The city witnessed space take-up in the IT Corridor, driven by the new supply influx and culmination of pre-commitments.

By | Published: 12:02 am 11:51 pm

Hyderabad: Hyderabad led overall office leasing in the country for the first time, in Q1 2019 (January-March), overtaking Bengaluru, Mumbai and the National Capital Region. The city witnessed space take-up in the IT Corridor, driven by the new supply influx and culmination of pre-commitments. The city saw leasing of about 3.5 million sq ft during the quarter, accounting for over 27 per cent of the country’s leasing that took place during the quarter.

In the first quarter of 2019, gross leasing across India touched 12.8 million sq ft, recording a growth of 3 per cent on a quarterly basis. Bengaluru recorded 2.5 million sq ft taking the second place, followed by Mumbai with 2.1 million sq ft and NCR with 1.6 million sq ft.

Romil Dubey, senior director, Advisory & Transaction Services, India, CBRE South Asia, told Telangana Today, “Hyderabad is seeing steady growth in office leasing due to multiple factors that include stable government with proactive policies, infrastructure, availability of skilled talent leading to growth in hiring, constant power supply, availability of land, quality of life and lower cost of living. Although demand for office space is increasing, the real estate prices had been lower compared to other metros. Hyderabad will see active growth for another 5-6 quarters as per current projections.”

Both multinationals and large domestic companies had been dominating the leasing space in Hyderabad. Startups are also slowly picking up. Co-working space is evolving gradually accounting for about 3 per cent of the city’s office leasing, similar to the national trend.

He added, “Hyderabad witnessed increase in rental values across all segments in the IT Corridor owing to increased occupier interest towards recently completed developments. Going forward, we expect Hyderabad, among others, to account for a substantial share of the SEZ pipeline.”

Technology companies continued to lead demand followed by engineering & manufacturing firms. Primary leasing dominated overall demand, mainly constituting of medium-to-large-sized deals in SEZs and IT developments in Raidurg and Kondapur in the IT Corridor. Large-sized deals (more than one lakh sq ft) by American corporates dominated space take-up.

The city witnessed supply addition in the form of one large-sized SEZ and two IT developments in Raidurg and Kondapur, one medium-sized SEZ in Kokapet in extended IT Corridor and one medium-sized SEZ in peripheral business district (PBD).

Dubey says, in the time to come, eastern part of Hyderabad (including Uppal) will also see momentum, driven by metro rail access and Telangana government’s ‘Look East Policy’. However, the western corridor will continue to dominate office leasing. Estimations show that the city will add 30 million sq ft of office space in the next two years.”