Shares of major real estate developers with significant exposure to Bengaluru declined sharply on 13 February, falling by up to around 4% as investors reacted to growing concerns over turbulence in the technology sector. The sell-off reflected fears that disruption driven by artificial intelligence (AI) and uncertainty around IT hiring could spill over into real estate demand and property valuations.

Developers most affected were those closely tied to the city’s tech-led residential and commercial property markets, where demand is heavily influenced by employment trends in the IT and startup ecosystem.

Key Realty Stocks Under Pressure

Among the notable losers were:

• Prestige Estates Projects, which saw its shares slip close to 4% in intraday trade.
• Brigade Enterprises, which also witnessed a significant decline as selling pressure intensified.
• Oberoi Realty, despite having diversified exposure across cities, was not immune to broader sector weakness.

The broader realty segment underperformed the benchmark indices, reflecting cautious investor sentiment toward property stocks with higher dependence on technology-driven demand.

AI Disruption Fuels Investor Anxiety

Market participants attributed the decline largely to renewed anxiety over the impact of AI-driven automation on the traditional IT services industry. Investors fear that structural changes in hiring patterns and possible workforce rationalisation could slow income growth for tech professionals — a key customer base for mid- to premium-segment housing in Bengaluru.

Since the city’s real estate market has long been supported by steady IT employment and office leasing activity, any prolonged slowdown in the sector is seen as a risk to both residential absorption and commercial space demand.

Concerns Over Residential and Office Demand

Analysts noted that a slowdown in tech hiring could directly affect home purchases, rental demand and expansion plans by global technology firms. Residential sales in areas close to IT corridors and business parks are particularly sensitive to shifts in employment confidence.

Office leasing, another major revenue driver for large developers, could also face headwinds if companies postpone expansion or consolidate workspaces in response to economic uncertainty and rapid automation.

Broader Market Sentiment Turns Cautious

The weakness in realty stocks coincided with pressure in technology counters, suggesting a broader risk-off mood in equity markets. Investors appeared to be trimming exposure to sectors perceived as vulnerable to cyclical and structural disruptions.

Real estate stocks, which had gained in recent months on strong sales momentum and improving cash flows, saw profit booking as uncertainty returned to the outlook for demand from the tech workforce.

Outlook Remains Mixed

While near-term market sentiment has turned cautious, industry observers believe the long-term fundamentals of Bengaluru’s property market remain intact, supported by infrastructure development and continued urban migration. However, they caution that sustained stress in the IT sector could temper growth expectations for developers in the coming quarters.

For now, the decline in realty stocks highlights how closely tied investor confidence in Bengaluru’s property market remains to the health of the technology industry and its evolving role in the AI era.

  Bengaluru real estate, Brigade Enterprises, Oberoi Realty, Prestige Estates, Stock Market