For real estate investors in 2024, weighing rental yields across zones is key to identifying assets with maximum appreciation potential.
Gurugram, renowned as the Millennium City, has long dominated NCR’s office and residential landscape, where modern India works and lives. However, suburban regions like Manesar, Bhiwadi and Sohna Road are now offering serious competition driven by affordable housing and buoyant commercial activity. For real estate investors in 2024, weighing rental yields across zones is key to identifying assets with maximum appreciation potential.
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As per market estimates, Gurugram currently provides commercial rental yields of 7-9% for office spaces in Cyber City and Udyog Vihar and 2.5-3.5% for residential properties in Golf Course Road. In comparison, emerging suburbs offer yields upwards of 10% for commercial realty around independent IT/ITeS hubs in Manesar and 4-5% for housing projects along Sohna Road given lower property rates.
Certainly, Gurugram holds strong allure, led by established connectivity and more evolved social and retail infrastructure. Areas like Golf Course Road deliver premium luxury rentals, while Cyber City and Udyog Vihar boast the highest commercial demand from corporate occupiers. However, peaking property prices alongside stressed infrastructure constrain yields in core areas. Congestion issues are nudging companies to re-evaluate realty budgets, as work-life proximity gains priority too. This is providing growth avenues for suburbs to garner spillover demand.
Bhiwadi offers a compelling case. Upcoming metro connectivity alongside affordable rates for industrial plots and housing projects entice companies and labour pools. It’s proximity to Gurugram’s prime commercial hubs enables workers’ easy access too. As a result, Bhiwadi’s rental yields often surpass Gurugram across asset classes. Similar potential exists in Sohna Road’s residential pockets that provide budget homes just 22 km from Gurugram’s focal points. End-user preferences for extra space and community-centric projects in Sohna offering lower price points but good connectivity to Gurugram propel higher rental demand.
Likewise, Manesar has witnessed a spurt in commercial realty centered around independent IT/ITeS hubs, logistics and manufacturing. Competitive property and labour costs alongside infrastructure upgrades lend it cost advantages that boost demand.
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Evidently, Gurugram holds a prestige edge currently. But high entry and operating costs are renewing focus on its efficient periphery markets across suburban regions in NCR. Their intrinsic value drivers and growth momentum catalyzed by infrastructure development signal attractive rental yields.
The rental yield differential between Gurugram and its efficient suburbs indicates considerable room for positive convergence. While risks exist, early identification of progressive zones offers scope for outsized gains. By spotting these shifts before inflection points, savvy investors in 2024 can make strategic plays to tap the yield arbitrage. The time may be ripe to look beyond Gurugram’s gleam and magnify rental returns from NCR’s emerging periphery jewel.
