Hyderabad grabs top spot in office space absorption surpassing Bengaluru

Hyderabad witnessed the highest quantum of office space absorption, around 8.2 million sft, in the country, surpassing Bengaluru for the top spot

Hyderabad: Hyderabad witnessed the highest quantum of office space absorption, around 8.2 million sft, in the country between April and September, surpassing Bengaluru for the top spot.

With several corporates and companies starting to call back their employees to office, either in a hybrid model or full-time, the office real estate market has gained momentum in the State capital.

According to a report released by Anarock, a real estate services company, the office space market in Hyderabad continues to be dominated by the IT/ITeS sector, accounting for around 39 per cent share of the total absorption. However, a considerable demand for office space also emanated from manufacturing or industrial occupiers and co-working space operators.

“Manufacturing/Industrial occupiers have gained ground by commanding a 22 per cent share in the market, followed by co-working providers taking up 21 per cent of the office leasing share,” the report stated.

As per the data, average citywide office monthly rentals stood at Rs 61 per sft. Banjara Hills and Hitec City areas saw the highest monthly rental of Rs 50 to 75 per sft followed by Begumpet, Gachibowli, Kokapet, and Uppal.

Some of the key transactions were that of Qualcomm leasing 1.10 mn sft in Commcerzone Wing 1 at Madhapur, PwC leasing 0.35 mn sq ft in My Home Twitza, ZF Technology leasing 0.30 mn sq ft in Phoenix Centaurus, and Bosch leasing 0.25 mn sq ft in Knowledge City.

Accounting for the highest share of 34 per cent in terms of new office space influx across the top seven Indian markets between April and September this financial year, the city saw an 82 per cent rise compared to the new office supply in the corresponding period the previous year.

Of the net office absorption, Hyderabad also recorded the second highest leasing activity (21 per cent share) in the country of 4.03 mn sft between April and September. The city also registered the highest year-on-year growth of 152 per cent in the net office space absorption.

Prashant Thakur, Senior Director and Head of Research, Anarock, said that Hyderabad, Bengaluru, and Chennai collectively comprised 66 per cent overall share in new office supply share.

The report noted that the trend may continue in the upcoming quarters as long as there are no major headwinds including layoffs or a global recession as anticipated.