Opening of Whitefield metro line: Rentals go up

The report by Colliers titled, Bengaluru Metro Rail: Key office market impact, has predicted an 8 to 10% increase in rental premiums for Grade A office properties by the year 2024

Sowmya Raju | NT

Bengaluru: A leading diversified professional services and investment management company has predicted an 8 to 10 per cent hike in rentals for top grade office properties by 2024 along the newly inaugurated Whitefield Bengaluru Metro purple line.

While several people have welcomed the new metro line, a large section of them, especially those living in and around Whitefield are now talking of collateral damage the project might inflict on them by way of a rise in rentals for residential complexes in the area. The report by Colliers titled, Bengaluru Metro Rail: Key office market impact, has predicted an 8 to 10 per cent increase in rental premiums for Grade A office properties by the year 2024.

The report further stated, “Whitefield has witnessed a steady rise in rentals over the years, despite the pandemic hampering the demand during 2020-21. Capital values have increased more than 5% annually since 2011 (Planning stage of the metro). Rentals saw a stark rise of 50% during the 2017-2019 period, just after the construction of the metro work began. The rental growth was hindered during the pandemic years, however, will likely pick up pace as the metro project nears completion.”

An owner of a private PG in Whitefield said, “We have increased the rent amount by Rs 1000 for everyone staying here. The value of land and lodging has increased rapidly after the commencement of the metro here and is expected to go up in the coming future and all the other PGs near us have also increased the rent.” Whitefield has been on developers’ radar for a decade led by the availability of large land properties, lower land rates, and attractive ROI.

While Whitefield continues to be the second-largest micro market in the city owing to the several numbers of IT companies, the supply has been outpacing demand due to a lack of infrastructure development and poor connectivity to other parts of the city, leading to elevated vacancy levels.

However, it is expected that Whitefield will see a surge in occupiers’ activity once the metro project gets fully operational here. With several companies calling their employees back to the office and the commencement of the metro station, landowners, homeowners and PG owners saw an opportunity to increase the rent drastically owing to the demand.

“The rise in the rent was anticipated in the areas where the majority of the software employees live. However, the rent increase is more than Rs 1000. Flats which were at 30k per month are being rented out at 50k per month,” said a flustered IT employee whose rent has been raised recently. A software engineer who stays in Whitefield has seen his rental expense increased by Rs 1500. He said, “I had to rethink my budget and sometimes have to miss out on recreational activities. I will also be unable to save as much as I used to.”

Another employee who stays in a flat near Whitefield said, “The rent has not been increased for me yet, but it is only a matter of time before my rent is also increased because most people who choose their residence outside Whitefield even though their office is there and the demand here is also slowly increasing.”

Prime Minister Narendra Modi inaugurated the most awaited Whitefield metro station in Bengaluru last month, making Bengaluru the city with the second-largest operational metro network after Delhi.