Whalesbook
Karnataka has significantly eased building regulations for industrial plots under the Karnataka Industrial Areas Development Board (KIADB). The key change allows a Floor Area Ratio (FAR) of up to 5.2, purchasable via premium, a substantial increase from previous limits. This reform targets efficient land use and vertical development, set to fuel expansion in industrial, commercial, and residential projects across the state's industrial corridors. Experts believe this will reduce business costs and boost production density.
Boosting Land Use Efficiency
The move directly addresses the growing challenge of land scarcity, particularly on Bengaluru's peripheries. By permitting a FAR of 5.2, developers can construct built-up areas 5.2 times the plot size, enabling denser and more efficient land utilization. S Selvakumar, principal secretary at the state's commerce and industries department, stated this promotes vertical development, attracting more industries and leading to higher economic output and job creation.
Revised FAR Norms Detailed
The revised norms, notified on February 6, substantially increase permissible FAR based on road width. Industrial plots along roads wider than 30 meters can now achieve a maximum FAR of 5.2, a significant jump from the earlier 3.25. Plots along 24-30 meter roads can reach 4.8 FAR, 18-24 meter roads get 4.0 FAR, and 12-18 meter roads allow 3.6 FAR. Even smaller roads below 12 meters offer FARs between 2.45 and 2.8, ensuring broader improvements in buildable area.
Integrated Townships and Mixed-Use Development
The reform also introduces higher development intensity for integrated industrial townships. Projects on roads above 30 meters can achieve 45% ground coverage and a total FAR of 5.2. This facilitates the creation of large-scale mixed-use ecosystems, combining manufacturing, commercial support, and worker housing within single campuses. Industry stakeholders anticipate this will enable vertical factory models and multi-level warehousing.
Incentives for Outlying Areas
The policy also provides targeted incentives to encourage industrial expansion outside Bengaluru. Industries in these areas are expected to benefit from enhanced FAR allowances and lower land costs. This is seen as a key step towards balanced regional industrial growth across Karnataka, potentially easing pressure on the capital region.
Setbacks and Parking Adjustments
To further facilitate development, setback norms for smaller industrial plots have been relaxed. Buildings up to 7 meters height on plots up to 255 square meters will require minimal front and side setbacks, provided the road width is sufficient. Revised parking norms mandate general industries and data centers to allocate at least 2% of total plot area for parking, while warehousing and logistics facilities require 3%.
Economic Ramifications
Real estate consultants estimate that previous regulations led to nearly half of industrial land remaining underutilized. The new FAR provisions are expected to unlock significant built-up capacity, improving returns for developers and occupiers. CBRE India noted Karnataka's positioning as a competitive destination for high-density industrial ecosystems, aligning with global manufacturing trends toward vertical production models. Market experts foresee a cascading impact on commercial office space, retail, and residential demand around emerging manufacturing clusters.