HYDERABAD: While 2016 was a good year for Hyderabad’s commercial leasing sector, with offices furiously picking up a whopping 6 million square feet along the city’s IT belt, this year will be no different, says the latest report published by CIRIL, a country-wide real estate network.
According to the report, Hyderabad stands ahead of cities like Mumbai, which witnessed a total office space absorption of 2.75 million square feet and Kolkata, which saw 1.5 million square feet office space absorption in 2016.
“Hyderabad has witnessed a surge in office space demand and consumption for about a year now. In addition to new companies entering the market, even existing companies and large corporations are seen absorbing large spaces,” said Shailender Singh, managing partner at real estate service provider Goodwill Coordinators.
With most of the absorption concentrated along Gachibowli, Madhapur, Raidurg and Kukatpally, the Cyberabad region has emerged as the most preferred office destination. The reason: solid infrastructure coupled with affordable rate cards. “Solid infrastructure, an easily-accessible talent pool and affordable land parcels are some of the key factors that led to the growth of Hi-Tec City as the favourite destination for offices,” said real estate advisor Sreedhar Reddy.
Not surprising then that the rate of commercial space in Gachibowli, Kukatpally and Madhapur hovers in the Rs 50-55 per sq ft range now.
With vacancy rates in Grade A office spaces ranging between 9-10%, the report predicts a ‘jump in the average rentals due to limited availability of quality office space’, in the next few quarters. Experts are quick to agree. “Hyderabad is facing a deficit in terms of quality office space. There are no major projects being completed until early 2018. The second quarter of 2018 is when the office space crunch will hit the commercial market. Due to this, we might lose out on a few major transactions,” said Singh.
Credits ET Realty