Hyderabad’s real estate scenario is all set for a makeover from being a back office hub to one known for world class products and services, erstwhile a reserve of cities like Bangalore. As per Jayesh Ranjan, Telangana IT secretary, “The fact that we have three times better infrastructure at one-third the price was always appreciated, but now the extra support via TASK, the arm of the government that promises talent availability for the latest technologies has made a big difference. We already have more than 25 high end colleges being trained in industry requirements; this has made Hyderabad very attractive for high-end technology offices. Then the T-Hub and its ability to bring in the required corporate support, investments, mentoring and technology eco-system has been a tremendous boost to the start-up eco-system.”
Hence both big corporates and start-ups see the city as a great locale. Industry sources affirm the pro-active and continuous support of the state government, ministers and officers is a big reason for the big shift in outlook.
Apple’s proposed off-shore centre, first one in India, will be housed in Tishman Speyer’s Wave Rock facility at Gachibowli. While officials at Tishman Speyer declined to comment, sources in the know confirmed that the California based IT giant’s new office will be spread on 2,50,000 sq ft at Wave Rock facility, and is expected to begin operations by mid of this year. Additionally, Development Bank of Singapore also plans to lease 50,000 sq ft office space in the same facility, say sources.
With the upcoming entry of Apple Inc, the city’s commercial real estate will align in value to the high-end corporate locating here. As per Cushman and Wakefield’s report titled ‘India Office Snapshot 2015′, Hyderabad’s absorption rate increased approximately by 25 percent from 2014. Shortage of supply brought down vacancy levels to approximately 12 percent in this segment of real estate. Availability of quality office spaces at affordable rates, coupled with political stability have worked in Hyderabad’s favour, states the report.
With the addition of every new company or the existing ones expanding operations, the positive spill-over effect on real estate will be sustained. A point in case is IT major Infosys’ announcement made earlier in January this year, regarding the formal inauguration of its new campus in Pocharam. The Indian IT major’s campus is said to have a maximum seating capacity of 25,000 spread on 447 acres. Industry player say that the impact of companies setting up their offices in Pocharam is already being felt in the area’s residential real estate sector. “Rentals in Singapore Township, near Pocharam have already increased and there is no vacancy there,” says Veera Babu of Cushman and Wakefield, Hyderabad.
Currently Hyderabad’s commercial real estate is more affordable compared with the likes of Delhi, Mumbai, Chennai, Bangalore and Pune. As per a media release by JLL India, Hyderabad’s share of PE Funds in the real estate sector during 2015 stood at 3 percent. Out of the total inflows of Rs19,500 crores in 2015, Mumbai and Delhi received the highest share of 34 percent and 29 percent each, followed by Chennai and Bengaluru, bagging 14 percent and 11 percent of the total inflows. Pune too was ahead of Hyderabad by grabbing 5 percent of the overall share. This is likely to change now, and PR majors are on the lookout for interesting deals that would lead to swift growth in the city. But as is commonly known, the grade A commercial real estate in the city is in short supply at present.
Hyderabad is home to Amazon’s fulfilment centre, Infosys campus, Google’s new campus, and Apple Inc. Commenting on the inflow of PE fund in the country’s real estate sector, Shobhit Agarwal, MD, Capital Markets, JLL India says, “Going forward, investors are expected to remain focused on the top seven cities only [which includes Hyderabad]. In the past few months, Chinese and Japanese investors have shown interest in bringing their long-term money into India. Overall, the stage is set for a superlative show this year.”
Dipal Gala, Times Property, The Times of India, Hyderabad