Karnataka's real estate sector is undergoing a significant transformation. In February, the Karnataka Industrial Areas Development Board (KIADB) increased the Floor Area Ratio (FAR) in its industrial regions to 5.2, up from the previous cap of 3.25. This amendment permits industrial plots along roads wider than 30 meters to achieve a FAR of 5.2. Roads measuring 24 to 30 meters now allow a FAR of 4.8, while 18 to 24 meter roads permit 4.0, and 12 to 18 meter roads allow 3.6. For roads under 12 meters, the FAR ranges between 2.45 and 2.8.
Understanding Floor Area Ratio (FAR)
Gross Floor Area (GFA) refers to the total area of a building if all its floors were combined. FAR is the ratio of the gross floor area to the total land area. For instance, if a building has a GFA of 3000 square meters and a land area of 1500 square meters, the FAR equals 2.0. FAR determines the number of floors a building can have and the area each floor occupies. Karnataka's FAR upgrade allows builders to construct taller buildings with more floors, leading to an increased number of flats.
Impact on Bengaluru's Real Estate Market
Due to surging demand driven by population influx and economic growth, Bengaluru has become one of the most expensive cities for homebuyers. According to PropTiger's report on India's real estate sector for Q1 2026, Bengaluru ranks as India's second costliest city after Mumbai, with prices reaching up to Rs 9,785 per square foot. The increase in the number of floors is expected to ease the costly real estate market by boosting supply. However, developers must pay a premium fee to the state government to build up to the new limits, which may ultimately be passed on to buyers.
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