Hyderabad office space rebounds
Experts say industry-friendly initiatives by the State government ensuring ease of doing business (EoDB) are attracting new investments and thereby commercial realty is set to grow faster
Hyderabad: Growth of core sectors such as IT, life sciences, infrastructure, BFSI and engineering and new initiatives to boost a robust ecosystem for investors and occupiers is driving realty growth in Hyderabad. The city has seen all-round development across all asset classes, and significant growth in office space.
Experts say industry-friendly initiatives by the State government ensuring ease of doing business (EoDB) are attracting new investments and thereby commercial realty is set to grow faster. The city living index will continue to attract people from across the country, which will give a fillip to the housing sector.
Samson Arthur, branch director–Hyderabad, Knight Frank India, said, “Office space has shown a remarkable resilience. The Q3 positive index could not have been predicted at the peak of lockdown. The technology companies we are engaged with, have shown stability in their core sector. Those with clear visibility of business have commenced their office plans, albeit with reconfigurations of their new space requirements.”
Research shows the recovery in office transactions and new completions helped rental values in Hyderabad increase in Q3 2020. The city saw office transactions at 5,00,000 sq ft during the third quarter.
It is pertinent to note that Hyderabad accounted for close to 12 per cent of office space transactions in India during the first half (H1) of 2020. Driven by the dominating IT industry, the services sector continued to drive office space take-up with 53 per cent share.
The H1 of 2020 witnessed leasing activity to the tune of 1.7 million sq ft. By the end of the first half of 2020, the total office stock in the city stood at around 61 million sq ft. The demand for office space for medium-term is expected to rebound faster.
Several national real estate developers such as Prestige Group, Salarpuria Sattva, RMZ and Raheja are creating more Grade A office spaces in Hyderabad and expanding their footprint.
Wells Fargo leases over 1.3 mn sq ft office building in Hyderabad
Hyderabad: American multinational financial services major Wells Fargo & Company (with $1.92 trillion in assets) has leased an entire office building with more than 1.3 million sq ft space at DivyaSree’s Orion in Hyderabad, touted as one of the largest commercial real estate deals in India amid the Covid pandemic.
Sources say, the transaction is one of the biggest office space lease deals in the city so far, with Wells Fargo paying more than Rs 110 crore in annual rental for the built-to-suit office building, at a rate of Rs 70/sq ft/month.
The building which will have 21-23 storeys will house 10,000-12,000 employees. It is expected to be ready for fit outs in the next 6-8 months, and from there the company will take another 6-8 months for interior fit outs, making it ready for occupancy by end of 2021 or early 2022.
The agreement is for a lease tenure of nine years and the deal includes a rental reset clause at the end of every three years with 15 per cent escalation. Transaction advisor JLL India declined to comment.
“Hyderabad along with Bengaluru will bounce back with vaccine availability in the first half of next year. Fortune 500 companies such as Wells Fargo expanding in current times and going for fresh recruitment is a very positive sign for Hyderabad. There is a lot of confidence in the Telangana government and its proactive policies. The city is seeing both new companies foraying into Hyderabad and existing companies expanding their base,” a source said.
Founded in 1852 and headquartered in San Francisco, Wells Fargo has offices in 31 countries and territories to support customers who conduct business in the global economy.
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