The course of the last few years has seen a surge in the real estate market of Hyderabad. Replacing Bengaluru as India’s commercial real estate market in terms of gross office space demand during the third quarter of 2021, Hyderabad is now the second most expensive real estate market, after Mumbai. With the lowest inventory overhang of 25 months and a 222% rise from the previous quarter, it leaves its competitor cities like Mumbai with 58 months, Chennai and Kolkata with 32 months, and Delhi with 62 months far behind.
Now the question arises, what drove Hyderabad to become the best performing market amid the nationwide slowdown?
The proactive state government policies like TS-iPass – which is a self-certification service to establish industries, manufacturing hubs, and services in Telangana – allows a single mechanism for doing business including obtaining required permissions. This creates an ecosystem where corporations can maximize outputs.
The approval of Hyderabad Grid Policy will ensure that all four corners of the city grow into IT hubs and not stay confined to the western parts, like Madhapur, Gachibowli and Kondapur, which has been the case till now. This will help generate employment and advance commercial and residential real estate in these areas, and is also predicted to create one lakh new IT and ITES jobs.
Post Covid-19, the priority is to save money and hence defer the CAPEX and expansions. Coworking firms are seeing a rise in demand as they can provide space at short notice and aid in conserving cash. In 2020, companies had leased 6,000 seats from flex space operators and up till September 2021, they had reached about 7,830 seats. This number is expected to reach 9,500 by the year’s end. There will be a continued demand for flex space going forward as more customised solutions and flexible configurations are available.
Changing the way people travel, The Strategic Road Development Plan, a flagship programme of the state government has initiatives that will boost road infrastructure and decongest the traffic. New infrastructure projects like metro rail, underpasses, and flyovers will help drive the city’s growth by keeping the areas well connected. Spreading offices across cities where talent is available will become easier and will therefore power the real estate.
Hyderabad real estate is turning into a lucrative avenue to invest in for NRIs. This renewed interest is primarily due to increased transparency, great infrastructure, and affordable lifestyle. An increased interest in gated communities with state-of-the-art amenities that account for a secure and social environment has caused a rise in demand. The quality of life and the competitive prices have kept the momentum in pace.
Becoming home to global companies has led to a spike in MNCs setting up their offices in Hyderabad, which now includes Facebook, Amazon, Apple, Microsoft, and Google. This is primarily due to low rental rates, abundant manpower, and business-friendly reforms. With more than 1500 Information Technology enabled companies that employ over 7 lakh people, there is no doubt about why there has been a boom in the real estate sector. The manufacturing of the Covid vaccine has also boosted employment rates and created a demand for real estate from pharmaceutical companies.
Hyderabad continues to reinvent itself and become a fast-growing metropolis. Facilitating this growth by adopting policies like T-PRIDE to encourage SC/ST entrepreneurs and T-IDEA for industrial and entrepreneurship development, the government has come a long way in streamlining the growth of the real estate sector.
The future of real estate in Hyderabad looks promising and profitable as the repo rate is stable and the home loan rates are not likely to increase in the near future.
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