Hyderabad Set For Real Estate Growth In Coming Years
G Srinivas Reddy – VP, Marketing, MyHome Constructions
What has been the impact of Covid on realty trends in both residential & commercial?
In the initial months of Covid19, rather up to August,2020, there was lot of uncertainty in Residential & Commercial Real Estate (CRE) but Residential sales started picking up slowly from September,20 onwards but registered good numbers and reached pre-covid levels by December,20 itself. This has reflected in registrations, bookings with the various developers, growth in housing loan disbursements, reduction in the inventory holdings, encouraging the developers to confidently launch new projects, growth in municipal approvals etc., However, understandably this situation is not all that good for tier 2 and standalone developers as the customers’ trust factor still to be improved in these segments, though the prices sustained at all levels and firmed up. The reasons for the sustenance of price, apart from the general demand, could be for various reasons including higher land prices, increased cost of construction partially owing to demand for the better specifications, additional amenities in the gated communities, labour cost etc., It appears that the growth trend in residential real estate is going to continue for some time now and customers are fine with the current prices and the trend.
With respect to the Commercial Real Estate, we generally look forward for large space occupation by the IT/ITES companies to consider it as doing good. Since these companies are still continuing WFH, we yet to see the overall positive momentum despite traction of good deals in this segment. However, we have to admit that for the time being there is some indecisiveness among these companies but developers are confident that the momentum would look better in the second half of 2021. Discussions with the large employers and employee communities indicate that employees prefer to come back to office. We feel CRE demand catches up as the lookout for larger space per employee, upgrading to the Grade A space, demand for campus kind of IT space etc., are being discussed widely among the circles and Hyderabad is best suited for the same considering the cost, infrastructure, lease rentals, low turnaround time for completion etc.
What are the top 3 changes seen in the customer buying behaviour?
Understandably, the first major change is that Customers are looking forward for the bigger flats located in larger gated communities as the feedback from the larger gated communities in managing the Covid19 situation is extremely good apart from comfortable living atmosphere. Further, the larger gated communities are providing all the facilities with limited movement from the residence and at the same time residents are not feeling that they are house arrested as they are able to use the amenities with children and parents.
Second change observed is that the existing owners, especially in old and stand-alone buildings / apartments, preferring to move to better living places as they are able to fetch good price for their existing flat / house. The existing owners are disposing of their investments in the various types of real estate assets and investing in better communities adding with own / borrowed funds.
Third change observed is that Customers have strongly believed, based on the increased cost of land, cost of construction etc. that the prices are not going to come down and their investment in Real Estate will give better returns than the investments in other financial assets. Further, the availability of housing loans at lowest cost ever is motivating them to take quick decisions.
Covid has accelerated the use of technology in real estate. How will it further influence the realty companies operations going forward?
The use of Technology in real estate is ever changing even before the Covid and probably the penetration of the same has gone to the tier 2 developers / stand-alone buildings to appear it significantly post Covid. Non-availability of the quality labour in certain segments of construction is one of the forces making the developers to invest in technologies apart from the demand. The usage of technology, wherever it is feasible, has become a norm or a new normal. Slowly the construction industry is adopting various systems and procedures like Mfg or other businesses. Safety & wellness has taken front seat in designing aspects either it is in building construction, lift requirement, air-conditioning requirement etc. The usage of Technology in Real Estate would attract young talent to this field like IT Industry which would improve the employment and consequently helps the real estate sales too.
What are My Home growth and expansion strategies in 2021?
My Home strongly believes in the overall sustenance of Real Estate growth in Hyderabad in coming few years backed with overall infrastructure development and change of preferential location to Hyderabad for the large office space occupiers for variety of reasons.
My Home has several residential and commercial projects in development and few other are at drawing board. As of now, My Home is coming with new residential projects in Tellapur and Kollur while coming with Commercial space in Gachibowli and Kokapet. We are also open for development of Residential projects in the CBD area based on the availability of the land and prospects. In terms of numbers we can say that about 12 Mn Sq ft is under constructions and may launch about 10 Mn Sq ft equivalent projects, together in Commercial & Residential in the coming financial year.