Expats Relocate; Rentals of High End Villas Fall

Bangalore: With the increasing supply of units and the decrease of the expat community’s leasing deals by almost half, the rentals of high end villas in Bangalore now see a fall of over twenty five to thirty percent over the last one year. This data has been revealed by city based brokers and other multiple global real estate consultants, reports Anshul Dhamija of TNN.

Palm Meadows, one of the most popular locations in the city now sees a fall in the value of its rentals which have decreased from 4 lakh in the last year to 3 lakh this year, according to L J Hooker India, a property consultant.

Rents in Whitefield which have been the highest and most popular till now have also seen a fall from their early rates to much lower ones today.

"Budgets for most corporate 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, L J Hooker India, reports Economic Times.

He has also estimated that the number of expats that have got them relocated to Bangalore is only fifty this year as against a hundred a year ago. "European companies in particular have lowered their budgets," added Moore.

According to Prashanth Sambargi, a partner in Mars Realty, a realty estate advisory firm, one reason behind this fall is that corporate now prefers bigger apartments for their CXOs due to which the value of high end villas have faced a decline of 30 percent.

"Many companies have removed accommodation from their HR policy (which was given over and above the CTC)," said Sambargi.

"Since Bangalore is an end user market, the supply of rented units would be only about 20 percent of the total organized supply," said Ram Chandnani, Deputy MD-South India, CBRE South Asia, a global consultancy firm.

However, a stable rental growth of 5 percent to 15 percent has been seen in the city’s mainstay apartment market, in places like Sarjarpur Road, Outer Ring Road and Whitefield. "The large number of jobs created particularly by the IT/ITeS sectors has triggered the growth in these areas," observed Satish BN from DTZ India.

Also Read: India's 13 Posh Localities Where the Rich Reside