Hyderabad is likely to beat Bengaluru, in terms of office market absorption, with over 11-12 million square feet (sq ft) during 2019, according to real estate consultancy firm JLL.
A few years ago, the Hyderabad office market was at a low of about 2 million sq ft.
Ramesh Nair, CEO and Country Head, JLL India, said, “Investments in Hyderabad surged more than five times to approximately Rs 10,000 crore since the beginning of 2015 till the first half of 2019. The office space attracted about 70 per cent of the investment. The beginning also marked the emergence of the new State as the potential investment destination among investors and occupiers. As against this, the city received Rs 1800 crore during 2008-2014.”
A JLL study showed that the focus on infrastructure, strong economic growth, development of office as well as residential assets and State reforms have had a positive impact on the investors’ and occupiers’ preference for the city.
“This growth momentum is significant as, compared to this, the net absorption in other cities remained relatively slower as the markets continued to witness consolidation, primarily in IT/ITES domain players and relocation of corporates in a bid to lower costs and enhance efficiencies,” Nair said.
He said going ahead, Hyderabad is likely to be front runner in office segment with 13.2 million sq ft constituting 28 per cent of the overall new completions in India in 2019. Almost 50-60 per cent of this space is already pre-committed.
“In the last few years, global technology giants and companies have entered Hyderabad market resulting in its tremendous economic development. The city’s urban infrastructure is one of the key contributors to its impressive growth. Newly developed infrastructure has improved connectivity to accommodate the growing population and improved living standards. All these developments added to the real estate sector’s growth in the city,” Sandip Patnaik, MD, Hyderabad, JLL India, said.
Although there has been a decline in new launches, sales in the residential sector have seen a continuous rise since the second half of 2017. The city has been doing well with more than 40 per cent launches in mid-market segment. It has seen a hike of 6 per cent year-on-year (YoY).