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Hyderabad topples Bengaluru in office space absorption from July-Dec

Hyderabad has surpassed Bengaluru to be the top city in India in terms of half-yearly office space transactions on the back of demand from IT and ITeS companies. If six month period is taken from July to December, the total office space transacted was about 8.9 million sqft (89 lakh sqft), which is more than double compared to the corresponding period the previous year. The supply in the last six months increased over four-fold, said a report released by real estate consultancy Knight Frank.

For the full year 2019, Hyderabad office market has seen about 12.8 million sqft (128 lakh sqft) transacted in 2019. The segment has seen a growth rate of 82 per cent over the previous year. This is an all-time high. In 2019, about 10.9 million sqft (109 lakh sqft) of new supply entered the market, the report said. The addition in supply is conducive to the thriving market activity. As demand continues to grow, about 50 million sqft (500 lakh sqft) quality supply has been proposed and planned for the coming years, the consultancy said. The growth in transaction volumes is attributed to increased activity of IT/ITeS and co-working sectors. IT/ITeS segment accounted for 58 per cent of total space leased out in the last six months. In second half of 2018, this segment took 44 per cent of the total space. The increased presence of IT players here is attributed to the shift of companies towards value-based offerings. Infrastructure constraints and price rise in cities like Bengaluru is also making Hyderabad attractive for companies to expand and to consolidate operations here, it said. Co-working space took about 1.36 million sqft (13.6 lakh sqft) of office space transacted in Hyderabad during July to December. The average rent across Hyderabad is about Rs 61 per sqft, which is a five per cent increase over the previous year. “The demand is expected to remain stable in the near future mainly due to the organic growth of technology and ITeS companies. The city has seen several announcements of new supply which will exceed the total prevailing stock,” said Samson Arthur, branch director- Hyderabad, Knight Frank India. Business-friendly and stable government, ready talent pool, relatively lower cost of living and good infrastructure are factors working in favour of Hyderabad’s property attractiveness.

Residential
Residential project launches in 2019 registered a more than double jump to 13,495 units compared to the previous year. If July-December period is considered, there were 8,065 units were launched and most of them were in the western part of the city (Kukatpally, Madhapur, Kondapur, Gachibowli, Raidurgam and Kokapet). Most of the units were priced between Rs 80 lakh and Rs one crore as the average price was Rs 4,500 per sqft. The sales were up nine per cent in the last six months and 4 per cent during the full year. Unsold inventory was 4,397 units (down by 39 per cent) over the last six months.
Plots
Big brands are now looking to take up plotted developments. They are either purchasing the land or are entering into joint development.
Warehousing
Three segments – Shamshabad- Shadnagar, Kompally-Medchal and Kukatpally are attracting a lot of players to set up their warehouses. The demand is huge mainly due to e-commerce fulfillment centres.


Comments Section

  • - Mazhar Mohammad, Chartviewindia 04/01/2020Reply

    Intraday traders can look to go long if Nifty sustains above the 12,300 level for more than 30 minutes on Friday and look for a target of 12,390. Contrary to this, a strong close below 12,168 level may lead to weakness in Nifty

    • - Gaurav Ratnaparkhi, Sharekhan 04/01/2020Reply

      Nifty is now a stone’s throw away from its all-time high of 12,293. Structurally, it has climbed towards the upper end of the consolidation range i.e. 12,300. Once the 12,300 level taken out, it will march towards 12,350 and subsequently to 12,400, which is near the rising trendline and daily upper Bollinger Band. The 12,220-12,200 zone will act as immediate support

  • - Ashwin Patil, Senior Research Analyst 04/01/2020Reply

    Among two-wheelers, we prefer Hero MotoCorp as it is a proxy to the economy and rural growth, and an expected good Rabi crop output will drive sales in rural India (55% of volumes). We also like Bajaj Auto, which is now finding good traction in exports markets. On the PVs, we still like Maruti as it is a market leader in PV segment and has a wide array of models in all the segments. Its strength in the rural markets is also its positive. We also like M&M, as robust Rabi crop output and increased MSPs will trigger UVs as well as FES growth. Within the CV space we like Ashok Leyland which is away from any global headwinds. Any news on scrappage policy may lead to a sudden spur in CV stocks

    • - Chandan Taparia 04/01/2020Reply

      Nifty has been consolidating between 12,118 and 12,293 levels since last 11 sessions and now a decisive range breakout with followup action can drive the fresh leg of rally. The index has to continue to hold above 12,250 level to witness an up-move towards the 12,350-12,400 zone, while key support has shifted to 12,150 level

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