Driving Forces of Hyderabad – Jobs, Infrastructure, Optimism, NRIs, Govt Initiatives
Hyderabad, the second largest urban agglomeration in the country, which had been rated best in terms of ‘Quality of Living’ by Mercer this year, is emerging as a prime hub for real estate attracting investors into all the asset classes- office, residential and retail. As India’s major IT/ITeS hub and a prime industrial corridor in the south, the city’s realty sector is growing at a healthy pace, driven by optimism.
Telangana Govt Policies
Hyderabad city is fast emerging as south India’s biggest realty hotspot. Political stability, State government’s proactive policies, growing occupier demand, improved infrastructure, quality educational institutions and the availability of a large talent pool have helped bring back attention to the city’s realty market are the factors behind phenomenal growth of Hyderabad
Telangana Government has initiated several reforms to build capacities in major cities of the State and attract investments into key sectors. This has reflected in the growth of realty sub-segments in the recent years.
Hyderabad Infrastructure Scenario
Hyderabad witnessed significant infrastructure developments including the Hyderabad metro, multi-level flyovers, electronic manufacturing clusters and an integrated pharma city over the past two years. The government policies, reforms and developments are aimed at attracting more investments into the city which augurs well for city’s prospects.
There is an abundant growth opportunity in office space.The global organisations continue to driving office growth. Other sectors such as pharma, financial services, data centres, logistics and manufacturing sectors are also adding up to office demand and are expected to continue for some time.
Rise of Retail Spaces
Apart from a robust commercial and industrial growth, Hyderabad is witnessing growth in retail space, with estimates that the organised retail stock to touch 10 million sq ft by 2019 from 4 million sq ft at present. The segment witnessed merely 11 percent CAGR during 2011-16.
Affordable Living Spaces
Telangana which had been ranked No. 1 in Human Development Index has witnessed its capital recognised as one of the most affordable residential markets for residential buyers especially in the premium/luxury and high end/mid-end segments when compared to Bengaluru and Chennai.
Also, residential prices have not gone up much in Hyderabad and it remains an attractive destination for investors. Low-cost residential apartments are still available, which presents a competitive edge to the city.
It commands lowest rentals across top city markets in the south and witnessing a 108 % year-on-year growth in office demand in 2016 at 6 million sq ft from less than 3 million sq ft in 2015. The city saw 4.5 million sq ft leasing till the third quarter of 2017, which is estimated to touch 7-7.5 million sq ft by the end of this month.
Favourite of NRIs
Experts report that NRIs who were earlier thinking of investing in state of Andhra Pradesh are now showing interests Hyderabad, as a better investment option. There is a surge in demand from them in the last six months and this trend will continue in future also.
Demand for Office Spaces
As per the top real estate consulting agency of India - Colliers International India, the Hyderabad city's office market has witnessed a gross absorption of 3.32 million sq ft (year-to-date September 2017), driven by the expansion of large scale technology companies in the year. It is expected that the city is witnessing the upcoming construction of about 25 million sq ft of office spaces which is likely to increase the total office spaces in the city to about 45% by 2020.
Dynamic Jobs Sector
In spite of concerns of job losses in IT sector, Hyderabad is expected to emerge as a promising city for job seekers over the next six months. A strong presence of IT companies, proactive steps by the government in placing the city as an attractive destination for big companies across sectors and robust infrastructure are leading to new jobs creation.
Jobs in middle level are definitely a challenge. But at entry level and for those who have expertise in at least one skill set, the job market is positive. As the expansion being done by existing companies of the city which proves that new jobs are being created and is expected that placement season will be good in 2018.
Availability of talented people, infrastructure, favourable social and governance factors are making Hyderabad a target destination for most companies. Already internationally reputed companies like Microsoft, Deloitte, Google, Amazon are present in the city and also the scene is buzzing. This ensures that the city will witness 10% - 15% jobs growth in 2018. While there might not be much increase in jobs in IT industry, sectors like e-commerce, logistics, finance, fintech, retail will create new jobs in considerable number.
The real estate sentiment in Hyderabad is optimistic as growth returns across all verticals. With the government taking several reforms and measures to attract investments, improve ease of doing business and power supply, investors are looking at the city, for their foray or expansion.