When Sunil Gowda was looking for a 1BHK apartment for rent in Bengaluru, he found more than 70 percent of such apartments in popular areas are like shoeboxes with no provisions for ventilation.
"Surrounded by other buildings on three sides, one of the apartments I discovered had no windows. And the broker said the door will serve as the window," he added.
To his horror, most buildings in Ejipura, next to Koramangala, shared common walls on at least two sides, ruling out windows for allowing ventilation or light.
Since last year, the demand for 1BHKs in the city centre has gone up by 40 percent, local brokers say. Additionally, due to a space crunch, their sizes have shrunk by 30 percent over the last few years.
The rise of the matchbox apartment
About a decade ago, 1BHKs were a rarity in Bengaluru and the handful present at that time were pretty large. Today, new launches are a fraction in size yet command higher rents, Sunil Singh, Director of Realty Corp said.
In prime areas like Indiranagar or Koramangala, a 1BHK apartment of about 400-450 sq feet will cost Rs 20,000- 25,000, with fully furnished apartments going up to Rs 30,000 a month.
However, the rent for most of the 2BHKs in these areas are above Rs 40,000-45,000. "With offices opening up, most of the employees coming back prefer to rent 1BHKs to get the cost advantage, thus pushing up demand significantly," Singh added.
However, in the city centres, especially close to the IT corridors in the east and north, there is a severe shortfall in supply, while the availability is better in the outskirts or growing suburbs like Hennur or Begur at a reasonable monthly rent of Rs 15,000.
Maximising rental yield
Given the demand, local brokers say, at least two apartment owners in Indiranagar and Koramangala have converted their car garages into small 1BHKs for a rent of about Rs 10,000-15,000. While this may be an unusual case, many others are buying old homes in Bengaluru and converting them into multiple 1BHKs. Singh said three such deals closed recently in HSR Layout, Indiranagar and Jayanagar, where the new owners are redeveloping old houses into 1BHKs to maximise their rental potential.
"Even if they spend Rs 3 crore in redevelopment, he will easily get a monthly rental return of Rs 3-3.5 lakh from four 1BHK apartments on each of the three floors," Kiran Kumar, Vice President of Hanu Reddy Realty said.
In the process, the size of a typical 1BHK has shrunk by 50 percent compared to what it was about six years back. Even the terrace portions are being utilised as 1RK or studio apartments, basically a room, kitchenette and toilet, which are being rented close to the city centre at a whopping Rs 15,000-20,000 per month. However, brokers say that most of them are fully furnished and have much more breathable space than existing 1BHKs.
At this pace, Singh believes, if the demand continues without fresh 1BHK inventories being added, Bengaluru is set on the path for "coffin" apartments like in Tokyo. Measuring about 8 feet in length and 4.5 feet in height, such ‘homes’ are basically meant to crawl into and sleep, with tenants sharing common amenities like bathrooms. However, they are considered affordable in Japan’s capital, at a rupee-equivalent rent of Rs 30,000-40,000.
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