30 Mar Hyderabad Witnessing a Massive Surge in Office Space Deals
The COVID-19 pandemic had slowed down business activity across the country in an unprecedented manner. It impacted the realty sector in Hyderabad too, which had been witnessing a predominantly IT-driven demand for real estate over the last couple of years. Subsequent to the March 2020 lockdown, there was a mass exodus of migrant labour force, resulting in disruption of the construction sector. The news of vaccines has however brought in cheer and spurred resumption of realty transactions in Hyderabad from the fourth quarter of 2020.
According to a report by global real estate consultant, Knight Frank, Hyderabad has been garnering more than its fair share of attention in the realty market and a greater demand for commercial office spaces. From 2.2 million sqft in Q1, there has been a jump in transactions to 3.3 million sqft, showing a 640% leap in lease transactions during Q4 2020. Q2 and Q3 meanwhile showed only nominal transactions. This represents a significant revival in the office market. It should be noted however that the rate of construction turnover was higher in H1 (>3.3) and H2 (>4.6) than that leased out (H1-2.2 and H2 -3.3).
Interestingly, Hyderabads ranking in office space transactions also bounced from sixth place in 2015 to second place in 2019 with a record transaction of 12.8 million sqft. The city also recorded the second highest supply in 2020 with over 8.7 million sqft of new commercial office spaces. Of this value, 9.4% office spaces are still vacant, an increase by 2.4% from H2 in 2019.
While the Hyderabad office market has come down substantially from 112 million sqft in H2 2019 to 39 million sqft in H2 2020 due to the pandemic, there has been a surge in deal sizes by 22% (from 79,865 sqft to 97,554 sqft). Around 45% of transactions in H2 2020 are large transactions of 50,000 sqft and above, indicating a jump in the average deal size and requirements by commercial occupiers.
Commercial space developers are further attracting clients by offering bundled services which also include management and maintenance of these leased office spaces. GAR Laxmi Infobahn has an expansive integrated business park project in Kokapet, Hyderabad. It features 22+ impeccably-designed towers with a potential for expansion/consolidation by existing and new occupiers. As part of Phase 1 development, Laxmi Infobahn offers over 10 million square feet of premium office spaces featuring both SEZ and Non-SEZ options as well as warm shell and fully furnished offices suited to meet any requirement from potential clients.
To foster a wholesome work-life experience, the campus offers world-class amenities such as multi-cuisine food court, day care centre, fitness centre, outdoor sports zone, banking and ATM services, ambulance and medical services, integrated surveillance and security services and a transit hub for interconnectivity. Along with the impressive double height lobby, latest technology is implemented for common area management. Landscaped break-out areas and manicured gardens are among the other amenities provided to encourage employee interactions. All in all, the campus prioritizes the convenience of its employees, making it a truly exciting place to work in!