Rentals Fall As Overseas Companies Cut Back
As one of the two major emerging markets in Asia, India has been the focus for major investment programmes from many global multinational companies over the past few years.
Bangalore is the country’s hub for the IT sector and as such is a location for many expat workers. However, villa rental yields are now falling as prices tumble due to companies cutting back on their overseas expenditure budgets.
Chief executive officer of property specialist L J Hooker India Alexander Moore explained: “Budgets for most corporates have been reduced reflecting the tighter global markets. We have also seen many companies trying to reduce expat headcounts to save money.”
The company has reported that rental values at one of the city’s most sought after addresses, Palm Meadows, have fallen by 25% a month.
Over the past year as a whole, high-end villa rents have witnessed falls of up to 30%, a situation made even more difficult by an increase in supply.
Moore estimated that only 50 expats relocated to Bangalore in the first three months of 2013, whereas the same period a year ago saw double that number.
However, at the top end of the scale the picture is slightly different, with major corporations tending to rent bigger spaces for their chief employees, but opting for apartment style accommodation in favour of villas.
This is leading to an increase in rental costs for this type of property, in some cases seeing rises of 5% to 15% depending on size and location. The Outer Ring Road and Sarjapur Road in the middle and lower end of the apartment market have seen the highest rental increases.
The highest residential rental of all, which was reported last year, was for a house in the gated community of Epsilon, which is the city’s equivalent of Beverly Hills in LA.
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