In Bangalore, rentals of high-end villas have dropped over the past year, as leasing deals from the expat community have almost halved and supply of units has increased. Data shared by multiple global real estate consultants and city-based brokers show that rentals for high-end villas have fallen between 25 per cent and 30 per cent in the last one year.
Property consultant LJ Hooker India has reported that rental values at Palm Meadows, one of the city's most sought after addresses, have slipped to Rs 3 lakh a month from Rs 4 lakh a month a year ago. Property consultant DTZ India said that rents for premium villas in Whitefield, where rentals for the largest and the best units had risen to between Rs 2.5 lakh and Rs 4 lakh per month, are currently going at much lower rates.
Budgets for most corporates have been reduced reflecting the tighter global markets. We have also seen many companies trying to reduce expat headcounts to save money, said Alexander Moore, CEO, LJ Hooker India. Moore estimated that in the first three months of 2013, only 50 expats relocated to Bangalore as against a 100 reported in the same period a year ago. European companies in particular have lowered their budgets, said Moore.
The highest residential rental reported last year was Rs 4.25 lakh a month for a large house with a private pool in the gated community of Epsilon, known as the city's Beverly Hills. Two to three years back Epsilon saw some of its properties fetch rentals in excess of Rs 7 lakh a month, with one property rented by Cisco's globalisation head Wim Elfrink fetching a monthly rental of Rs 17 lakh a month.
Prashanth Sambargi, partner at Mars Realty, a city-based real estate advisory firm, added that corporates have moved to renting bigger apartments for their CXOs, one of the reasons why rental values at high-end villas have declined by 30 per cent. Many companies have removed accommodation from their HR policy (which was given over and above the CTC), said Sambargi.
At present Bangalore has approximately 1.5 lakh ready-to-occupy housing units from the organided real estate players with the split between apartments to villas being 80:20. Since Bangalore is an end user market, the supply of rented units would be only about 20 per cent of the total organised supply, said Ram Chandnani, Deputy MD-South India, CBRE South Asia, a global consultancy firm.