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Hyderabad Office Stock Doubles To 56mn Sq. ft. In The Last Decade: CBRE

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HYDERABAD, February 16, 2018: CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm today announced the findings of its report on ‘The Comeback of Hyderabad–India’s Original IT Hub Rises Again’. As per the report, Hyderabad has reinstated its position as a preferred metropolitan considering the three-pronged market dimensions. The city continues to remain one of the most affordable residential markets for buyers in both premium/luxury segment as well as high-end/mid-end segments; office demandwitnessed102% Y-O-Ygrowth in 2016 and organized retail stock witnessed 11%CAGR growth from 2011-2016.Logisticsand ware housing demand witnessed93% Y-O-Ygrowth in 2016driven bye-commerce, FMCG and pharmaceutical sectors. Hyderabad Metropolitan Region offers the best quality of living among cities in India and is a leader in Human Development Index.

The real estate market outlook for Hyderabad looks positive, backed by a stable political environment, growing occupier demand, improving infrastructure and the availability of a large skill pool. With the advent of technology majors, the city’s commercial office demand is expected to remain strong and will enjoy upward momentum. Residential buyers remain focused on investing in new projects in locations such as Manikonda, Kukatpally, Nanakramguda, and Kondapur. Launches in the premium / luxury segment are limited to Central Hyderabad, with fewer small scale launches expected in the coming years.

Anshuman Magazine, Chairman, India & South East Asia, CBRE said, “Hyderabad’s buoyant economy and resilient growth have propelled the city to become a leading realty hotspot in India. Being the second largest urban agglomeration, Hyderabad large talent pool are driving the city’s robust infrastructure to become the technology hub of our nation. There has been resurgent investment activity attracting funds from both domestic and multinational corporates putting the city well ahead of the curve among metropolitans, strengthening Hyderabad’s realty market.”

Total organised retail space in Hyderabad city stood at 2.9 million sq. ft., the majority of which is concentrated in Western and Central Hyderabad. High streets will continue to see sustained growth in rents due to limited supply, particularly those in popular locations such as Himayat Nagar, Banjara Hills, and Jubilee Hills.

Also, logistics sector will be driven by demand from e-commerce, FMCG, electronics manufacturing, pharmaceuticals andagro-based industries. Industrial warehousing is also expected to witness boost with the Telangana State Industrial Project Approval and Self-Certification System (TS-IPASS) Bill which has provided for speedy processing and clearance of various licenses and certificates through a single-window system.

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HYDERABAD REAL ESTATEOVERVIEW

Office Market

· Hyderabad has been transformed into one of the preferred IT destinations for MNCs and R&D centres.

· The city’s overall commercial stock stood at approximately 56 million sq. ft. as of 2017, which is the least in comparison to the other southern commercial hubs of Bangalore (143 million sq. ft.) and Chennai (63 million sq. ft.), indicating the city’s strong development potential.

· Over 6.8million sq. ft leased in 17; Hyderabad commands the lowest rentals across top markets in South

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Residential Market

· Ample social infrastructure and organised retail has supported Hyderabad’s emergence as an attractive residential destination.

· In addition to the concentration of residential markets in Central Hyderabad, there has been spillover of demand in new locations of East Hyderabad such as LB Nagar, Nacharam and Malakpet. The advent of the IT sector has resulted in the growth of the city towards the Western Hyderabad locations of Madhapur, HITEC City, Kondapur, and Gachibowli

· Industrial activity in North Hyderabad micro markets has also led to residential activity in these locations.

Retail Market

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· Total organised retail space in Hyderabad city stood at 2.9 million sq. ft., the majority of which is concentrated in Western and Central Hyderabad.

· 4% CAGR growth in rental values in organized retail from 2011- H12017

· Hyderabad is expected to see the completion of around 3.7million Sq.ft. of new supply over the next years

Warehousing & Logistics Market

· Total absorption in logistics space stood at 1.23 million sq. ft. in 2017

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· Over the past decade, Hyderabad has emerged as a major hub for the bio-technology and pharmaceutical industries, resulting in increased demand for warehousing space

· The numerous national highways passing through Hyderabad make it a central point for warehousing activity, while Andhra Pradesh’s location is ideally suited for the export and import industry.

Initially called “India’s Silicon Valley” at the cusp the 21st century, the establishment of Hyderabad Information Technology and Engineering Consultancy City (HITEC City) in 1998 in the western part of the city had led to its IT boom. Despite a brief period of political instability, Hyderabad’s real estate sector has grown in the past two years coupled with the inherent strengths of the city—including its status as a prominent IT hub, strong institutional base, supportive government policies, large scale infrastructure initiatives and significant demographic dividend.

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