Mumbai Lease Market Review – September 2010

The lease rent market in Mumbai has imporved a lot over the past few months, definitely the market has shown substantial movement and transactions are being closed in most of the segments. Definitely, the market is feeling the impact, after the Corporate world downsizing and also hiring domestic employees rather than appointing Expatriates which usually cost the companies a lot more than the Indian Counterparts.

The present demand is seen in the locations which are close to the CBD’s and also locations which have good quality stock in the market. A lot of home seekers who are looking for lease options are looking at options to buy as well as they feel that the property rates will increase over a period of time and hence people who have taken a decision to reside in Mumbai for a long run have converted themselves from a lease to their own home buying.

The general perception among home seekers is that the leasing pricing have fallen and they will continue to fall further in locations where there is a lot of stock coming up but on the other hand the capital values of apartments has gone up more than 20% in the past 3 Months.

There is a lot of supply coming up in western suburbs and Executives/Expatrites who are looking for homes of 2/3 are getting pampered with the new blocks like Oberoi Springs, Rustomjee Ozone and a lot of new properties in Lake Homes and Nahar Amrit Shakti in Powai. Bandra West and Juhu seems still a hot favourite for Expatriates but between the 2 Juhu has better quality stock at competetive prices. The high end buildings in Bandra like Shimira, Narain Terraces, Chand Terraces, Raheja Bay, Raheja Sun Kist, Jivesh Terraces, Vastu, Quantum Park, Kismat, Zodiac have limited stocks available for apartments over 3000 sq.ft and priced in the range between 4-6 Lacs per month. Oberoi Springs in Andheri West suddenly being a new building has an over supply and most of the apartments which were available in the range of Rs.50,000 to Rs.75,000 Per month. A lot of Expatriates families have started staying in this complex and suddenly Andheri West is becoming a popular location with Expatriate Families.

Juhu has a good inventory as well and the quality of apartments is much higher than even compared to Bandra West. In Hiranandani Gardens, the only 2 buildings where rates have been consistent are Tivoli and Evita. In odyssey II where last year the transactions were done at 250000, the new rates established is 200,000 per month which is nearly a dip of 20%. In Powai, there is a huge oversupply considering a lot of Buildings are added up and apartments available on lease in all ranges.