Bengaluru real estate: Here's what you should know if you are planning to buy a residential plot in the IT city

Buyers wanting to invest in plots in Bengaluru should consider the location, the type of developer selling the land, and the amenities the project offers

Rajesh Joshi works in the hospitality sector and has been looking to purchase a residential plot in Bengaluru. He has found several plotted development projects in north Bengaluru spread across 1350 sq ft for about ₹50 lakh. He plans to invest in a plot to use it as a retirement home after 15 years or sell it if he gets a good return on his investment.

Buyers wanting to invest in plots in Bengaluru should consider the location, the type of developer selling the land, and the amenities the project offers. (Representational Image) (Unsplash)

Plots have become an attractive investment option for buyers due to the asset class's healthy returns over the last few years. In some parts of Bengaluru, like the north and east, “we have seen plotted developments appreciating more than apartments and villas," Sunil Singh, director of Realty Corps, said.

Real estate experts say land prices in the east and city centre—areas close to Devanahalli, Koramangala, and Indiranagar, among others—have increased post-pandemic. In contrast, prices in the north, including areas like Hebbal and Devanahalli, continue to show healthy appreciation.

Investment options in Bengaluru

According to real estate experts, plotted development prices have appreciated in places in north Bengaluru like Devanahalli, Hennur, Bagalur, and the outskirts of Yelahanka. The eastern IT corridor of Whitefield, Sarajpaur Road, Varthur, Panathur, and surrounding areas has also witnessed price growth.

"The northern part of the city has seen more appreciation in plotted developments than the east and south," Manjesh S Rao, Chief Real Estate Officer at BrokerInBlue, told HT.com.

Upcoming infrastructure, such as the suburban rail, Peripheral Ring Road, and Bengaluru Satellite Town Ring Road, have been instrumental in driving demand, said experts.

"However, we also see southern parts of Bengaluru like Kanakapura Road, Banashankhari, and JP Nagar also appreciating due to the upcoming infrastructure corridors," Kiran Kumar, vice president of Hanu Reddy Realty, added.

How much does it cost to invest in a plotted development in Bengaluru?

Brokers say plotted projects by Grade A developers in north Bengaluru, around Devanahalli,start from at least ₹7000 per sq ft for a basic 1200 sq ft plot.

"In other places in the north, like Hennur and Bagalur, the plots are available for ₹6000 per sq ft. These gated communities developed by Grade A developers add to the costs. Smaller projects are also available for ₹4000-5000 per sq ft however, they are few in number," Rao added.

And towards the east and south, the plots are available for ₹4000-5000 per sq ft, depending on the sizes and the type of development. "Prices in the south towards Kanakapura Road have increased 10-15% to ₹5000-6000 per sq ft in the last year. We even see some of the plots by Grade A developers listed at ₹8000 per sq ft," Kumar said.

What should buyers keep in mind before investing in a plot in Bengaluru?

Real estate developers say a plotted development in Bengaluru appreciates yearly at a consistent 15-20% rate. "However, it also depends on the location and the type of developer selling the land. The buyer should look at aspects like the amenities the project offers. A gated society located at a well-connected location may see such appreciation," Rao said.

Today, several plotted development projects across the city provide amenities like luxury clubhouses, swimming pools and open spaces. They say these add to the price of the land and are safer options for investments.

"Also, do a thorough background check regarding litigations pending against the developer and his execution capabilities before investing in a project. In some cases, the buyer should also look at 'A Khata' lands," Kumar said.

The A Khata is a document that certifies that the property owner has duly paid relevant property taxes to the BBMP and owns the legal property. The B Khata is a separate register maintained by the local municipal body that lists illegal properties or deviations.

Experts add that several banks offer loans for buying plots today. "Typically, in Bengaluru, homebuyers can avail of bank loans only if they purchase plots with A Khata. And now, e-khata is mandatory to apply for a bank loan while buying a plot. On average, the interest rates are between 8-9% depending on the bank if the buyer constructs the property within two years of purchase, according to RBI guidelines. Otherwise, it can lead to higher interest rates or penalties," Sujith Gowda, a banker based out of Bengaluru, said.

Several Bengaluru developers like Sattva Group recently announced the launch of a 20-acre plotted development in north Bengaluru with about 343 plots. Prestige Group launched its plotted development project Prestige Kings County with over 600 plots last year.