BANGALORE: Sunita Koppar, an IT professional with Oracle, never expected her flat owner's random talk on inflation would come with a rider. He dropped a hint on passing on any price hike to her. His yardstick: anything from onions to foodgrains going through the roof. This year, he raised the rent by 20%. But that didn't quite match the hullabaloo created on commodity inflation.
He sprung another surprise -- one more round of substantial hike when the agreement comes up for renewal. "The hike in rent has been significant in the past one year. But I will hang on till we move in to our new apartment," she said.
As IT/ITeS firms are back on the growth track, companies are going full-throttle on their hiring plans. This has attracted a lot of talent from outside Bangalore, hence a pent-up demand for apartments around the IT hub. "Rentals have gone up by 15-20% at Marathahalli, Sarjapur, Whitefield and Outer Ring Road compared to last year. Rentals in pockets of North Bangalore have also moved up," said Sunil Simon, proprietor of property consultancy firm Aaron Associates.
Post-slowdown, the market witnessed a correction in residential space. The recovery was felt in luxury and mid-sized apartments, lending itself to a moderate increase in rentals. "Rentals in high-end apartments like Epsilon, Palm Meadows, Prestige Bougainvilla and others have seen a revision. Newer developments, especially gated communities, have witnessed an increase in capital values. That's also reflecting in the rentals," said Ram Chandnani, deputy managing director, South India, real estate consultancy CB Richard Ellis.
The city's rental graph has moved up in traditional IT hubs like South and East Bangalore too. Residential layouts in Koramangala, Hosur Road, Bannerghatta Road, Sarjapur Road, Jayanagar, J P Nagar and Banashankari have witnessed 10 to 15% jump. A similar trend is seen in pockets of East Bangalore, including parts of Indiranagar, Airport Road, Fraser Town, Cooke Town, Lingarajapuram, Marathalli, HRBR Layout, Banaswadi, Old Madras Road, K R Puram, Brookefields, Hoodi and Whitefield.
But the reverse happened in 2009. IT firms froze recruitment plans. As a result, the job market was shaky and spending power shrank. Oversupply in Sarjapur, Outer Ring Road, Whitefield and Marathalli forced apartment owners to press the panic button. They offered steep discount on rentals to combat weak consumer sentiments. Prices during the slowdown tanked by as much as 35%, said real estate brokers. "Apartment owners in Palm Retreat or Brigade Metropolis expected 6 to 7% return on investments as they had purchased flats at a premium. They only got 3% return then. But things are looking better now," added Chandnani.
On the flip side, Metro rail work and congestion in the central business district of MG Road, Richmond Road, Residency Road and Lavelle Road, to name some areas, has pushed down rentals by 10-15%. "Villas demanding rentals close to Rs 1.5-2 lakh have dropped by 20% compared to a year before," said regional director (south) of Knight Frank India, Naresh Dandapat.
A Knight Frank research estimates that the city will witness a residential supply of 38,000, translating to 72 million sqft between 2009 and 2011. Around 53% of this supply will be 3-BHK apartments and 30% will constitute 2-BHK ones.
He sprung another surprise -- one more round of substantial hike when the agreement comes up for renewal. "The hike in rent has been significant in the past one year. But I will hang on till we move in to our new apartment," she said.
As IT/ITeS firms are back on the growth track, companies are going full-throttle on their hiring plans. This has attracted a lot of talent from outside Bangalore, hence a pent-up demand for apartments around the IT hub. "Rentals have gone up by 15-20% at Marathahalli, Sarjapur, Whitefield and Outer Ring Road compared to last year. Rentals in pockets of North Bangalore have also moved up," said Sunil Simon, proprietor of property consultancy firm Aaron Associates.
Post-slowdown, the market witnessed a correction in residential space. The recovery was felt in luxury and mid-sized apartments, lending itself to a moderate increase in rentals. "Rentals in high-end apartments like Epsilon, Palm Meadows, Prestige Bougainvilla and others have seen a revision. Newer developments, especially gated communities, have witnessed an increase in capital values. That's also reflecting in the rentals," said Ram Chandnani, deputy managing director, South India, real estate consultancy CB Richard Ellis.
The city's rental graph has moved up in traditional IT hubs like South and East Bangalore too. Residential layouts in Koramangala, Hosur Road, Bannerghatta Road, Sarjapur Road, Jayanagar, J P Nagar and Banashankari have witnessed 10 to 15% jump. A similar trend is seen in pockets of East Bangalore, including parts of Indiranagar, Airport Road, Fraser Town, Cooke Town, Lingarajapuram, Marathalli, HRBR Layout, Banaswadi, Old Madras Road, K R Puram, Brookefields, Hoodi and Whitefield.
But the reverse happened in 2009. IT firms froze recruitment plans. As a result, the job market was shaky and spending power shrank. Oversupply in Sarjapur, Outer Ring Road, Whitefield and Marathalli forced apartment owners to press the panic button. They offered steep discount on rentals to combat weak consumer sentiments. Prices during the slowdown tanked by as much as 35%, said real estate brokers. "Apartment owners in Palm Retreat or Brigade Metropolis expected 6 to 7% return on investments as they had purchased flats at a premium. They only got 3% return then. But things are looking better now," added Chandnani.
On the flip side, Metro rail work and congestion in the central business district of MG Road, Richmond Road, Residency Road and Lavelle Road, to name some areas, has pushed down rentals by 10-15%. "Villas demanding rentals close to Rs 1.5-2 lakh have dropped by 20% compared to a year before," said regional director (south) of Knight Frank India, Naresh Dandapat.
A Knight Frank research estimates that the city will witness a residential supply of 38,000, translating to 72 million sqft between 2009 and 2011. Around 53% of this supply will be 3-BHK apartments and 30% will constitute 2-BHK ones.
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As large number of IT companies are thereby seen to open up over here, hence the face of the Bangalore has thus turned into the rainbow of colors. Investing on the properties over here is considered to be a wise decision, because this city is considered to be one of the preferred investment destination.
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