11-06-2025
Karnataka notifies Peenya Industrial Area as Special Investment Region; move to boost real estate growth
The Karnataka government has officially notified Bengaluru's Peenya Industrial area as a Special Investment Region (SIR), making it the 18th such zone in the state. Situated along the Bengaluru-Tumakuru highway, Peenya is one of Southeast Asia's oldest and largest industrial hubs, home to a wide range of manufacturing units producing engineering goods, electrical equipment, textiles and several start-ups.
Peenya Industrial Area (PIA), located in northwestern Bengaluru, was established in the late 1970s. It houses several small, medium and large-scale industries.
Real estate experts say the SIR designation is likely to boost civic infrastructure in the core areas of Peenya. As the area develops into a more organized industrial township, demand for residential real estate, particularly in the mid-income segment, is expected to rise. Both rental and capital values are projected to increase with improved infrastructure and connectivity.
According to a government notification issued on June 9, the Peenya Industrial Area, comprising its first, second, third, and fourth phases in Bengaluru district, will be designated as a Special Investment Region (SIR), covering a total area of 1,461.46 acres.
The notification states, 'Peenya Special Investment Region shall be deemed to be an industrial township, and the Government of Karnataka hereby declares Karnataka Industrial Areas Development Board (KIADB) as the Industrial Township Authority.'
This makes Peenya as the 18th major industrial area in Karnataka to be designated as a Special Investment Region (SIR). In April this year, the KIADB had notified 17 such industrial zones, assuming the role of Regional Development Authority (RDA) responsible for local administration, including property tax assessment, imposition, and collection.
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It should be noted that the SIR Act was introduced to streamline the development, governance, and management of large, mega, and super-mega investment zones. KIADB has been entrusted with administering these regions. The Karnataka Special Investment Region Bill was passed in 2022, with rules notified in 2024, to simplify investment procedures and position the state as a global manufacturing hub.
The legislation empowers the state government to declare existing industrial areas as SIRs, define their boundaries, and promote integrated economic development. Within these notified zones, KIADB has the authority to approve land use plans, infrastructure projects, and related activities.
The designation of Peenya as a Special Investment Region (SIR) is expected to significantly impact the local real estate landscape, according to Digbijay Das, Senior Director, Valuation Services at Colliers India.
Peenya is already a well-established and diversified manufacturing hub with a strong presence of MSMEs across sectors such as engineering, auto components, electronics, and defence. It enjoys excellent connectivity via National Highway 4 and the Green Line of Bengaluru's Metro Rail, and is located near key residential areas like Yeshwanthpura and Rajajinagar. Social infrastructure in the region is also steadily improving.
According to Das, the SIR status will influence real estate development in several ways:
Provide a filip to civic infrastructureWith KIADB collecting property tax within the SIR and allocating 70% of the revenue for infrastructure development, the area is expected to see substantial improvements in civic amenities. This includes better roads, footpaths, drainage, street lighting, waste management, and reliable power supply.
Enhanced safety and support servicesThe region is likely to see an upgrade in public safety infrastructure with the addition of police stations, fire stations, and medical facilities, further increasing its attractiveness for both industries and residents.
Peenya is witnessing a growth in the number of start-ups within the core manufacturing sector. SIR status is expected to attract more skilled workers and investors, he said.
Rise in residential demand and property valuesAs Peenya develops into a more organised industrial township, the demand for mid-income housing is expected to rise. 'Rental and capital values will likely appreciate once infrastructure upgrades are in place,' Das noted.
Streamlined approvals under KIADBWith KIADB now acting as the Industrial Township Authority, project plan approvals are expected to be processed faster under Karnataka's ease of doing business policy, he added.
