Is North Bengaluru The New Favourite Hotspot Of Tenants?

Introduction:
The region is becoming a popular spot among homebuyers.

Proximity to workplace has traditionally been one of the key factors ruling the rental market. Which is why, areas like Whitefield, Sarjapur Road, and Electronics City have always been favourites amongst Bengaluru’s young IT employees. However, a recent trend indicates a shift in this dynamic. Areas that are a little away from employment hubs but boast of sound connectivity, are gaining popularity, especially in North Bengaluru.

The rental yields for North and East Bengaluru in Q3 2018 were 3.38 and 3.7 per cent respectively; in Q3 2023, the same were 4.48 and 4.41 per cent respectively, states data released by Meraqi Advisors Pvt. Ltd.

“North Bengaluru is a region that encompasses areas such as Yelahanka, Hebbal, Jakkur, Thanisandra Main Road among others, and has seen a significant uptick in real estate activity in recent times. The area has undergone significant development in recent years, with the construction of new flyovers, underpasses, metro stations amongst others. More so, the various IT parks—both operational and upcoming—along with the international airport have further driven demand, both from a rental and buying perspective. The fact that many companies in Bengaluru still work on a hybrid-work model, has also contributed to this increase in demand,” informs Ashish Sharma, city head – Bengaluru, Anarock Group.

North Bengaluru vs. other prominent areas
Anarock Research’s data also states that if we look at the rental yield in key IT hubs of the city, such as Sarjapur Road (which is in the eastern region), stands at 4.5 per cent as of Q3 2023-end while back in the same period in 2019, it was 3.65 per cent. Likewise, in Whitefield (which is in the eastern region), the rental yield presently stands at 4.41 per cent while back in 2019, it was 3.7 per cent. Thanisandra Main Road commands a rental yield of 4.48 per cent currently against 3.38 per cent in 2019. “However, in areas that have a mixed demand from IT and other sectors, such as Indiranagar and Koramangala, the rental yields are lower at 3.4 per cent and 3.37 per cent respectively; the key reason being the high capital values. Thus, we can see that the rental yield in northern areas is either at par or more than that of many prominent eastern areas,” adds Sharma.

The popular areas
Hebbal, Nagawara, Yelahanka, and Hennur are popular rental markets in North Bengaluru. “In Hebbal, Nagawara, and Yelahanka, the percentage increase in rental values is more than 50 per cent in the last five years. The announcement of Metro blue line has also led to an escalation of rental values,” adds Jhunjhunwala.

What’s next?
According to experts, residential rental yields in North Bengaluru are poised to witness a five to 10 per cent growth in 2024 depending on the location, property, builder type and other specifications. “Once the ongoing transport infra projects get completed and are operational as per the promised deadlines, the region has the potential to experience 30-40 per cent rental appreciation,” opines Ritesh Mehta, senior director (North and West), residential and developers’ initiatives, JLL.

Key reasons driving rental demand in North Bengaluru

1. “Improved infrastructure and connectivity: The area has seen significant improvements in infrastructure in recent years, with the operation of signal-free Outer Ring Road, completion of grade separators all along ORR, and the ongoing Bangalore Metro Rail. These have made it easier for people to commute to and from the area, making it an attractive option for those looking to rent a place;

2. Proximity to work centres: Many areas of North Bengaluru are at a brief distance from CBD and the eastern IT corridor; this makes it easier for the working population to commute. However, in recent years, the region has also grown into a business centre and houses a few IT parks;

3. Social infrastructure: Since the establishment of Kempegowda International Airport in Devanahalli, North Bengaluru has also experienced growth of top-class infrastructure. It has many shopping malls, restaurants, clubs, bars, IT parks, schools, and a lot more to cater to the rental population;

4. Capital values: As Northern Bengaluru is still an emerging market, the capital values of properties here are lower than those in Eastern Bengaluru, which is an already established market. And so the rental values are also lower in North Bengaluru as compared to its eastern counterpart,” shares Gorakh Jhunjhunwala, MD, Meraqi Adviors Pvt. Ltd.

Article Source: Times Property
Original Source link: https://tinyurl.com/ddvetkmz

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