Tech firms' back-to-office drive fuels rental yields to 4.45% in Bengaluru

Rental values skyrocket: IT companies' return to office call has prompted a steep rise in rental housing demand in top cities, leing to a notable surge in average rental values and rental yields. Bengaluru les pack with a rental yield of 4.45 per cent in Q1 2024. This growth trend is furr highlighted by city's pre-Covid 2019 rental yield of 3.6 per cent, reflecting a 24 per cent increase over this period, according to Anarock data.

Mumbai took second spot with a rental yield of 4.15 per cent in Q1 2024, exhibiting a notable growth of 19 per cent from its 2019 figure of 3.5 per cent. Close on its heels, Gurugram follows suit with a rental yield of 4.1 per cent in last quarter, showing a comparable increase from its 2019 value of 3.5 per cent.

Where are rental markets booming?

Notably, prominent localities in Bengaluru such as Whitefield and Sarjapur Ro witnessed 8 per cent quarterly growth in rental rates.

In Mumbai, story is no less compelling. city's realty market has been buoyed by a resurgence in rental demand, fuelled by economic recovery and renewed investor confidence. Areas like Chembur and Mulund experienced a 4 per cent growth in rental rates.

Gurugram closely follows Mumbai with a rental yield of 4.1 per cent, signalling a notable uptick from 2019 figures. Or key cities, including Noida and Delhi, have also witnessed significant growth in rental values, albeit at a slightly lower pace compared to Bengaluru and Mumbai.

Landlords' gains, tenants' strain

rental value growth in Q1 2024 highlights a broer trend of robust recovery in India's real estate market. Average rents in prominent localities across top seven cities surged by 4-9 per cent quarter-on-quarter, outpacing typical annual increase of 5-10 per cent. While this trend spells good news for landlords, it raises concerns about rising cost of living for tenants.

latest data paints a bullish picture of India's rental real estate market, with Bengaluru leing charge in rental yield growth, closely followed by Mumbai and or key cities. As economy continues to rebound and demand for rental housing remains strong.