Bengaluru water crisis: Bengaluru rental demand shifts away from IT corridor of Whitefield

Bengaluru water crisis: Bengaluru rental demand shifts away from IT corridor of Whitefield

Once booming with a rental yield of 4 percent, Bengaluru’s ongoing water crisis has knocked the eastern IT corridor of Whitefield off the table for prospective tenants and investors, according to local brokers.

Experts say most large apartment complexes in eastern Bengaluru, which already rely on borewell water, are facing a water shortage. Hence, more investors are looking at the north and central IT corridors.

For example, a family that wanted to invest in a rent-yielding asset in Whitefield has changed their mind over the last month. “What if next year is hotter and the water crisis becomes a recurring issue, with a depleting groundwater table? It is better to invest in central Bengaluru, where piped water is still available,” they say.

Piped water from the Cauvery river is only available in some areas, and homes in areas brought under city limits in 2007 continue to rely on borewells, which have been failing because of the falling water table due to overuse.

In February, Chief Minister Siddaramaiah said that the ongoing Cauvery Project Phase-5 — set to be implemented by May 2024 — will provide 110 litres of water daily to each of the city’s roughly 12 lakh residents.

For rentals, most tenants are looking at parts of central Bengaluru — where piped water is still available — and also at northern Bengaluru’s Hennur and Hebbal areas. Currently, a 2 BHK costs Rs 27,000-30,000 per month in the north, almost 15 percent lower than prime locations like Indiranagar and Whitefield.

Against the backdrop of steadily rising real estate prices, experts say the water situation has worsened due to  unplanned construction and infrastructure expansion.

Declining rents

Kiran Kumar, VP of Bengaluru-based Hanu Reddy Realty, says the water crisis has increased the  dependence of housing complexes on private water tankers, which now charge a premium.

“This has increased the maintenance cost of apartment owners in these complexes by at least Rs 6,000 per month,” he explained, adding that the rentals in Whitefield have dropped by 10 percent compared to January this year.

Indeed, 24 by 7 water supply is the top priority for tenants and homebuyers in Bengaluru today. “Most tenants  ask about piped water supply from Cauvery, even before they discuss the rent, or location,” Kumar said.