Bangalore, the capital of Karnataka State has a population of 4.8 million and has emerged as one of Asia's fastest growing cities, with a growth rate of 76% between 1981 and 1991.

During 1995-96, market values had risen by more than 100% in all segments. With increased urban development activity, the city had achieved the distinction of the highest growth rate in the country at more than 40%. As a result of this rapid expansion, Bangalore has been facing infrastructure problems such as power cuts and lack of proper roads. This has to some extent a negative impact on real estate values and curtailed growth over existing levels.

Bangalore has a severe shortage for low cost housing. However, city authorities have been largely unsuccessful in meeting these demands. Private builders have undertaken development activities with a clear tendency towards housing that caters to the lower middle and upper middle income segments. Only a few projects are in the pipeline for the economically weaker sections.

Demand: The rapid increase in the demand for higher quality residential space could be attributable to the following reasons:

a) The middle class sector's rise in disposable incomes and expectations levels.

b) Accommodation for expatriate employees of the multinational companies coming to Bangalore.

c) Expansion of large Indian Corporates and existing MNC'S.

d) Long term investments from NRI's into residential & commercial projects.