Hyderabad Real Estate Market Sees 172% Growth In 5 Years
Hyderabad’s commercial real estate market has seen a record growth of 172 per cent in its transaction volumes between 2014 to 2019, says a report by Knight Frank India.
According to the research report titled ‘WFH, #WorkfromHyderabad’, in terms of commercial market, Hyderabad is one of the few cities that recorded positive rental growth of 2 per cent year-on-year (YoY) in Q3 2020. Residential prices have grown by a significant 5.3 per cent Compounded Annual Growth Rate (CAGR) in 10 years, and even during the present Covid challenge, rents continue to remain steady.
Hyderabad is among the only two metro cities (another being Bengaluru) that have not seen a fall in residential prices despite the ensuing market uncertainties and low sales. The city witnessed a remarkable growth in corporate activity over the last five years and jumped from a rank of sixth in 2014 to second in 2019 in terms of annual office space demand across the key cities in the country.
The driver of the state’s economic growth has been the tertiary sector (services sector) dominated by the Information Technology (IT) services. Telangana IT/ITeS exports contributed revenue of Rs 1.25 trillion in the year 2019-2020, with 18 per cent annual growth against Rs 1.9 trillion in 2018-19. The city is the second-largest contributor to the revenues from IT exports in the country and is home to global bigwigs like Google, Amazon, Microsoft, and Facebook.
The report also highlighted that, as the conventional real estate asset classes struggle to get back on their feet on account of the ongoing pandemic, two new asset classes are seeing a sudden spurt in demand – data centres and warehouses. The forced shift to e-commerce to enable contactless business and to fulfil social distancing norms has created a need for more warehouses and logistic centres across the country.
Hyderabad, being the distribution hub in Telangana, is also seeing increased traction in the warehousing segment. Telangana is among the very few states in India to have an independent data centres policy, as early as 2016. The state has already garnered an investment of Rs 25,000 crore for data centre mega projects. Recently, Flipkart opened its data centre in Hyderabad, second after Chennai, to support its core operations.
Telangana Industry and Information Technology Minister K.T. Rama Rao inaugurated the new office in Dallas Centre, Knowledge City, located in the premier IT-Hub. In the last four years, Telangana attracted investments of over Rs 10,000 crore in the life sciences industry. To give a further boost to this industry, the state government has released the Life Sciences Policy of Telangana and launched vital projects such as Genome Valley 2.0, Hyderabad Pharma City, and Medical Devices Park in Sultanpur.