Hyderabad: Madhapur emerges as thriving hub for Mindspace Business Parks REIT
As the city's real estate market continues to thrive, Mindspace's leasing activities in Hyderabad have contributed significantly to its overall growth and market value.
Hyderabad: Mindspace Business Parks REIT, one of the largest Grade-A office portfolio holders in India, has reported robust leasing results for the second quarter of the fiscal year 2023-24 (Q2 FY24), with a particular emphasis on its properties in Hyderabad.
As the city’s real estate market continues to thrive, Mindspace’s leasing activities in Hyderabad have contributed significantly to its overall growth and market value.
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Gross leasing during Q2 FY24 in Mindspace Madhapur was a standout performer. This bustling tech hub attracted technology development tenants, with a remarkable lease of approximately 150 thousand square feet (ksf). Additionally, Mindspace Madhapur reported another leasing achievement of 92 ksf in the same quarter, taking the total leasing in Mindspace Madhapur to approximately 350 ksf, further cementing the city’s reputation as a thriving commercial hub.
The city plays a vital role in Mindspace REIT’s portfolio, with a total leasable area of 14.1 million square feet (msf) (including 1.0 msf at Pocharam), representing 43.7 per cent of the company’s overall portfolio. The market value of Mindspace’s Hyderabad assets stands at an impressive Rs 107 billion (including 2 bn of Mindspace Pocharam).
According to the report, Mindspace Madhapur offers a leasable area of 13.1 msf, of which 9.6 msf is already completed and boasts a committed occupancy rate of 91.9 per cent. Mindspace Pocharam, another property, offers 1.0 msf of leasable space, of which 0.6 msf is already completed, with a committed occupancy rate of 37.5 per cent.
Furthermore, Mindspace is actively gearing up for a demand resurgence in Hyderabad, with ambitious redevelopment and expansion plans for Mindspace Madhapur.
The 1A-1B redevelopment project with a leasable area of 1.3 msf is currently in the excavation phase and is estimated to be completed by Q4 FY26. The Experience Center project, with a leasable area of 0.13 msf, is currently in the basement works phase and is expected to be completed by Q3 FY25, with a balance cost of Rs 1,000 million. The 7/8 redevelopment project, offering 1.6 msf of leasable space, has already completed demolition and is projected to be completed by Q4 FY27, with an estimated construction cost of INR 8,032 million.
The Commerzone Raidurg property, offering 1.8 msf of leasable space, is a success story in itself. It has already been completed, with 1.8 msf leased and rent commencement for Phase I and II.
In Q2 FY24, Mindspace Business Parks REIT reported revenue from operations in Hyderabad amounting to Rs 2,326 million, reflecting significant growth compared to Rs 2,056 million in Q2 FY23.
Key updates from the Mindspace’s Q2 FY24 report highlight the strong leasing activity in Hyderabad, driven by both new entrants and expansion activities from existing tenants.
Madhapur has emerged as the most sought-after market in Hyderabad, benefiting from its superior connectivity and well-established infrastructure.
“In the first three quarters of CY 2023, the locality accounted for approximately 78 per cent of the city’s net absorption. While IT/ITeS companies have traditionally driven leasing activity in Madhapur, recent years have seen a diverse range of industries, including BFSI, coworking, telecom, and healthcare, expanding their operations in this thriving submarket,” the report stated.
It further stated that rents in Madhapur have demonstrated consistent growth, with a Compound Annual Growth Rate (CAGR) of approximately 4.5 per cent between 2016 and the first nine months of CY 2023.
