Mumbai’s luxury apartments, the abode of the rich and famous in the business world, have seen a sharp drop in the rentals. A survey of the top 10 luxury buildings shows that the rent expectations of the owners have come down by 10-15 percent with room to negotiate. In most cases, the final cut is as sharp as 20-25 percent.
The broker community feels that the big hit has come in the large size apartments (read 3-4 BHK) as their ticket size is too high spanning from Rs 2.5 - 10 lakhs per month depending on the building and its amenities.
Buildings like Kalpataru Horizon in Worli which charged a rent of Rs 4.5 lakh for a three-bedroom in 2008 has the same 3- BHK flat available for Rs 2.75 lakh per month, reduced from Rs 3.25 lakh recently. Planet Godrej where top bank CEO, professionals, and Godrej family members stay saw a sharp drop in 3 BHK rent from Rs 2.7 lakh to Rs 1.75-1.6 lakhs in the last few rental agreements. Star-studded BeauMonde, Ahuja Towers in Prabhadevi, Samudra Mahal where Anil Agarwal, Narayana Murthy own properties have seen a sharp drop too.
Most apartments in the range of Rs 2.5-5 lakhs have seen the owner’s expectations reduced by Rs 50,000 while larger have seen a one lakh reduction to begin negotiations with. Owners are also more flexible to late payments and waivers in the interim to help tenants tide over a financial crisis.
Most landlords want the tenants to stay even at a lower cost to get constant rental cash as once vacated it might be difficult to get an occupant with the ability to pay rent for a luxury apartment.
In the emerging trends, owners prefer long lock-ins and stable companies over high rental values. Those who earlier preferred only a company lease are open to engaging with individuals. Landlords who let out to expatriates only are now open to Indians as well. A lot of it is defined by the demand and supply dynamics and cash conservation, by and large, owners choose to rent than sell at a distressed value. The drop in rentals also shows that overall property rates have dropped and distress sale cannot be ruled out.
Rentals of premium buildings in Sobo, a commonly used term for South Mumbai, have dropped substantially due to the inability of the residents to pay high rents due to financial hits because of the COVID-19 crisis. Job cuts of bulge bracket professionals have also added to the slide.
The broker community feels that the big hit has come in the large size apartments (read 3-4 BHK) as their ticket size is too high spanning from Rs 2.5 - 10 lakhs per month depending on the building and its amenities.
Buildings like Kalpataru Horizon in Worli which charged a rent of Rs 4.5 lakh for a three-bedroom in 2008 has the same 3- BHK flat available for Rs 2.75 lakh per month, reduced from Rs 3.25 lakh recently. Planet Godrej where top bank CEO, professionals, and Godrej family members stay saw a sharp drop in 3 BHK rent from Rs 2.7 lakh to Rs 1.75-1.6 lakhs in the last few rental agreements. Star-studded BeauMonde, Ahuja Towers in Prabhadevi, Samudra Mahal where Anil Agarwal, Narayana Murthy own properties have seen a sharp drop too.
Most apartments in the range of Rs 2.5-5 lakhs have seen the owner’s expectations reduced by Rs 50,000 while larger have seen a one lakh reduction to begin negotiations with. Owners are also more flexible to late payments and waivers in the interim to help tenants tide over a financial crisis.
Most landlords want the tenants to stay even at a lower cost to get constant rental cash as once vacated it might be difficult to get an occupant with the ability to pay rent for a luxury apartment.
In the emerging trends, owners prefer long lock-ins and stable companies over high rental values. Those who earlier preferred only a company lease are open to engaging with individuals. Landlords who let out to expatriates only are now open to Indians as well. A lot of it is defined by the demand and supply dynamics and cash conservation, by and large, owners choose to rent than sell at a distressed value. The drop in rentals also shows that overall property rates have dropped and distress sale cannot be ruled out.
3-4 BHK | Pre-COVID (in Rs/mth) | Post-COVID Expectation (in Rs/mth) |
Planet Godrej, Mahalaxmi | 2.6-3.6 lk | 2-3 lk |
Kalpataru Horizon, Worli | 3.8-4.5 lk | 3.2-4 lk |
Samudra Mahal, Worli | 6-7 lk | 5.5-6.5 lk |
NCPA, Nariman Point | 5.5-6.5 lk | 5-6 lk |
Raheja Vivarea, Mahalaxmi | 3.75-5.5 lk | 3.2-4.5 lk |
Raheja Vivarea, Mahalaxmi | 4-6.5 lk | 3.75-5.5 lk |
BeauMonde, Prabhadevi | 4.5-8 lk | 4-7 lk |
Ahuja Towers, Prabhadevi | 9 lk | 8 lk |
Raheja Legend, Worli | 12 lk | 10 lk |
First Published: Jun 5, 2020 1:45 PM IST
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