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Hyderabad witnessed one of the best years in terms of commercial real estate construction and leasing in 2018. The rental transaction crossed 7 million square feet mark for the first time ever last year, according to a research report prepared by real estate consultancy Knight Frank.
You are reading: Hyderabad Office Market Update-2018
Some of the factors that constitute to the success of this metropolitan in the country is the availability of sufficient infrastructure. While many metros are struggling to keep up with infrastructure development, Hyderabad has a quality infrastructure in place. The livability factor is also high in the city, attracting large sets of population with requisite talent from across the country.
The IT and ITeS sectors dominated the office leasing office in 2018 also, followed by BFSI (Banking, Financial Services and Insurance) and manufacturing sectors. Although office buildings with large floor plates were relatively in short supply in 2018, something that IT and ITeS companies prefer.
Leasing Volumes
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The year 2018 saw total leasing volume of around 7.03 million square feet, up from about 5.67 million square feet in 2017, registering an increase of 24 percent.
A new trend of companies, especially in the IT and ITes sectors, setting up their own campuses is seen in the city.
Rentals
The average rent in the city has also shown an increasing trend in recent years. The average rentals in the city stood at Rs 58 per square feet per month in 2018, up from Rs 51 per square feet per month in 2017. This translates into a jump of 14 percent in 2018 over the previous year, according to the report. Although the rents have been going up in the city in the recent years, they are still competitive as compared to other metros and hence companies are keen to expand in Hyderabad.
There was a healthy six percent addition to the stock of commercial real estate in the city in 2018. The stock stood at 64.4 million square feet in 2018, up from 60.53 million square feet in 2017.
| 2018 | 2017 | Change Year-On-Year | |
| Average Rent (Rs/sq ft/month) | 58 | 51 | 14% |
| Transactions (In million sq ft) | 7.03 | 5.67 | 24% |
| Stock (In million sq ft) | 64.4 | 60.53 | 6% |
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The vacancy level for commercial real estate market remained low at just 7.38 percent in 2018, that too because of few micro markets.
Hot Micro Markets
The secondary business district comprising of Madhapur, Manikonda, Kukatpally, Raidurg and Kothaguda accounted for the lions share in the office leasing transactions. This place now enjoys very good connectivity and has lot of Grade A properties. The IT and ITeS companies have bene most active in this area in 2018 for office leasing purpose.
The next preferred micro market in Hyderabad was that of peripheral business district west comprising of Gachibowli, Kokapet, Nanakramguda, Serilingampally. This micro market saw completion of some large commercial buildings in 2018.
Corporates like Qualcomm, Google, Service Now, Micron, S&P Global and Amazon were the largest occupiers of commercial realty in 2018 in the city.
Source: https://ecis2016.org/.
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Source: https://ecis2016.org
Category: Lifestyle
