Hyderabad: The increasing demand of ‘grade A’ office space has resulted in a steep surge of Rentals across a few commercial pockets such as Gachibowli and Financial district in the first half of 2017.
The demand for offices from the IT and ITeS sectors has been on rising, according to the latest report published by a real estate consultant. Nearly 2.2 million sqft of commercial ‘grade A’ office space was leased in commercial hubs such as Madhapur, Hi-Tec City, Raidurgam, Gachibowli, Kondapur and Financial District in the first half of 2017.
According to a report by TOI, the city witnessed a total supply of close to 2.5 million sqft in the same period, another 3 million sq.ft is expected to be added to this number by end of 2017, according to the half-yearly real estate market report published by CIRIL.
“Hyderabad commercial markets witnessed healthy leasing in the first half of 2017. The vacancy rates across major micro – markets also remain low at 4 – 8 per cent due to the supply crunch and high demand. Hyderabad is expected to remain robust in terms of both demand and supply of commercial real estate space, for 2017,” reads the report.
The Local industry experts predicted that the rentals across the Gachibowli-Financial district and the Hi-Tec City belt will continue to jump, till the last quarter of 2018.
“While there is a high demand for ‘Grade A’ office spaces, due to lack of supply, the rentals in commercial pockets such as the Gachibowli-Financial district market and Hi-Tec City market have now gone up. Rentals now stand at Rs 62 to Rs 65 per sqft as against the 2014-15 rate which stood in the mid 40’s. Going forward, since no new supply is expected before the first quarter of 2019, rentals in these commercial markets will continue to grow until the end of 2018,” explained Sandip Patnaik, managing director (Hyderabad) of global real estate consulting firm Jones Lang LaSalle (JLL).