HYDERABAD: The new year seems to have begun on a high note for Hyderabad’s commercial realty market. According to rough estimates, the city already has transactions of about eight million square feet (mn sft) in its kitty, with more likely to come through 2021.
This, courtesy several e-commerce, insurance and IT biggies deciding to ramp up their existing operations in Hyderabad that saw office space absorptions cross the 10 mn sft mark, before the pandemic struck. Choice of location: the city’s western corridor running through Madhapur, Gachibowli and Kokapet.
“The last year was just a blip in an otherwise solid market with strong fundamentals. With several large deals gradually coming back to the market, further recovery in office leasing is expected over the next 6 to 12 months,” said Veera Babu, managing director of Cushman & Wakefield, Hyderabad. He added: “Nearly seven to eight mn sft space enquiries are currently active in the market and we expect office demand to pivot with long-term positive sentiments. Market conditions will remain balanced with nearly 10 mn sft of new supply and about eight to nine mn sft of new demand.”
Developers too are confident of a steady recovery, despite fears about the work-from-home (WFH) model holding companies back from investing in physical spaces. “While 25% of employees might still WFH, I strongly feel office space requirement will continue to grow. Having the entire staff work remotely is only temporary,” said R Suresh Kumar, senior vice-president (business operations), Prestige Group (Hyderabad). The firm is developing office spaces – in Financial District and Kokapet – measuring 4.1 mn sft collectively.
“With companies remodelling their spaces to incorporate social distancing, there will be a need for larger areas. In the next one and half years, I expect Hyderabad market to touch the 20 mn sft mark,” said Gopikrishna Patibanda, chairman Phoenix Group.