After a long spell of lower growth the real estate market in the city of Hyderabad is on the roll again, this time led by the commercial property space.
The property consultancy firm Knight Frank, which has released its half-yearly report covering residential and commercial space for top seven cities of India, said Hyderabad had recorded the highest ever office space absorption of 3.1 million square feet in the second half of the calendar year 2015.
These are the strongest half yearly office space absorption numbers in Hyderabad history. A spurt in demand for office space is very much evident as the absorption levels in the preceding six month period was just half of what has been recorded in the second half of the year.
"With good infrastructure, talented work force and lower rentals and property prices compared to other cities, Hyderabad has been fast emerging as a second base for many Indian and global players in South India after Bangalore city. The spurt in demand for office space in Hyderabad is also marked by a new trend where builders and the users of office space coming together for a custom made development ," Arpit Mehrotra, director, Occupier Solutions Group of Knight Frank India said on Thursday.
The new completions in commercial space remained lower at 2.4 million square feet during the same period helping the rentals go up a little and this could encourage more investments into the commercial real estate development in the coming days, according to him.
On the other hand, the residential market in Hyderabad remained more or less steady with the volume of sales hovering above 7000 units for the past two years. However, the dip in new launches since the second half of the calendar year 2014, way below the sales volumes, continued in the second half of 2015 as well. This has also contributed to a gradual rise in average property prices, which rose to Rs 3,620 per square feet in the latest 6 month period from Rs 3,390 in the first half of 2014, according to the report.
"While demand holds steady in the housing segment, both supply and unsold inventory stood at their 5 year lows," the report said in respect of the Hyderabad market.