Hyderabad's commercial office space market has shown a demand led growth last year despite the political turbulence with as much as 5.3 Million Square Feet (MSF) getting absorbed. About 1.5 MSF was occupied in the last quarter itself with existing IT/ITES firms driving the growth.

Vacancy Rate

Overall vacancy rate has dropped to almost 13 per cent compared to 21 per cent in the previous quarter of 2009 and 29 per cent in the last quarter of the same period. A Cushman & Wakefield research publication released at the Advantage AP – Annual IT Summit by its Executive Director Arvind Nandan showed that Madhapur and Gachibowli regions accounted for 93 per cent of absorption or 1.4 MSF, mostly in the Special Economic Zones.

Fresh Commitments

Fresh commitments are to an extent of 5.28 lakh SF mostly in Madhapur SEZ. The number of lease transactions reported in the last quarter are said to be the highest in the SEZs to benefit from tax exemptions even after the current Software Technology Park of India (STPI)/ sunset clause expires on March 2011.

Increased Interest

The study claims that the demand is also an indication of the increased interest among the occupiers.

However, fresh supply was just two lakh square feet at a standalone commercial development in Raidurg.

Delay

It is attributed to developers delaying construction schedules due to a sluggish recovery in the leasing market.

This year for the first quarter, the global real estate research agency estimates two million square feet to be infused with supply concentration in suburban and peripheral regions of Uppal. Suburban regions of Madhapur, Gachibowli, Nanakramguda, Manikonda and Raidurg may show rental appreciation of three to five per cent.

Stable

Rentals are more likely to remain stable in the regions of Banjara Hills Road nos. 1, 3, 10 & 12; Somajiguda, Raj Bhavan road and S.P. Road.

Source: 12th March 2011, The Hindu

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