Hyd: Big ticket deals trigger rush for office space

Hyderabad's realty market for office and commercial space is showing signs of a robust recovery. According to industry estimates, vacancy levels that had touched a high of 8 percent in Hi-Tec City have now reduced to a more realistic 3 percent level, more so over the last three months, while commercial rentals have now increased to a respectable INR45-50 psf level from a low of INR28-30 psf.

Adding further momentum to the commercial market in the city are big ticket deals in the range of 2,00,000 - 3,00,000 sq ft spaces which are now fast becoming the norm than the exception.

According to industry experts, even at its peak (in 2007 - 08), the city's realty market for commercial space seldom crossed this figure, while now its regularly getting multiple requests for large spaces measuring over 1mn sq ft, hinting at a rapid recovery in the months ahead.

On the corporate front, leading companies including Amazon, Flipkart, Deloitte and pharma major Novartis have picked up commercial space in the city over the past year, while a slew of major healthcare institutions had invested in about 5 lakh sq ft of space in and around the upmarket Banjara Hills area in the last three months.

The city's IT sector continues to place its bets on dedicated zones like the Hi-Tec City-Financial District, but developers are optimistic that demand for the Central Business District will pick up in due course.

Experts attribute this sudden reversal of fortune to the increased confidence in the new government at the helm of affairs in the state which has implemented significant measures to improve the city's lagging power and water situation in addition to a strong focus on maintaining the city's law and order.

The impact of these measures is already being felt across the city's realty trade with a slew of big companies like HSBC and Capgemini now said to be on the lookout for suitable office space here, while other firms are said to be working on cancelling deals in other cities to ramp up their presence in Hyderabad.

According to official estimates, the city's IT sector alone has recorded an impressive growth rate of approx 15 per cent since the coming of the TRS government, which the state plans to increase to 20 percent over the next one year period beginning June 2. Such measures are expected to hasten the revival of realty demand in the state and provide a boost for the residential segment which hasn't managed to keep pace with the recent spike in demand for commercial space.