Telangana realty on strong growth trajectory: CBRE

Hyderabad as a city has attracted significant real estate investments in the last 15-18 months, while several cities saw an adverse impact.     

Hyderabad: Despite Covid times, Telangana has been at the forefront in real estate activity, which is tangible through the interest generated by recent Kokapet land auctions. Hyderabad as a city has attracted significant real estate investments in the last 15-18 months, while several cities saw an adverse impact.        

Preetham Mehra, head, Government Practice, CBRE, told Telangana Today, in an exclusive interview, “Telangana has remained an active realty market. Strong political will driven by the State’s Chief Minister and IT Minister, infrastructure focus & development and turning greenfield locations into real estate hotspots have all aided growth. Telangana is on a strong growth trajectory in the coming months.”       

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“In the last 7-8 years, cluster-driven growth has been happening in Hyderabad and top cities of India. Every cluster has been aiming to attract similar industries to bring synergy and develop knowledge quotient. Telangana has seen success in its cluster approach. Technology and manufacturing clusters being developed in the State focusing on multiple industries will aid growth in the coming years,” he noted.

There has been a strong engagement between CBRE and Telangana government. “We are working with the Telangana government to create multimodal logistic hubs to tap the potential in the growing logistics space,” Mehra added. Proposals for industrial corridors and development of a regional ring road are anticipated to improve logistics efficiencies, thus boosting industrial growth in Hyderabad.     

Driven by the surge in quality supply, Hyderabad’s total warehousing stock reached about 21 million sq ft as of H1 2021. Further an additional 5 million sq ft is expected to be added over the next three years. Besides the fillip provided by the infrastructural intervention, the policies introduced by the Government of Telangana including TS-iPASS, have supported the growth of the State’s industrial & warehousing sector.   

National trend

In the commercial space, he said, “Grade-A office supply dipped both in 2020 and 2021, and the industry is in the process of reviewing its office space requirements and relocation plans. The real estate sector is still evaluating the overall impact of work from home on future office space absorption and demand. Large IT majors have started asking their employees to come back to office. Collaborative space demand will emerge in the future. Flexible workspace companies have been fairly active and have provided short-term spaces for corporates in the pandemic times. There is a huge interest in this segment, given the uncertainty.”

There has been a resurgence in residential demand as people have realised that work from home is a reality and there is a need to own a home and to own a larger home in future. This has led to a 75 per cent increase in residential demand in 2021 compared to the previous year. Home loan rates are attractive and the State governments have taken measures to stimulate the demand. Developers have also made their offerings attractive.

People are now looking at suburban and peripheral locations. Integrated residential townships will continue to grow. Residential segment will continue to see strong growth in the coming months. India may expect a revenge shopping trend, which may fuel growth in the retail sector in the coming months, Mehra observed.      

Industrial and logistics sector has benefited in the last 18 months as global industry majors were looking at the ‘China Plus One’ strategy. Production linked incentive scheme had a phenomenal impact on several sectors. Electronics and e-commerce sectors saw significant growth, which again gave a boost to warehousing. “A lot of organised capital has come into the sector and foreign investors remain confident on investing in these sectors,” he added. 

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