Industrial space rentals in B'lore up 12% in 1 year

Major industrial areas in Bangalore "" Bommasandra, Jigani and Peenya "" have witnessed an increase in the rents, averaging 12 per cent in one year.

The main reason for the upward movement in rentals is the non-availability of government-promoted industrial estates, increased demand from the services industry and for residential use.

According to Cushman & Wakefield's Industrial Spaces Report, the Bommasandra industrial area witnessed a 15 per cent rise in the rentals at Rs 23 per square foot in December 2007 as against Rs 20 per square foot quoted in December 2006. The Jigani industrial area, which neighbours Bommasandra, also saw a 11.76 per cent rise in rentals at Rs 19 per square foot as against Rs 17 per square foot quoted last year.

Both Bommasandra and Jigani are the main connecting corridors to Tamil Nadu and account for significant business between Hosur and Bangalore. With the area riding high on the IT boom, the demand for land has increased in the region. Major industries here include engineering, pharmaceutical, logistics and garments.

Meanwhile, Peenya in the north-western and the first industrial estate in the city, saw the lowest rise of 10.52 per cent at Rs 21 per square foot as against Rs 19 per square foot quoted last year. Major industries located in the area include auto ancillary, small scale engineering as well as logistics.

Further, with north and north-west Bangalore witnessing increased demand for residential space, land prices in Peenya spiked upwards.

"The trend now revolves around asset maximisation, hence many industries are now proposing to capitalise on their assets and shift out of these regions especially with regard to Peenya," said Sanjay Dutt, joint managing director, Cushman & Wakefield India.

"The existing industrial estates were formed by the government. However, owing to the non-availability of government promoted industrial estates, these areas have witnessed increased demand from the services industry and the residential sector, which has been reflected in the price movement. Further, with the city limits expanding, coupled with improvements in connectivity and social infrastructure development, these areas are no longer considered 'out of the city'," he added.