In Mumbai, lease rentals are on the rise with apartments at Malabar Hill finding a multinational licensee on an effective rent of Rs 1.2 lakh per month. The other high value lease transaction in the last quarter is one of a foreign consulate paying Rs 2 lakh per month for a three bedroom apartment off BD road. The effective yield in these buildings have gone up to nine per cent from six per cent in the the corresponding period last year according to the report. The developers in the metropolis have been careful to develop in all the three segments (residential, commercial and leave & licence) of the property market.

Bangalore, according to the Knight Frank report, continues to be buoyant due to the software companies. Residential properties are on demand with a huge influx of IT profesionals swarming down on the city.

The demand for good quality apartments on a leave and licence basis has improved considerably with flat owners unwilling to lease out their apartments at rates that existed six months ago. The report says that a 3BHK in Great Eastern Chalet was leased out for Rs 25,000 per month while today an identical flat in the building fetches a rental of Rs 30,000.

In Delhi, the supply still exceeds demand according to the Knight Frank report. Many of the small-time builders like the Uppals, Salujas, and Bansals are teeming up with land owners to develop and renovate property.

While the large developers like Unitech, DLF and Ansals are concentrating on group housing projects for middle class in South City Gurgaon. Since there is an over supply, Delhi is seeing a drop of 30 per cent to 35 per cent in effective rentals.

Pune seems to replicate the trends in Delhi. Large quantity of residential supply in Pune refuses to allow values to rise. The Kalyaninagar area in the city has tremendous activity with the Kumar group, K Raheja Corp and the Vascon group putting up large scale housing projects.

With tremendous amount of good quality supply flooding the market, lessors have a a good range to choose from. High value rental transactions are few and far between. In Banglaore, the demand for residential property for outright purchase and leave and licence basis continues to be strong. Values of prime residential properties are at their five-year lows and are comparable to prime values in smaller cities like Pune and Hyderabad, according to the KF report.