Higher rise in residential rentals in Delhi, Mumbai

Residential property rentals in Delhi and Mumbai increased sharply between 10 and 25 per cent and between 5 and 10 per cent respectively during January-March 2004. According to real estate consulting firms, while commercial property rentals in Delhi rose around 20-25 per cent while in Mumbai, commercial property rentals have failed to record any substantial increase.

Cushman and Wakefield executives say, "Rental variation stood in the
range of 10-25 per cent for the capital's prime and grade A residential properties
during the January-March quarter as against the same period last year."

Anuj Puri, managing director, Chesterton Meghraj (C&W) said, "Commercial
rentals in Delhi region continue to be driven by malls and business process outsourcing
units." The rise in capital values against the peak value of 1997 for posh south Delhi colonies like Vasant Vihar, Golf Links and Westend, coupled with fairly decent rental yields, have lured a lot of small investors into buying properties in these areas.

However, the rental values in Gurgaon for prime and grade 'A' residential properties registered an increase of 35 per cent Chesterton Meghraj's Puri added that satellite cities like Gurgaon and Noida, would continue to offer quality residential developments. "Gurgaon is expected to have an edge over Noida due to the presence of large developers like DLF, Unitech, etc," he said.

C&W predicted that large scale new constructions in Gurgaon and Noida
will support the increased demand from users in the mid-budget segment. The
demand for condominium style housing in the suburban locations, which offer
cost efficiency and good residential infrastructure, would increase in 2004. The
rental values in Gurgaon for prime and grade 'A' residential properties will register
an impressive 35 per cent increase.

Meanwhile, rentals in Mumbai's residential areas have risen 5-10 per cent in the January-March quarter. Certain suburbs like Malad and Powai have seen a rise in rentals. But, there is no considerable increase in the commercial property rentals.