Hyderabad office rents up by 12 per cent
The Hyderabad office real estate saw a 10-12% appreciation in rents on a quarterly basis on the back of strong absorption coupled with limited space availability in the first quarter (Q1) of 2017, said property consultant CBRE.
A similar trend was witnessed in the extended IT corridor as well, with the non-IT and special economic zone (SEZ) developments recording a rental appreciation of 5-10% quarter on quarter.
According to CBRE, over 1.3 million sft of office space was absorbed during the quarter, led primarily by IT/ITeS occupiers, followed by engineering and manufacturing and pharmaceuticals.
Anshuman Magazine, chairman, India and South East Asia, CBRE said, “The commercial real estate market in India continues to exhibit strong performance. We have begun the year on a strong note, with key markets recording significant office space demand. Despite global uncertainties, the various policy initiatives (RERA, GST, Infrastructure Status for Affordable Housing) coupled with a robust infrastructure development roadmap, is making the country an attractive destination for corporates looking to start up or expand operations in the country. The emergence of smaller cities for corporate expansion is also contributing to the overall growth of the segment.”
The January-March 2017 period was also one of the strongest quarters for the office market observed in recent years across key cities in India, with close to 8 million sft of office space take-up recorded across key cities in the country, registering an increase of 8% over Q1, 2016. Leasing activity was led by small to mid-sized deals (less than 50,000 sft) accounting for almost 90% of all transactions in Q1 2017.
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE South Asia said, “The first quarter of the year has set the tone for the office segment across key cities. We expect commercial activity and occupier demand to remain steady in the coming months. With space constraints in core micro-markets, we are noticing corporates shifting towards peripheral/sub-urban locations which have adequate supply of quality space. While planning their expansion strategies, corporates will continue to keep cost effectiveness, current social and infrastructure development and overall long term benefits of a location in mind before expanding. With the concept of co-working spaces gaining prominence among start-ups and established corporates, we expect new office spaces to embrace this concept in their future designs.”