Bengaluru, Nov 18
As organizations ask their employees to return to the offices, there has been a significant increase in the rents of both commercial and residential properties across the top six-eight cities, according to real estate consultancy firms and proptech companies.
The country saw the average housing rent go up by 5.2 per cent in the third quarter of 2022, with the rents seeing a significant increase in top cities including Bengaluru -7.3 per cent, Mumbai – 6.6 per cent, Greater Noida – 6.3 per cent, and Hyderabad- 5.2 per cent according to a report by Magicbricks.
NoBroker.com states that based on its data rents have gone up for residential as well as commercial properties. “In fact, rent rates across cities have gone up by 15-20 per cent. In gated societies, it is even higher, up to 40 per cent,” said Saurabh Garg, co-founder, and CBO, NoBroker.com.
Subhankar Mitra, MD, Advisory Services, Colliers India told businessline that the real estate sector is experiencing tremendous pent-up demand this year as businesses return to normal.
“As people move back to these cities, demand for properties has significantly shot up; additionally, this year, the developers have recorded good sales and better absorption, leading to an overall increase in the capital value of the properties, and consequently, the rental value has also gone up in a proportionate manner,” he explained.
Rebound seen stronger
Additionally, there is a greater influx of new residents to cities as a result of businesses continuing to hire more people. However, because of a demand-supply imbalance and the long-term stagnation of construction activity, rents have skyrocketed, said Garg. Moreover, the lack of high-quality Grade A office space has also contributed to this demand, added Mitra.
“With the return of the workforce, commercial real estate is rebounding stronger than ever. The trends in commercial real estate rentals are important. Also, there is a uptick in the demand for pre-leased commercial properties as rental returns from commercial properties are higher than those from residential properties,” noted Harsh Vardhan Patodia, President of CREDAI National.
NoBroker.com anticipates that over the coming months, rents will stabilize as supply begins to flow in. While Colliers expects commercial rents to stabilize in the mid- to long-term, residential rents will continue to rise due to market demand.