House prices have grown by as much as 5.3 percent compound annual growth rate (CAGR) in ten years, and even during the present time Covid challenge, rents remain steady.
Hyderabad’s commercial real estate market had a record growth of 172 percent in its transaction volumes between 2014 and 2019, according to a report by Knight Frank India.
According to the research report titled ‘WFH, #WorkfromHyderabad’, as far as the commercial market is concerned, Hyderabad is one of the few cities that recorded a positive rental growth of 2 percent on an annual basis (YoY) in Q3 2020.
House prices have grown by as much as 5.3 percent compound annual growth rate (CAGR) in ten years, and even during the present time Covid challenge, rents remain steady.
According to the report, Hyderabad has seen a remarkable growth in corporate operations over the past five years and jumped from sixth place in 2014 to second in 2019 in terms of the annual demand for office space in the major cities in the country.
Hyderabad Airport’s share of passenger traffic handled in the country increased from 5.5 percent in 2014-15 to 6.4 percent in 2019-20.
According to the report, Telangana’s real gross domestic product (GDP) has grown significantly since the formation of the state to Rs 6.63 trillion in 2019-2020 from Rs 4.16 trillion in 2014 with a CAGR of 8.08 per cent, which is significantly higher as the national real GDP CAGR of 5.7 percent for the same period.
The driver of the state’s economic growth was the tertiary sector (services sector) which is dominated by the information technology services (IT). Telangana IT / ITeS exports contributed revenue of 1.25 trillion Rs in the year 2019-2020, with an annual growth of 18 percent compared to 1.9 trillion Rs in 2018-’19. The city is the second largest contributor to revenue from IT exports in the country and is home to global bigwigs such as Google, Amazon, Microsoft and Facebook.
The report also highlights that, as conventional real estate classes are struggling to get back on track due to the ongoing pandemic, two new asset classes are experiencing a sudden increase in demand – data centers and warehouses. The forced shift to e-commerce to enable contactless business and to meet social distancing norms has created the need for more warehouses and logistics centers across the country.
Hyderabad, which is the distribution center in Telangana, also sees greater traction in the warehouse segment. Telangana is already one of the few states in India that already has an independent data center policy in 2016. The state has already earned investment of 25 000 million for mega projects for data centers. Recently, Flipkart opened its data center in Hyderabad, second to Chennai, to support its core operations.
Telangana, Minister of Industry and Information Technology, KT Rama Rao, inaugurated the new office in Dallas Center, Knowledge City, in the leading IT hub.
Rama Rao noted that Hyderabad has changed into the new technological center of India over the past six years. The presence of the IT sector in the city has also shifted from mere operational activities to primary production and product development services.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said that the government of Telangana, in addition to IT / ITeS, has increased the impetus of industries like pharmaceutical and life sciences, food processing, electronics and textiles to diversify its economic interests.
Over the past four years, Telangana has attracted investments of more than 10,000 million in the life sciences industry. To give this industry a further boost, the state government has released the Life Sciences policy of Telangana and launched important projects like Genome Valley 2.0, Hyderabad Pharma City and Medical Devices Park in Sultanpur.
Samson Arthur, branch director – Hyderabad, Knight Frank India, said that Hyderabad is highly ranked in different categories of living and business. It is now emerging with modern business clusters and holds promise for new industrial ecosystems in the line of the successful IT sector.
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