Hyderabad: Hyderabad continues to attract investments across real estate asset classes. While office space has seen robust growth, segments such as residential and warehousing are also showing signs of growth. Overall real estate growth in the city during the first half of 2021 has been well above the national average considering all asset classes, with reported large deals alone worth about Rs 3,500 crore-4,000 crore.
The city led institutional investments during Q1 2021 (January-March) pan-India accounting for 42 per cent of total investments, demonstrating the highest capital flows of $384 million (about Rs 2,860 crore), driven by the launch of new developments by Phoenix Group.
In Q2 2021, real estate firm RMZ Corp (in April) tied up with Canada Pension Plan Investment Board to develop two office complexes in Hyderabad- RMZ Nexity and RMZ Spire. This deal also includes an office complex in Chennai-RMZ One Paramount.
Dr Samantak Das, chief economist and head, Research & REIS, India, JLL, told Telangana Today, “This single large deal valued at Rs 1,500 crore ($210 million), accounted for 15 per cent of the real estate investments attracted across India during the second quarter.”
Residential outlook
JLL India closed a deal in April with Hyderabad-based developer IRA Realty Tech for a 53 acres land parcel at Shamshabad, to be used for residential projects. IRA expects to create valuations to the tune of Rs 1,000 crore.
Hyderabad witnessed a sale of 6,866 residential units in the first half of 2021 (January-June) compared to 4,234 units in the first half of 2020, up 62 per cent, making it the city with highest growth among the top seven cities in India. The offtake of residential units in H1 2021 was driven by western suburbs with a contribution of over 67 per cent.
The city continued to dominate new residential launches and accounted for almost a third of the overall launches during H1 2021, with 19,571 units out of 61,010 units, shows JLL research.
Investor strategy
On the prevailing investor sentiment, Radha Dhir, CEO and country head, India, JLL, said, “Investors are showing resilience and are adapting to the uncertain environment. Relaxing lockdowns during the first three months of 2021 also gave investors a first-hand experience of the post-pandemic world. This led to risk re-rating, and asset allocations witnessed a subsequent change in Q2 2021.”
Mani Rangarajan, Group COO, PropTiger.com, said, “Hyderabad is one of the best commercial markets in the country. Due to Hyderabad’s quality of living, the city is emerging as a top residential market and demand is set to grow consistently. It will remain a preferred market for investors.”
Hyderabad recorded warehousing transactions of 2.4 million sq ft in FY 2021, with 54 per cent of investments driven by the e-commerce sector.
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