Healthy demand driving Hyderabad realty

Quantum jump to be seen in office, commercial, retail and logistics.

By Author  |  Published: 12th Dec 2017  12:05 amUpdated: 12th Dec 2017  12:32 am
Hyderabad Realty
FORGING AHEAD: A quantum jump will be seen in office, commercial, retail and logistics sectors. — Photo: Hrudayanand

Hyderabad: Hyderabad, the second largest urban agglomeration in the country, which had been rated best in terms of ‘Quality of Living’ by Mercer this year, is emerging as a prime hub for real estate attracting investors into all the asset classes- office, residential and retail. As India’s major IT/ITeS hub and a prime industrial corridor in south, the city’s realty sector is growing at a healthy pace, driven by optimism.

Highlighting the factors behind this phenomenal growth, Anshuman Magazine, chairman, India & South East Asia, CBRE said, “Hyderabad is fast emerging as south India’s realty hotspot. Political stability, State government’s proactive policies, growing occupier demand, improved infrastructure, quality educational institutions and the availability of a large talent pool have helped bring back attention to the city’s realty market.”

Telangana Government has initiated several reforms to build capacities in major cities of the State and attract investments into key sectors. This has reflected in the growth of realty sub-segments in the recent years. Hyderabad commands lowest rentals across top markets in south, witnessing a 108 per cent year-on-year growth in office demand in 2016 at 6 million sq ft from less than 3 million sq ft in 2015. The city saw 4.5 million sq ft leasing till the third quarter of 2017 (calendar year), which is estimated to touch 7-7.5 million sq ft by the end of this month.

Recognising the contribution that the IT/ITeS sector makes to the State’s economic growth, the Telangana Information and Communication Technology Policy Framework 2016 was released, which covers various sub-sectors within the IT sector.

Additionally, the Industrial Policy Framework 2014 identified ‘Transportation, Logistic Hub, Inland Port, Container Depot’ as one of the 14 thrust areas for investment, providing incentives such as preferential land allocation, project support basis investment, industrial parks and townships, fast-track approval mechanisms and tax sops/subsidies.

Additionally, Hyderabad witnessed significant infrastructure developments including the Hyderabad metro, multi-level flyovers, electronic manufacturing clusters and an integrated pharma city over the past two years. These policies, reforms and developments are aimed at attracting more investments into the city which will augur well, he observes.

He told Telangana Today, “There is abundant growth opportunity in office space. Other sectors such as pharma, financial services, data centres, logistics and manufacturing sectors are also adding up to office demand. And this will continue for some time. Global organisations continue to driving office growth.”

“New project launches will increase in the commercial space. Residential launches will purely depend on the pace of absorption. Retail and logistics improvement is also being witnessed in the region. Residential may see marginal growth compared to other sectors,” he added.

Apart from a robust commercial and industrial growth, Hyderabad is witnessing growth in retail space, with estimates that the organised retail stock to touch 10 million sq ft by 2019 from 4 million sq ft at present. The segment witnessed merely 11 per cent CAGR during 2011-16.

Traditionally recognised as an office market, Hyderabad is also witnessing renewed interest in logistics space in recent years. Logistics/warehousing for instance have grown at a rate of 93 per cent year-on-year and the demand is primarily coming from e-commerce, FMCG and pharmaceutical sectors.

Telangana which had been ranked No. 1 in Human Development Index has witnessed its capital recognised as one of the most affordable residential markets for residential buyers especially in the premium/luxury and high end/mid-end segments when compared to Bengaluru and Chennai.

He said, “Residential prices have not gone up in Hyderabad. This remains an attractive destination for investors. Low cost residential apartments are still available, which presents a competitive edge to the city.”