The most talked about suburban location of southern India—Whitefield, in Bangalore—is suffering alarming levels of vacancy rates as far as its commercial properties are concerned.

According to the industry reports, the new commercial properties in the Peripheral Business District (PBD) of Whitefield in Bangalore have perhaps one of the highest vacancy rates in the entire southern part of India, at 38.5 per cent.

The point of concern is that the region is oversupplied with Grade A office space area for IT and ITeS companies. As per industry estimates, Whitefield has received fresh office space of 0.82 million sq. ft in the past quarter. If we average it out, the same comes to 2.30 million sq. ft, for the past three quarters. These figures are quite high, the real estate developers have flooded Whitefield with commercial properties, and they must be realizing that they cannot simply launch projects on witnessing a few phases of real estate boom, in any area.

Meanwhile, the other peripheral business districts at ORR and Hosur Road are quite at moderate levels around 10 per cent, which can be digested by the industry.

However, from consumer point of view, the trends are positive. The rental values in Bangalore's suburban locations are stable at least for the past 12 months and are expected to remain so due to easy availability of commercial properties all across. PBD rentals at Bannerghatta although witnessed rise in rentals by 5-15 per cent.

Interestingly, eight of every ten major deals for leasing commercial office space in Bangalore happen in the Peripheral Business Districts today. In the past 3-months, some of the big deals include the one by international technology major SAP leased 1.20 lakh square feet of office space at Salarpuria Softzone.

Online giant Yahoo also preferred PBD, taking over about 22,000 sq. ft of office property at RMZ Ecospace, industry sources informed.

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