Telangana’s GRID Policy to drive growth for office markets
Hyderabad: Hyderabad IT sector that was earlier confined to just the Western corridor is expanding to other areas. From a dedicated IT Tower at Kompally to Genpact and Ramky Estates announcing development of 14 acres of land in Uppal, the northern and eastern corridors are seeing the much-needed growth in Hyderabad. All of this is […]
Hyderabad: Hyderabad IT sector that was earlier confined to just the Western corridor is expanding to other areas. From a dedicated IT Tower at Kompally to Genpact and Ramky Estates announcing development of 14 acres of land in Uppal, the northern and eastern corridors are seeing the much-needed growth in Hyderabad.
All of this is possible due to the State government’s Growth in Dispersion (GRID) Policy and according to the real estate services company JLL this policy is likely to create 35 to 40 million square feet of IT supply in the non-western corridors of Hyderabad.
In a report released on Tuesday, JLL informed that Hyderabad is the second biggest market in terms of net absorption and leads in the Grade-A office space growth and the Western corridor – Hitec City and Gachibowli area together make 96 per cent of the city’s Grade A stock. Western suburbs also account for over two-thirds of all new apartment launches and 73 per cent of all sales in the past three years.
However, under the GRID Policy defines a limit of 200 acres of land for conversion and outlines the policy norms that at least 50 per cent may be utilised for IT/ITeS purposes. The report mentioned that as Telangana has unlimited FAR (Floor Area Ratio), wherein developers can construct any number of units vertically, and assuming an average of 6-7 FAR which is currently the prevailing market practice in Hyderabad, an additional 35-40 million sq. ft of Grade A IT supply can potentially be added by developers in the non-Western parts of the city within the next five years.
“This dispersion across the non-western corridors will allow Hyderabad to retain its cost-competitiveness among the top office markets in India. This number can also go up further given that developers may use more than 50 per cent of the land for IT/ITeS purposes if the incentives and office supply trigger a sustained demand momentum in these non-western corridors,” says Dr Samantak Das, chief economist, and head research and REIS, India, JLL.
The northern and eastern corridors are already emerging as the next hotbeds for the residential market with capital values in both at least 25-30 per cent lower than the Western corridor. They are expected to see combined new launches of anywhere between 10,000-13,000 residential units over the next four to six quarters, with the northern corridor being more dominant, the report mentioned.
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