Your Weekly Dose of News from the Commercial Real Estate Industry
Hyderabad's Office Market Experiences Significant Growth and Demand
Hyderabad, a city steeped in cultural heritage and renowned for its tech industry, is witnessing a remarkable surge in office space leasing. The city's stable infrastructure, talented workforce, and favourable business environment have attracted numerous corporations. This influx has significantly boosted office space demand, driving leasing volumes and contributing to economic growth and infrastructure development, a testament to the city's rich history and promising future.
A notable trend in Hyderabad's office leasing market is the rising popularity of flexible and managed office spaces. Post-pandemic, businesses are increasingly valuing agility and scalability, and these flexible workspaces are meeting those needs. They offer dynamic, plug-and-play environments equipped with state-of-the-art amenities, appealing to various industries, from startups to large enterprises, and paving the way for a more adaptable and resilient future of office leasing.
Key factors driving this boom include Hyderabad's robust IT/ITeS sector, favourable business policies, a rich talent pool, excellent connectivity, and cost advantages compared to other major Indian cities. High-profile leasing transactions by tech giants, e-commerce leaders, and pharmaceutical companies highlight Hyderabad's growing appeal as a prime office destination.
As Hyderabad continues to attract diverse industries, it stands out as a top choice for businesses seeking fully equipped office spaces.
India's Office Leasing Demand to Soar Past 70 Million Sq Ft in 2024
India's demand for Grade A office space is set to surpass 70 million square feet in 2024, driven by significant growth in key cities like Bengaluru, MMR, and Delhi-NCR. A recent CREDAI and CRE Matrix report highlighted a solid first quarter with 16.7 MSF leased, marking a 12% QoQ and a 14% YoY increase.
Market rentals for Grade A spaces neared Rs 100 per square foot, with an 8.7% QoQ rise, indicating a robust landlord-centric market. More significant deals (>1 lakh sq ft) fueled 56% of Q1 2024 demand, up from 36% in the previous quarter. The IT/ITeS sector led with 28% of the demand, followed by the BFSI sector at 20%.
Bengaluru, Hyderabad, and Noida were major contributors to the leasing boom, with co-working spaces emerging as a significant asset class, comprising 10% of the demand. This is an important trend, reflecting the changing dynamics in the Indian office leasing market. The report suggests continued growth in office supply and leasing volume, supported by strong economic fundamentals and infrastructure investments.
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South Indian Cities Drives Significant Office Market Recovery
Southern India is spearheading a significant revival in the commercial real estate sector. A JLL report highlights Bengaluru, Hyderabad, and Chennai as critical players, driven by a thriving tech industry and robust business ecosystem.
Bengaluru, dubbed the "Silicon Valley of India," leads the charge with a strong demand for office space fueled by tech giants and startups. Hyderabad and Chennai also contribute significantly, attracting IT and BPO companies. The region's well-developed infrastructure and focus on sustainability further enhance its appeal.
Bengaluru accounted for 44% of new office space demand in the first quarter of 2024, with the three cities representing over two-thirds of active RFPs. The trend towards large space leases is evident, marking a shift from pandemic-era space-saving measures.
As businesses return to the office, Southern India is well-positioned to capitalise on this resurgence and maintain its leadership in India's office market recovery.
Most In-Demand Locations This Week-
Metro City : Delhi
Micro-market : Connaught Place
Non-Metro City : Jaipur
Micro-market : Vaishali Nagar