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Hyderabad: Office market grows, residential market stable

Hyderabad office market saw a tremendous growth, while residential market was stable, according to a latest report from Knight Frank India.

In its fifth edition of its flagship half yearly report ‘India Real Estate’, the property consultancy provided comprehensive analysis of residential and office markets performance of Hyderabad for the period January – June 2016 (H1 2016).

Some of key points of the report were:

Residential Market:

  • Demand outstrips supply for the second straight year which shows a healthy market scenario.
  • The unsold inventory came down to a five year low, robust sales volume and controlled launches has eased off the unsold inventory pressures.
  • Premium market hit hard by slowdown, will require over 2 years to offload unsold inventory; new launches adding up on the pressure.
  • West Hyderabad remains the one of preferred market with maximum launches and sales.
  • Narsingi and Pupalguda are new preferred micro-markets for new launches in West Hyderabad.
Hyderabad Residential Market Trend
Hyderabad Residential Market Trend

Office Market:

  • Hyderabad office market witnessed 140% growth in supply and 91% in absorption office market as compared to the previous year.
  • Hyderabad reported a transaction of 2.8 million sq ft in the first six months of the year resulting in the great increase.
  • Political stability and newly released Telengana IT policy wooing most of the IT/ITeS companies while the affordable residential market entices the large talent pool.
  • Hyderabad office vacancy stands at 9.5% , prime office markets like Madhapur and Hitec city as low as 3.5-4%.
  • Rental appreciation goes up to 6% due to crunch in supply.
  • IT/ITeS continues to outshine other industries due to price competitiveness as compared to Bengaluru and Pune.
Office New Completions and Absorption
Office New Completions and Absorption

Speaking about the findings, Vasudevan Iyer, Director- Hyderabad, said: “The political stability has indeed brought back resilience to the residential segment in Hyderabad. The growth pattern can be ascertained now as the city has more demand as compared to supply. The overall decrease in unsold inventory shows the healthy state of the residential segment and we expect the trend to continue.

On the other hand, office market exhibited brilliant performance with 2.8 million sq ft absorption which is close to 91% increase as compared to same period last year. While the crunch in supply has brought down the vacancy level, at the same time it has increased the rental values. The overall scenario looks much more positive and we expect more investment in the office space and also hope that the festive season would usher more sales in the residential segment in the second half of the year”.

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