NEW DELHI: Among the top metro cities, IT-dominated Bengaluru had the highest rental yields at 4.45% in the first quarter of CY24 (Jan-Mar). Mumbai came next with 4.15% in the same quarter, followed by Gurugram at 4.1%, showed real estate consultancy firm Anarock data.
The data showed rental values in Bengaluru’s key areas have been rising inexorably after IT companies’ return to office call. The city’s rental yield in pre-Covid 2019 stood at 3.6%, which amounts to a growth of 24% in this period. Mumbai’s rental yield was 3.5% in 2019 and Gurugram was at 3.5%.
“Residential rental yields in India had chronically stagnated before the Covid-19 pandemic, with the national average at just 3% for many years,” says Santhosh Kumar, vice-Chairman – ANAROCK Group. “With post-pandemic rental demand soaring after offices resumed, rental yields are heading north too. IT-dominated cities including Bengaluru, Gurugram, Pune, Noida, and MMR have seen major upticks in rental values, and therefore yields.”
In the prominent localities of the top 7 cities, there has been an average jump of 4-9% in residential rents in Q1, 2024. Considering that the typical annual rise is 5-10%, this is significant and while it bodes well for landlords, it signifies a worrisome element of cost of living inflation for tenants.
The data showed that in Sarjapur Road (B’luru), the average monthly rent in Q4, 2023, stood at Rs 31,600 for a standard 2 BHK flat of 1,000 sq. ft. In Q1, 2024, it went up to Rs 34,000 month. Whitefield saw average monthly rents going up from Rs 30,200 in Q4, 2023, to Rs 32,500 in Q1 2024, an 8% jump.
