jigani is located in Anekal taluk in South Bangalore and is situated at a distance of 20 km from Bangalore city railway station. Jigani houses the well established Jigani industrial area and is very near to Electronics City in Bangalore. Many Government initiatives to improve development to this area in Bangalore have led to growth of population in this area starting 2004. Jigani has all the potential to become the next IT Hub in Bangalore. This area has been built in two phases:

• Phase 1 spread over an area of 382,38 acres accommodates mostly granite industries, and some big manufacturing units as Crompton Greaves, Matrix, Material Ltd.,KEB, Micrpack Pvt. Ltd.

• Phase II has an area of 225 acres. It houses office of KSSIDC, many small scale granite and manufacturing units. OTIS and KTTM are some big names having manufacturing unit here.

Bommasandra Industrial Area

Description Area in Acres Percentage

Industrial Plots 155.56 72.57

Civic Amenities 14.29 6.67

Open Space and Park 12.69 5.92

Roads 31.86 14.84

Total 214.4 100

Jigani Industrial Area (Phase I & II)




Roads 43.31 6.68

Total 648.38 100

Landuse - Bommasandra IA

Industrial Plots

Civic Amenities

Open Space and Park

Roads

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• The landuse in phase I is 72% Industrial, 19.42% Civic amenities and rest 8.58% is under roads.

• Phase II is predominantly industrial covering almost 85% of the total area. Civic amenities and roads together covers rest 15% of the area.

• While a small patch of land in Phase II Jigani IA is earmarked for coconut plantation, there is no such landuse in phase I of Industrial Development.

Observations

• Jigani is one of the well planned Industrial Area in Bangalore and is approached through Bannerghatta main road.

• The state highway Bannerghatta road from Bangalore via Bannerghatta via Jigani till Anekal was upgraded in early 2006.

• Jigani is also one of the latest Residential hubs for good layouts around its Koppa gate area which are approved by BMRDA in Bangalore. The area is an excellent upcoming residential hub and is poised for tremendous commercial growth like supermarkets and other similar commercial opportunities in the days to come.

• IT potential of the area is good due to its proximity to developed IT areas along the Bannerghatta road. In this area all the facilities for IT development is also in place.

• Social infrastructure is also adequate in nearby areas of Jigani Village and Bannerghatta road.

ANEKAL TALUK: Anekal is a taluk of Bangalore district. The taluk lies in the southern part of the Bangalore metropolitan area around 40 kilometers from downtown Bangalore. Anekal as per census 2001 had a population of 33,160. Males constitute 52% of the population and females 48%. Anekal has an average literacy rate of 67%, higher than the national average of 59.5%; with 56% of the males and 44% of females literate. 12% of the population is under 6 years of age.

• Anekal is famous for its Silk industry and is home to a number of Skilled Weavers.

• Anekal railway station is located in the Taluk headquarters

of the same name. This is the nearest railway station to the proposed site.

• Hosur road cutting through Anekal taluk and connecting

Chennai and Hyderabad is predominantly industrial in nature.

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NEIBOURHOOD ANALYSIS OF THE LAND PARCEL

The company Pvt. Ltd has been allotted 8 acres of land in plot Nos. 317(P), 318(P) & 319(P) of Bommasandra – Jigani Link Road Industrial Area for setting up of IT Park. The said plot is bounded by

• Private Plot in the North • Plot No. 318 (P) and road in the South • Plot No. 314 (P), 315 (P), 316, 317, 318 & 319 (P) in the East • Plot No. 318 (P) & Private land in the West

Radha Swami Exports Ltd. in the east of the plot has started its operation. Many industries are clearing the sites to start construction. Other than this Cipla, the Pharma Company is constructing its campus. Industries like Biocon and HCL are operating from this area.

At present most of the land around the site is vacant. The land in the North belongs to private owners and land beyond to Jigani village which is very near to the site. Most of land in the north is cultivated by the local villagers.

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Industry Composition

34%

10%8%

3%

3%

4%

11%

4%

6%5%5%

Engineering

Software

Readymade Garments

Electronics/ Electrical

Biotechnology & Biochemicals

Chemicals

Packaging

Furniture

Plastic

Textiles

Automobile & Automotive Engg.

ITES

Pharmaceutical

Glass

Others

Landuse – Jigani - Bommasandra Industrial Estate

Observations

• The industrial landuse along the Jigani-Bommasandra Link Road covers almost 85% of the total area development of 731 acres.

• Civic amenities, commercial, open space and parks cover only 1.5% of the total area. • Nearest residential area is Jigani Village mostly populated by lower & lower middle class

people. There is a need for high end residential areas in the proximity of the Industrial Development.

• Most infrastructure facilities are in place due to established industries operating here.

Type of Industries Proposed in Jigani-Bommasandra Industrial Area. Mixed industrial landuse is proposed for development of this area. The most dominating industrial landuse belongs to engineering industry with 71 units coming up in this area. Around 22 Software units and 5 ITES industries are proposed here. This industrial development will provide employment to 25,000 people. The type and number of industries proposed in this area is given in the table.

Infrastructure Facilities KIADB is responsible for infrastructure development in this area. This includes roads, electricity, and water supply. Electricity will be supplied by Southern Regional Electricity Board. In addition to it, Industries are allowed to set up their own captive power generation. Total power requirement of the industries are: 70 MV. Bore wells will be used for Water supply. Industries can have bore wells in their own premises with prior permission from KIADB. In case, the yield of the bore well is higher than the required consumption, govt. can extract water for the well and use it for supply to other units. Total water requirement of the industries are: 5.6 MLD.

Jigani Bommasandra Link Road




Commercial 5.2 0.71

Open Space and Park 3.7 0.51

Roads 77.42 10.59

Deleted Plots 18.9 2.58

Total 731 100

Type of Industry Number

Engineering 71

Software 22

Readymade Garments 18

Electronics/ Electrical 12

Biotechnology & Biochemicals 10

Chemicals 10

Packaging 9

Furniture 8

Plastic 7

Textiles 6

Automobile & Automotive Engg. 5

ITES 5

Pharmaceutical 5

Glass 3

Others 23

Total 214

Landuse - Jigani - Bommasandra IA

Industrial Plots

Civic Amenities

Commercial

Open Space and Park

Roads

Deleted Plots

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CHARACTERISTICS OF THE SITE Total area of the Plot: 29690.67 sq. mtrs Topography: Mostly flat with slight undulation Vegetation: Plot is covered with bushes and shrubs Water potentiality: Medium Approach Road: Passage entry of 12 m wide road connecting the site to 30 m Link Road Classification of locality: Middle class Possibility of frequent flooding: Nil Tenure of Land: Lease-cum-sale basis Shape of land: Irregular Dimensions of the Plot

30.00 M ROAD30.00

129.00

335.64

85.02

108.73

14.31

90.40

191.89

PLOT NO.

317 (P), 318 (P) & 319 (P)

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Industrial

Corridor

Peripheral

Ring Road

IT Corridor

CHAPTER – 7

REAL ESTATE DEVELOPMENT AROUND THE STUDY AREA In last 2-3 years development activities beyond Electronic city on Hosur road has picked up. People traveling from city centre to electronic city increasingly prefer to living in areas in and around Electronic City to avoid everyday problem of traffic congestion. This has triggered of real estate development along Hosur Road. Another driving factor of Real Estate development in this area is the upcoming IT corridor connecting Whitefield – Sarjapur - Electronic City. This development is coming up along the Outer Ring Road. As per draft revised CDP-2015, Bangalore, this development will provide the required multi-sectoral initiatives for holistic development in South eastern region of City. ` This is a major urban development project which will create exclusive zone for IT Development. The upcoming Jigani-Bommasandra Industrial Area being at proximity to this corridor will logistically develop into next potential area for IT growth. KIADB with vision to develop Jigani-Bommasandra Link Road as another potential area for IT & ITES industry has allotted 22 plots for IT Development in this area. The demand for IT development in Whitefield – Sarjapur – Electronic City wills logically trickle down to Jigani – Bommasandra IA.

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Commercial Developments in and around Jigani – Bommasandra IA. The nearest zone of commercial development from Jigani is the Electronics city which is about 6 km from the proposed site. In Electronic city the rental values have come down slightly to about 23-28 Rs owing to high vacancy rate of about 15 %. In rest of Bangalore city other than Electronic city and Whitefield the vacancy rate is about 3 %. In Jigani – Bommasandra Industrial Area the prominent landuse is Engineering Industries mostly manufacturing. Though about 22 plots for software & 5 plots for IT have been allotted which is roughly 15% of the total plots. In Jigani there is hardly any commercial development. The closest commercial development to the site is Info-park, an IT park located in Bommasandra Industrial Area. This IT Park is ready for possession and demands a rent of Rs25 per sq. ft. for bare shell occupancy. Bannerghatta Road is another commercial development, which is though near the site but not easily approachable. In Bannerghatta Road the base rents have marginally increased in the last quarter and is currently in the range of 34-38 Rs per sq. ft. . Demand: Overall the suburban and peripheral markets accounted for approximately 87 % of the total absorption recorded in the second quarter with peripheral and suburban locations accounting for 1.03 and 1.05 million ft² respectively. Among the Suburban Locations, Bannerghatta Road continues to be an active office destination fulfilling 21% of office space requirement in the suburbs & peripheral areas as per the second quarter of 2006. Supply : The second quarter saw an infusion of 0.37 million ft² and 2.45 million ft² of fresh supply in the suburban and peripheral micro markets accounting for approx 98% of the fresh supply infusion in the second quarter with the peripheral locations alone accounting for approx 85% of the total stock. Residential Developments in and around Jigani – Bommasandra !A Koppa Gate is a junction on Bannerghatta road where Begur-Koppa road crosses perpendicular at the boundary of Koppa and Harapanahalli Villages in Jigani in Anekal taluk and this is busy junction with several small village shops, bus stops, schools etc. This junction is exactly 20 km from Bangalore city railway station. BMRDA approved residential layouts in the area: 1. Golden Nest residential layout developed by Aishwarya Shelters. 2. Nisarga residential layout developed by Nirman Shelters. 3. Nandanavana residential layout developed by Nirman Shelters. 4. Pride Vatika residential layout. 5. Spring woods residential layout. 6. Golden Homes residential layout. Good ICSE, CBSE and Karnataka state board Schools in this area: 1. Tapovan School 2. Christ Academy 3. Ryan International. 4. PSBB School 5. Mark Global School Hospitals in the area: 1. AKN hospital, Jigani. 2. Narayana Hrudayalaya. 3. KVG Hospital and Research centre, near Sarla Birla International School.

Area Rental – Bare Shell (Rs/sqft)

Electronic City 23-28

Bommasandra IA 25

Bannerghatta road near Accenture and IIM

34-38

Bannerghatta road towards Jigani IA 20-24

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Residential Development in and around Electronic City Amulya Royale Residential Electronic City 2 Km 2200/sq.ft Ittina Nila Electronic City 3 Km Concord Sylvon Villas – electronic 5 Km 1900/sq.ft Brigade Pristine Apt – Hosur 4 Km 1500/sq.ft Gopalan Gardenia Hosur main rd 3 Km 2000/sq.ft Green Woods Hosur main rd 3 Km 2100/sq.ft R.K Lake View Electronic City 3 Km 1800/sq.ft NBR Residential Layout Near Electronic City 5 Km 1500/sq.ft Spring Fields Hosur Road 4 Km 1800/sq.ft Upkar Greenfields Hosur Road 5 Km 2200/sq.ft Upkar Meadows Near New Biocon 1 Km 1500/sq.ft

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STRENGTHS

• Clear title, no legal issues related to parcel of land as it is allotted by KIADB

• Land for development is allotted at a competitive rate of Rs. 30 Lakhs/ acres while the market price is Rs. 1 crore/acre

• Infrastructure requirements such as water supply, power, telecommunication network and roads are in place.

• Good accessibility to the city by Hosur road. • Proximity to Electronic City and IT Corridor. • Link road will connect two established

industrial hubs decreasing the distance and travel time between the areas.

• Presence of Major industries such as Biocon, HCL, Omax, Cipla providing marketability to the area.

WEAKNESS

• Hardly any commercial & residential development in this area to house the projected population in the future. No land has been earmarked for residential development in the landuse plan.

• Present traffic congestion and bottlenecks in Hosur road is diminishing the attractiveness of the area.

• Poor condition of Jigni Village road makes it inconvenient to approach the site from Bennarghatta road.

• Most people prefer traveling from city centre to this area due to absence of accommodation and amenities.

• Public transportation to this area is very poor. • Though distance from existing airport is only

20 Kms, the upcoming international airport in Devanahalli is at the other end of the city around 50 kms from the site.

• Uncertainty about final price of the parcel of land that will be fixed by KIADB for sale of the land after 6 years.

OPPORTUNITY

• The proposed elevated highway on Hosur road and expansion of Hosur road to six lane road will cut down travel time and increase accessibility to this area.

• Due to its proximity of developed Electronic city and IT corridor, this area has high potential for IT development.

• With upgradation of existing infrastructure, residential development will kick off in this area.

• Many developers have proposed residential and commercial development along Hosur road to accommodated growing demand for Real Estate.

• The proposed Peripheral Ring Road will increase its accessibility to all parts of the city

THREATS

• Whitefield area and Sarjapur has a much higher growth percentage in IT development than the study area and at present is much more attractive option for investors.

• Due to huge line up of supply in office space, the commercial real estate market prices are going down in peripheral areas.

• Appreciation of property value is decreasing • Failing infrastructure of the city is pushing

investors to other cities such as Chennai, Hyderabad, Ahmedabad, etc.

• The Bangalore Real Estate Prices sector is burdened with multiple taxes such as work contract tax, service tax, high stamp duties and an increase in the cost of raw materials.

CHAPTER – 8

SWOT ANALYSIS OF THE STUDY AREA

TEV Report


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D I S C L A I M E R The information given in the document has been relied upon by IL&FS Property Management & Services Ltd., on the basis that it is accurate and complete. IL&FS Property Management & Services Ltd. accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, the same is submitted subject to errors, omissions, change of price, rentals or other conditions, withdrawal without notice. The report is provided solely informational purposes and is not to be construed as proving advice, recommendations, or warranties of any kind whatsoever.

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