Hyderabad accounts for 14 per cent of the country’s aggregate office stock, according to a report titled ‘Telangana Going Global’, prepared jointly by CBRE, India’s leading real estate consulting firm, and CREDAI Telangana. Released by state minister Uttam Kumar Reddy, the report highlights that Telangana’s economic growth is driven by its extensive talent pool, thriving technology sector, and flourishing real estate market.
The city’s office stock has surged to 127 million square feet from April to June this year, cementing the city’s status as a global corporate hub and attracting Global Capability Centres (GCC) from various regions. The increasing occupier demand has led to significant office development, mainly in the IT Corridor and Extended IT Corridor micro-markets.
According to the report, the city’s expansion is robust with 27 per cent of its current office stock added in the past ten quarters. This rapid expansion was also reflected in the absorption rate, with 23 per cent of the city’s total office space leased out during the same period. Over the past five years, the city’s office stock has witnessed an impressive 1.9 times growth, accelerating to a remarkable 3.1 times growth over the last decade.
The report cited technology as well as research, consulting, and analytics (RCA) firms as the primary drivers of office space demand in the city. While these sectors continue to dominate, emerging players include banking, financial services and insurance companies (BFSI), flexible space operators, engineering and manufacturing (E&M) firms and life sciences companies which are also contributing to the city’s office space absorption. “The city is poised for significant growth in the commercial real estate sector with an addition of approximately 34-37 million square feet of investment grade business parks over the next three years across its key micro-markets,” predicted the report.
Assuring investors that the change in government would not slow down Hyderabad and Telangana’s development, state irrigation minister Uttam Kumar Reddy said, “Hyderabad’s growth rate is the same as before, and under our government, it will be even better.” He predicted that Hyderabad would witness another real estate boom while promising to look into issues like lower stamp duty, increased book value of land, and uniform zoning regulation across municipalities.
E Premsagar Reddy, president, CREDAI Telangana, said, “With a focus on infrastructure development, skill enhancement, and a business-friendly environment, Telangana is well-equipped to sustain its growth trajectory. Hyderabad, along with emerging urban centres, will play a pivotal role in driving the state’s global presence.”
“Initially, it was more of a back-office kind of business that was coming Hyderabad’s way, but now a lot of tech companies are coming thanks to all the initiatives of the government. So, the collaboration between the government and the industry is sending out the right messages,” said Gipson Paul, city head of Hyderabad at CBRE. Although the registration of residential flats has gone down in the city recently, indicating a slump, the boom in commercial space is likely to fuel demand for residential spaces, experts opined.