Hyderabad is the economic powerhouse of Telangana and in recent years it has emerged as the most preferred IT-ITeS destination of the country. With the bullish stance of IT players, the state has crossed USD 15 bn IT exports during 2018-19, registering a growth of 17% over the previous year.
Hyderabad accounted for close to 18% of the pan India leasing activity accounting for 9.5 million sq. ft. in 2019, furthermore, it is expected to continue the same leasing momentum in 2020.
The city’s office market demand is expected to sustain during the year 2020 given the increased quantum of ongoing RFP’s (request for proposal) and strong enquiries from sectors such as IT-ITeS, Consulting and Flexible workspace occupiers. Moreover, it is expected to see a robust average demand of close to 10.5 mn sq.ft for the period 2020-2024, driven by the availability of high quality grade-A supply, competitive rentals as compared to Bengaluru and abundant availability of talent pool.
Hyderabad has witnessed a supply influx of 11.8 mn sq.ft for the year 2019 and it is expected to see close to 19.5 mn sq.ft of supply for the year 2020. Almost 90% of the fresh supply is concentrated in the key micro markets of western Hyderabad such as Hitec City, Raidurg, Gachibowli and Kokapet. With the huge upcoming supply, vacancy levels in grade ‘A’ facilities are expected to rise and thereby keeping the rental growth at a moderate pace. Factors such as improved infrastructure, availability of talent and 40.0% lower rents compared to Bengaluru are driving occupier demand in Hyderabad.
- By Kishore V, Senior Associate Director, Office Services,Colliers International