Rentals on a stable curve in Ludhiana
Local supply and demand dynamics are the determinants for the growth patterns in the commercial and residential rentals in the Ludhiana real estate sector.
The demand remained stagnant in the commercial segment leading to stagnation in the commercial rentals in most locations. In the residential segment, demand consistently increased for rental accommodation pushing up rentals. “The rentals depending upon the segment have moved in different directions. The location of the property impacts the rental growth, generally, the inner developed parts of the city record higher growth than the periphery in terms of rental movements,” said Deepak Badyal, president, Ludhiana realtors’ association.
The commercial rentals vary depending up on the location. In most areas supply has increased. While at some locations, the increased demand from retail outlets, hospitality industry and financial sector has helped absorb this increased supply, but in other areas the vacancy rates have increased in the last couple of years. “On Malhar road, opening up of restaurants have helped in stabilising rentals. Similarly, in the Feroze Gandhi market, business have helped keep rentals moving in the upward direction or stable. Educational institutions coming up in Model Town extension has helped keep the commercial rentals up in this area. As the organised commercial market is very less in the city so the rental also vary widely,” said Badyal.
The commercial rentals depending up on the location vary widely from ₹30 per sq ft in the periphery to ₹150 per sq ft in the inner developed areas The rentals are hovering between ₹30 per sq ft and ₹150 per sq ft for the last couple of years. Most landlords are trying to retain the older tenants and so, the increase in the rentals is only the annual negotiated increase.
The residential segment, however presents a completely different scenario in the industrial and commercial capital of the state. “The residential rental, though varying widely, have consistently increased in all the areas of the city, whether periphery or inner developed areas. The slow down dragged down the demand for buying new houses but has helped increase the demand for rental residential accommodation. There is also scarcity in supply in each rental segment. This has also pushed rentals up,” said, PS Sethi, a local real estate consultant.
“The monthly rentals for a 3-BHK ground floor house increased from ₹15,000 – ₹25,000 in the inner areas to ₹25,000 – ₹50 000 in the last four-five years Sarabha Nagar, Rajguru Nagar, BRS Nagar, Gurdev Nagarthe rental for 3-BHK is around ₹30,000 per month to ₹50,000 per month. For an independent kothi the rental may vary between ₹40,000 to ₹75,000 per month,” said Badyal.
The periphery is the middle income group destination for rental housing. In the new upcoming areas, rent for a 3-BHK varies between ₹15,000 per month to ₹20,000 per month. In the still out areas, the monthly rental for 3-BHK can drop to ₹12, 000 to ₹20,000.
The rental growth is adding value to attraction of residential property for investment. “In the coming months, with the economic outlook changing we might see investors entering the residential segment to explore the prospects of earning investment returns in the form of rental incomes. This might revive the capital values of residential properties in the city,” said Sethi
While the residential rentals consistently, the commercial rentals in Ludhiana are stagnant for the last couple of years