Karnataka’s decision to permit a significantly higher floor area ratio (FAR) within Karnataka Industrial Areas Development Board (KIADB) zones is poised to alter the development trajectory of Bengaluru’s industrial corridors, enabling taller and more integrated projects across manufacturing, logistics, commercial and residential segments.
The state has revised building regulations to allow FAR of up to 5.2 on eligible plots through premium payments, a substantial increase from earlier caps that restricted many large industrial parcels to an FAR of around 3.25. The revised structure links permissible density to road width, with wider arterial roads qualifying for the highest development intensity. FAR, a core urban planning metric, determines how much built-up area can be constructed relative to plot size. A higher FAR allows developers to build vertically or create denser campuses without expanding land holdings. On the same land parcel, an increase in FAR can dramatically raise total permissible floor space, reshaping project economics. Urban economists note that the Karnataka KIADB FAR reform enhances land productivity in a city where industrial and commercial land values have steadily climbed. By unlocking additional buildable area, the policy reduces pressure to aggregate large tracts and improves feasibility for capital-intensive uses such as data centres, multi-level warehouses and advanced manufacturing facilities.
The immediate beneficiaries are likely to be peripheral growth corridors near airport connectivity and logistics hubs. These zones have emerged as magnets for global capability centres, electronics manufacturing and e-commerce distribution. Higher density permissions could enable vertical industrial formats and integrated campuses combining offices, worker housing and support infrastructure within the same notified estates. Real estate analysts suggest the move may also stabilise land pricing in emerging micro-markets. When development potential rises, transaction momentum often improves as institutional investors and large occupiers gain clarity on long-term utilisation. Over time, this can attract deeper pools of private equity and sovereign capital into industrial real estate platforms. While the reform is limited to KIADB-notified areas, its influence may extend into housing patterns. As employment clusters intensify along industrial corridors, demand for residential projects in adjoining areas could strengthen. Planned townships with mixed-use components may become more viable under higher FAR allowances, potentially shifting some growth away from the city’s already congested core. However, planners caution that density without infrastructure upgrades can strain transport networks, water systems and power supply. Bengaluru has grappled with flooding, traffic congestion and groundwater depletion in recent years. Integrating higher FAR permissions with transit expansion, stormwater management and renewable energy systems will be critical to ensure climate resilience.
The Karnataka KIADB FAR reform reflects a broader shift towards compact, land-efficient urban growth. Its long-term success will depend not only on vertical expansion, but on whether industrial intensification is matched by sustainable planning and inclusive access to jobs and housing in the city’s next phase of expansion.
Also Read:Â Bengaluru approves 60000 property khata upgrades
Karnataka eases KIADB norms for high rise projects
