Source: Sakshi Business 5.7.16
Hyderabad: At a time when metropolitan cities are suffering from either modest or decline in demand for office space, Hyderabad is leading the country as commercial space requirement is rising significantly.
During the first half (H1) of 2016, Hyderabad recorded a whopping growth of 55 percent during the first half thanks to the efforts of Telangana government for creating infrastructure and framing an industry-friendly TSiPASS. During the period, the net demand for office space across eight cities fell 18 percent.
According to a latest report by real estate consultancy firm Cushman & Wakefield, the Telangana government's efforts to create more visibility for 'Brand Hyderabad' in fact generated more demand for office space in H1 2016. During the past two years, Telangana government has succeeded in improving the business climate in the State and more particularly Hyderabad.
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As a result, Hyderabad witnessed more demand for office space to the tune of 2.9 msf (million square feet), a 55 percent increase when compared with the corresponding period in 2015.
The report observed that competitive rentals in the city, quality infrastructure and a proactive government are major attractions for global companies for setting up offices in the city.
Cushman & Wakefield in its reports further forecasts that Hyderabad continues to witness a strong demand for office space from the IT-ITeS sector. Three global majors accounted for office space of 7.89msft during the first half. The top three transactions during the first half of 2016 came from Amazon with 3.5 lakh sft in Madhapur, Value Labs with 2.25 lakh sft in Gachibowli and JP Morgan with 2.14 lakh sft in Madhapur.
During the first half of 2016, Chennai suffered a steepest fall of 51 percent in net absorption to 0.6 msf, while Bengaluru's net absorption fell by 34 percent to 4.5 msf. Overall, the net absorption of office space declined by 18 percent year-on-year (y-o-y) at 14.5 msf across the top eight cities.
The first half of the year was marked by unavailability of quality Grade A space in many cities. Other cities recorded small-sized deals during the first half. This caused a steep fall in the overall net absorption. Delhi - NCR recorded a growth of 39 percent, Ahmedabad witnessed a rise of 27 percent and Kolkata grew 10 percent in net absorption of office space in the first half of the year.
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