Hyderabad: The real estate sector in Hyderabad is doing well across asset classes, be it office, residential, logistics or land and retail. Of these, office space has been dominant with about 63 million sq.ft of leasable office space in Hyderabad today. This is expected to cross 100 million sq.ft in the next three years.
“Hyderabad is doing extremely well in office absorption, courtesy the real estate cost, a proactive government, better infrastructure compared to other cities, availability of talent pool, low cost of living and the ability of people to speak the national language. The State government has also marketed the sector well. All these positives will go a long way in the city’s realty growth,” CBRE South Asia Head-Hyderabad Operations Gipson Paul told Telangana Today.
Gross office absorption, which was 3.5-4 million sq.ft four to five years back, has touched 9 million sq.ft last year, including ready to occupy and buildings under construction. This year the absorption could be over 9 million sq.ft. Since office absorption is growing, there is going to be a healthy impact on the residential sector as well. Till the first half of 2019, about 6,600 residential units were sold and there are estimates that at least 10,000 units will be needed in the coming six months.
Land prices in the residential space have gone up as there is demand from developers. Companies are looking for joint development because of liquidity crunch. Land prices in the office space which have seen growth slightly higher than the normal would need a correction in the near-term. Stability in land prices could be sought by both occupants and developers.
On the logistics front, there are good signs of growth. The recent announcement of Amazon to take additional land to expand its fulfillment centre in Hyderabad for which it signed an agreement with GMR Hyderabad Airport City is a positive sign. Earlier Medchal was dominating in the logistics space, but now Patancheru and Shamshabad are catching up.
Retail is seeing a moderate growth driven by food and beverage, entertainment and apparel segments. Hyderabad will see two big malls, one promoted by Lulu on Kukatpally-Hitec City Road spread over 1 million sq.ft which will be operational in 24-30 months and the other by L&T Metro spread over 1-1.5 million sq.ft mall near Ikea in the next two years.
Hyderabad attracted multinational brands such as Ikea and Danube in the furniture and home furnishings space. The city will also see more multiplexes, which is making mall development sustainable.