DELHI: Guess what's the new fad among rich Indians? Renting a bungalow in the verdant Lutyens' Delhi, where the country's high and mighty live.
Last month, Mumbai-based businessman Kamal Morarka rented a Lutyens bungalow on central Delhi's Prithviraj Road for 18 lakh a month. Not far away on Aurangzeb Road, fellow businessman and Trinamool Congress MP KD Singh pays 13 lakh for another bungalow.
"It's about the charm of having a home in Lutyens' Delhi. Every businessman wants to be here," says Morarka, who is yet to move in. The owner of a food processing and beverages business and a former Cabinet minister wanted to buy a bungalow, but finally ended up renting one after efforts to identify a good, dispute-free property went in vain.
Realtors operating in Lutyens zone are surprised at the rising demand. They would not share names of clients, but said some are businessmen who have made it big in recent times. "They have money enough to buy these homes, but the market is overpriced so no deal is happening," says Mudassir Zaidi, national director at Knight Frank India.
Renting Picking up in SoBo Too
Knight Frank India is a property consultant that brokers sale and renting of high-priced homes.
The owners of a bungalow in the Connaught Place area are negotiating a rent of around Rs 40 lakh for their 15,000 sq ft bungalow. Owners of another large property on Amrita Shergill Marg are also expecting a rent of Rs 40 lakh a month, say realtors who asked not to be named.
Renting has also picked up in South Bombay (SoBo), Mumbai's priciest residential district. But the rich here pay more for sea-facing high-rise apartments instead of bungalows, which are far and few. The owner of a 4,500 sq ft villa on the Grand Paradi Towers in Malabar Hills is negotiating a rental deal of Rs 15 lakh a month, which will be the city's biggest rental deal ever.
Most bungalows on prime localities such as Pedder Road, Carmichael Road, Altamount Road and Nepeansea Road are self-occupied by old families and businessmen, who are averse to renting them out. "These bungalows come into the market mostly to be sold to builders who construct high-rises," says Akhil Kapur, owner of AJ Housing, a real estate broker who operates in SoBo. Ashok Narang, partner at Mumbai-based real estate property firm L Lachhmandas & Co, says demand for rentals from corporates has been bouncing back in the past few months. "Also, individual businessmen who were looking at buying apartments in SoBo earlier are now thinking of renting to conserve cash for their businesses," he says.
"In the current economic environment, renting works out much cheaper compared with buying," says Anshuman Magazine, managing director of property advisory firm CBRE. Rentals for bungalows in South Mumbai in areas such as Malabar Hill, Nepeansea Road and others range Rs 10-12 lakh a month, while apartments in the area such as NCPA Apartments at Nariman Point, Kamal Mahal, Tenerife and Usha Kiran fetch rents of Rs 5-6 lakh a month. In a recent transaction, an apartment in the high-profile Haveli building was rented out for Rs 8 lakh a month.
In comparison, rentals of Lutyens Bungalow Zone properties (in Delhi), which are bigger in size and offer more privacy, are way higher. Around 100 of the 1,100 bungalows in the leafy central Delhi neighbourhood spread over 1,250 acre, are owned by businessmen such as LN Mittal, Navin Jindal, KP Singh and Sunil Mittal. The remaining 1,000 are occupied by politicians, bureaucrats and army officers, and are not allowed to be sold.