Hyderabad realty recovering faster
Housing sales improve sequentially to 1,609 units in the third quarter from 974 units in the second quarter, while office and retail segments see momentum
Hyderabad: Hyderabad’s real estate is recovering faster with the city’s residential market witnessing the highest price increment of 4 per cent in the third quarter of 2020 followed by Bengaluru with 3 per cent year-on-year (YoY), across the country. Developers in these predominantly end-user markets sustained pricing power in a favourable demand-supply scenario. On the other hand, weighted average prices during the third quarter of 2020 (July-September) registered a Y-o-Y decline in the range of 3-7 per cent in six of the top eight markets in the country, making them completely a buyer’s market with discount offers and payment flexibility, according to Knight Frank.
Hyderabad witnessed housing launches in the third quarter across the city with several projects launched in areas such as Manikonda, Miyapur, Kompally, Malkajgiri, Shamirpet, Serilingampally, Narsingi, Bandlaguda and Quthbullapur. The city witnessed the launch of 1,234 housing units during the third quarter. Housing sales improved sequentially to 1,609 units in the third quarter from 974 units in the second quarter.
Anuj Puri, chairman, Anarock Property Consultants says, predominantly driven by end-users from the IT/ITeS sector, the housing markets of the southern cities benefit from the proactive project completion focus of developers. Hyderabad saw a new residential supply of over 1.16 lakh units between 2013 and Q3 2020, of which 44 per cent (approximately 51,710 units) is completed. Average completion time is 4.2 years for small projects (100-500 units) and 5.9 years for large ones (above 500 units).
Office space
In terms of the office segment performance, Knight Frank says the recovery in office transactions and new completions helped rental values in Hyderabad increase by 2 per cent YoY in Q3 2020. The city saw office transactions at 0.5 million sq ft during the third quarter. Industry sources say both office and residential segments are showing signs of recovery in the city, which will be reflected in the coming quarters as well. There is also momentum in the managed workspaces/co-working spaces as working near home is fast catching up. Growth in the IT industry in Hyderabad is also driving office space growth.
Samson Arthur, Branch Director-Hyderabad, Knight Frank India, said, “Progressive companies are planning their workspaces 3-5 years ahead of time and they understand that Hyderabad is soft on the rentals. Willingness of developers and co-working operators is enabling them to transact. Tenants are willing to make a commitment now and occupy the space at a later date.”
Retail sector
Deals are getting re-negotiated in the retail segment as tenants are seeking relief from the owners. They are restructuring the contracts where revenue-sharing models can set in. If landlords agree to this format going forward as well, there can be a retail boom bringing top-class brands from across the world. In Covid times, retailers need impetus from mall developers and retail space owners to reach normalcy, and things are moving in that direction already, experts point out.
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