‘Most locations abutting ORR have recorded an average of 15%-25% growth in land values’ over the last six months
‘Most locations abutting ORR have recorded an average of 15%-25% growth in land values’
Hyderabad witnessed absorption of around 5.2 million SFT in first half of this year and continues to be one of the front runners in terms of commercial leasing activities in India. Around 9.5 million SFT of ‘Grade A’ office space was added to the city’s commercial market and the activity recorded a 12% growth when compared to last year at the same time outperforming pre-pandemic leasing activity showing clearly recovered market sentiments.
The CIRIL Indian Commercial Real Estate Market Report Jan – June 2022 released few days ago said that the IT-BPM (50%) sector continues to be major demand driver followed by BFSI – banking, financial and insurance, engineering and manufacturing sectors at 20% and 10% shares in overall leasing.
Co-working operators (15%) were biggest contributors to gross leasing volume with Madhapur and Gachibowli submarkets continuing to remain occupiers preferred submarket and accounted for 75% of total leasing activity.
Rentals in most micro markets remained stable even with many occupiers consolidating the space requirements. In medium terms, there is likely to be rental appreciation in Madhapur submarket due to non-availability of Grade A office space and higher premium quoted by developers.
Around 11 million SFT of space is expected to be available in Gachibowli sub-market by end of 2023. IT & ITeS along with coworking space will continue to be demand drivers. The retail market witnessed absorption of nearly 0.6 million SFT of space with fashion and apparel accounted for the highest proportion of leasing 45% followed by lifestyle brands, departmental stores and footwear. Westside, Max and Style Union and Zudios were active space takers.
Total supply of 0.7 million SFT was added in 2021 and approximately 1.0 million SFT of new mall supply was deferred to 2022. Rentals remained stable in most micro-markets but saw appreciation in selected markets such as Madhapur, Kukatpally, Banjara Hills, Kondapur and Himayatnagar due to unavailability of good quality retail space and preference to superior mall space.
Warehousing market witnessed transactions of around 1.5 million SFT mainly driven by consumer durables and manufacturing occupiers in locations such as Patancheru, Edulnagulapally, Gundlapochampally, Medchal and Kallakal witnessing 80% of these tractions.
Shamshabad has also emerged as a preferred e-commerce destination due to proximity to airport. Most locations abutting ORR have recorded an average of 15%-25% growth in land values over the last six months, said the report.