by THO
Hyderabad’s real estate sector, especially in peripheral locations, is expected to see property prices increase by 10-20% over the next 3-5 years, driven by key infrastructure projects, including the Metro Phase 2 extension, a report by Colliers India has said.
In addition to the residential market, the peripheral areas are poised to play a crucial role in Hyderabad’s commercial real estate landscape. The report states that peripheral locations will contribute 12-15% of the city’s Grade A office stock and 5-10% of the annual office space demand in the coming years, signalling a shift in the commercial real estate dynamics.
Hyderabad Metro Phase II is set to boost real estate growth in the city’s west, south, and east peripheries. The expansion will connect key areas, including Nagole to Rajiv Gandhi International Airport, LB Nagar to Hayath Nagar, and Raidurg to Kokapet.
The growth of peripheral areas is further fueled by the development of industrial corridors, the proposed Regional Ring Road (RRR), and government policies such as ICT 2.0, MSME, and Data Center policies, the report said.
“Hyderabad’s office market continues to mature, driving one-fifth of the demand and over one-fourth of the new supply across the top 6 cities in India during 2024. The city’s peripheral areas are set to enter a transformative growth phase, fueled by upcoming infrastructure projects and supportive government policies,” Arpit Mehrotra, Managing Director, Office Services, Colliers India said.
Housing prices in the city’s western corridor expected to surge
The report noted that housing prices in Hyderabad’s Western Periphery, including Kokapet, Neopolis, and Narsingi, have risen by over 50% in the past five years, with an additional 10-15% increase expected. While these areas will remain a hub for upscale residential developments, affordable and mid-segment housing is expected to expand in Tellapur, Lingampally, Bandlaguda, and Miyapur.
Malhotra added that the West Periphery micro-market is likely to witness heightened commercial activity, driven by price arbitrage compared to established IT hubs of Gachibowli & HITEC City and enhancements in metro connectivity.
“Both Grade A office space demand and supply in West Periphery is projected to grow multifold times. Consequently, we can anticipate Grade A office stock in the micro market to double up and reach close to 22 million sq ft in the next 3-5 years,” the report added.
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Hyderabad to see 20-25% new office supply in peripheral markets
The report highlighted that while established hubs like HITEC City, Raidurg, Kondapur, Gachibowli, and Nanakramguda will continue to dominate Hyderabad’s office market, peripheral areas are set to play a growing role in the coming years.
The share of Grade A office supply in these emerging locations is projected to rise to 20-25%, a significant increase from the current less than 5%.
Key areas such as Kokapet, Shamshabad, Uppal, and Pocharam are expected to see notable growth in demand for premium office spaces.
“Peripheral markets could contribute up to 10% of Hyderabad’s annual leasing activity over the next 3-5 years. Additionally, the total Grade A office stock in these regions is anticipated to grow from 13 million sq ft to 20-25 million sq ft. With increasing demand, rental rates in these peripheral micro-markets could see a further rise of 5-15% in the near to mid-term,” the report said.
