Hitec City dominates Hyderabad’s leasing market
Hitec City emerged as the dominant force in the leasing market during the second quarter of 2023, capturing an impressive 84 per cent share of the total leasing activity in the city.
Hyderabad: Hitec City emerged as the dominant force in the leasing market during the second quarter of 2023, capturing an impressive 84 per cent share of the total leasing activity in the city, according to real estate consultant Colliers India.
One of the notable trends in the Hyderabad market is the significant surge in the share of flex space in total leasing. In Q2 2023, flex space accounted for 17 per cent of the leasing activity, marking a substantial increase from a mere 3 per cent during the same period last year.
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This rise in demand for flexible workspaces indicates a shift in the preferences of occupiers, who are increasingly attracted to the flexibility, agility, and cost-effectiveness that such spaces offer.
However, alongside the positive leasing trends, Colliers report stated that there has been an increase in vacancy levels, rising by 470 basis points year-on-year. Despite the spike, experts predict that the levels will remain range bound in the next quarter, signalling a stable market.
Looking at the broader picture across the top six cities in India, office demand witnessed a 2 per year-on-year increase, reaching 14.6 million sft in Q2 2023. Bengaluru and Chennai led the demand, each contributing 23 per cent of the total leasing activity.
“As the market stabilises further with improved demand towards the latter part of the year, developers are likely to speed up their project completions,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.
Rental trends across major cities remained relatively stable, with minor changes in average rents. Hyderabad’s rental rates remained unchanged at Rs 73.6 per square foot per month in Q2 2023, compared to the previous year. This stability in rental prices indicates a balanced market in terms of supply and demand.
