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With booming commercial take-up and a policy overhaul gathering pace, the city’s real estate market is entering a new era of scale, speed and investor confidence

The real estate sector has been one of the strongest pillars of 含羞草社区 economic growth, evolving into a reliable investment segment among investors in recent years. Institutional investment in India exceeded USD10.4 billion in 2025, and the market size is projected to reach USD1 trillion by 2030.

The office segment remained the top investment division, with data centres, student housing, life sciences and healthcare being the market’s new favourites. The epicentres for the boom remain Mumbai, Bengaluru and Delhi, with a combined total of 55% capital inflow in 2025. While Delhi and Mumbai saw a dip in office leasing, Bengaluru retained its position as the largest office market, with 28.7 million square feet, up 58.9% from 2024.

To retain its throne in the sector and to realise the massive potential the city holds, the government has introduced multiple pieces of legislation and policies to revamp real estate operations in the city. The demand in Bengaluru will continue to grow, given its infrastructure growth and various policies that facilitate investment.

Market trends and investment outlook in Bengaluru

Residential real estate. In 2025, Bengaluru recorded 49,252 residential unit launches, a 28% year-on-year increase, marking a historic milestone. Rents remained stable across the city, with some micro-markets in the east and southeast belt witnessing a marginal increase.

Commercial real estate. Bengaluru emerged as 含羞草社区 leading commercial real estate market with 28.7 million square feet of office space take-up, contributing to 58% of year-on-year growth. This stands as testament to the strong conviction of occupiers, led by the global capability centres across sectors such as IT and banking, financial services and insurance (BFSI), as well as new economy sectors. Further, 97% of the transacted space was in grade A projects, a 3% jump from 2024, signifying a trend towards future-ready workspaces.

Foreign and domestic investment. In 2025, cross-border investments in Indian real estate declined to USD3.7 billion, reflecting a 16% drop. However, Bengaluru managed to attract USD2.2 billion in total, the highest among Indian cities. With office space occupying the largest share, investors are diversifying into logistics, warehousing and data centres.

With respect to real estate investment trusts (REITs), 2025 saw Bengaluru as a mainstay in India, primarily driven by growing office demand and enduring interest from global technology giants. The maturity of the office market made it an integral part of listed Indian REIT portfolios, delivering steady rental returns and a clear picture of future income for investors. The SEBI’s classification of REITs as “equity-related instruments”, effective from 1 January 2026, is likely to see greater mutual fund and specialised investment fund participation in listed trusts, which is expected to improve liquidity in the commercial real estate market.

Major legislative reforms reshaping Bengaluru real estate

Premium FAR. Karnataka has formalised premium floor area ratio (FAR) as a statutory tool under section 13E of the Karnataka Town and Country Planning Act, 1961, enabling intensified development in Bengaluru. Premium FAR refers to additional floor area beyond the normally admissible FAR in exchange for a government-set premium.

This not only facilitates vertical development but ensures efficient land use in well-serviced areas and provides ring-fenced resources for infrastructure development, directly supporting planned and sustainable development in the city.

The GBA. The Greater Bengaluru Authority (GBA), constituted by the Greater Bengaluru Governance Act, 2024, has taken over the mandate from the Bruhat Bengaluru Mahanagara Palike (BBMP, or Greater Bangalore Municipal Corporation), as the central co-ordinating and supervisory agency that facilitates governance in the greater Bengaluru area. Under this structure, the city is now administered through multiple municipal corporations, while the GBA functions as an apex co-ordinating body.

Unlike the BBMP’s older model, the GBA connects several important civic agencies (such as the Bengaluru Development Authority, the Bengaluru Water Supply and Sewerage Board, the Bengaluru Metro Rail Corporation and others) on a unified platform to facilitate integrated planning and delivery of critical infrastructure and services.

Karnataka Land Revenue (Third Amendment) Act, 2024. The legislature passed this act, which provides amendments to key provisions of the principal act, to modernise the land governance system. Changes include a revamp of section 95 of the act, which now provides that no diversion of land for non-agricultural purposes shall be required if agricultural land up to 2 acres (0.8 hectares) is used for establishing new industries, subject to the intended use of such land being as per the land use specified in the masterplan, with the necessary approval of the state government.

Buffer norms. The government of Karnataka, in an effort to streamline the buffer regulations around rajakaluves (stormwater drains or canals) and to ensure that the environment of these water bodies is protected, amended the zonal regulations of the revised masterplan, 2015, and the existing masterplans within the Bengaluru Metropolitan Region. This amendment now classifies drains into primary, secondary and tertiary drains based on revenue records, and mandates minimum buffers of 15 metres, 10 metres and five metres, respectively. The modified buffer regulations ensure balanced urban development and help ensure that the city remains resilient to urban floods.

Simplified property registration. The recent Registration (Karnataka Amendment) Bill, 2025, aims to make property registration more streamlined and citizen-centric, with digital, remote, integrated and regulation-based registration provisions, proposing a game changing mechanism to govern the property registration in the state.

A recent order of the revenue department has marked a substantial shift in the modus operandi of property transactions, with an exhaustive electronic and paperless registration system. As per the order, all unsigned documents proposed for registration are to be uploaded online on the Kaveri portal and verified electronically by the sub-registrar.

The documents may then be executed using Aadhaar e-sign or digital signature certificates, and registered without any physical presentation or manual signatures. On completion of the relevant procedures, as per the order, the final registered documents are affixed with a unique registration number and maintained as “original” in the Karnataka Registered Document Repository.

Conclusion

Bengaluru continues to remain one of 含羞草社区 most attractive real estate investment destinations, owing to its robust economic drivers as well as progressive, investor-friendly policies. With the recent amendments to various laws, the state addresses challenges concerning inefficiency, ambiguity, time consuming processes and other bottlenecks in real estate development and asset management, making the city a future-ready real estate hub for investors.

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