by THO
Telangana Irrigation and Civil Supplies Minister N Uttam Kumar Reddy has said that Hyderabad is on the verge of becoming a global investment hub largely due to the government’s focus on infrastructure development.
He was speaking as the chief guest at Statecon 2024, organised by the Confederation of Real Estate Developers’ Association of India (CREDAI) at the Hyderabad International Convention Centre (HICC) in Madhapur.
Reddy credited infrastructural development in the state for the feat. He also assured the real estate sector of the government’s attention and support. “Your growth, your business activity, your construction and real estate activity – we are with you,” Reddy said.
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Addressing concerns raised by the industry, Reddy said that issues related to the growth corridor, the removal of the 25% building coverage restrictions in peri-urban zones, farm layouts, and zoning regulations across the state, including GHMC, are justified and will be taken up at the appropriate level.
Rise of the real estate sector in Hyderabad
Hyderabad is fast cementing its status as a global corporate hub, attracting global capability centres (GCCs) from across the world. At approximately 53 million square feet, the city accounted for 21% of the total office leasing by GCCs in India between 2022-H1 2024, according to a CBRE-CREDAI Telangana report.
The joint report titled ‘Telangana Going Global’ was released at CREDAI Telangana Statecon 2024. It credited Telangana’s infrastructure, investor-friendly policies offering streamlined approvals and programs for financial incentives, for the performance.
The increased demand from occupiers has led to a significant rise in new office developments, primarily concentrated in the IT corridor and extended IT corridor micro-markets, the report noted. As per data cited in the study, Hyderabad’s office stock surged to 127 million square feet in the April-June period of 2024. Between January-June 2024, the city’s total office space leasing stood at 4.4 million square feet.
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“The city’s remarkable expansion, with office space more than tripling since the formation of the state, underscores its position as a global business hub,” said Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East and Africa, CBRE.
According to the report, Hyderabad is poised for growth in the commercial real estate sector, with an anticipated addition of approximately 34-37 million square feet of investment-grade business parks over the next three years across its key micro-markets.
The report highlighted that Hyderabad secured $3 billion in foreign direct investment during financial year 2023-24, doubling the previous year’s investment, and has attracted over $40 billion cumulatively across various sectors since 2014.
Technology, research, consulting and analytics firms lead the way
According to the report, Hyderabad accounts for 14% of the nation’s total office stock. The top five developers in the city, with their collective contribution of 39% to the overall office space, are the backbone of this growth, it added.
Incidentally, 27% of Hyderabad’s current office stock was added in the past 10 quarters. This rapid expansion is mirrored in the absorption rate, with 23% of the city’s total office space leased out during the same period, the report noted. Over the past five years, the city’s office stock has witnessed an 1.9 times growth, accelerating to a 3.1 times growth over the last decade.
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According to the report, technology and research, consulting and analytics (RCA) firms are the primary drivers of office space demand in the city. Simultaneously, emerging players such as BFSI, flexible space operators, life sciences companies and engineering and manufacturing (E&M) firms are also increasingly contributing to the city’s office space absorption.
“With a focus on infrastructure development, skill enhancement, and a business-friendly environment, Telangana is well-equipped to sustain its growth trajectory. Hyderabad, along with emerging urban centres, will play a pivotal role in driving the state’s global presence,” said E Premsagar Reddy, president, CREDAI Telangana.
Beyond Hyderabad
Besides Hyderabad, Telangana is experiencing a burgeoning real estate landscape across multiple primary and secondary urban centres, the report noted. It identified Warangal, Nizamabad, Khammam and Karimnagar as primary centres, and named Ramagundam, Mahabubnagar, Mancherial, Nalgonda and Adilabad as secondary urban centres. These regions collectively represent the next phase of real estate development in Telangana, offering promising opportunities for investors and developers, the report said.
