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Hyderabad realty is seeing a rise in leasing activity and rental values during the third quarter of 2019.
In its report titled - “Market View - Q3 2019” - consultancy firm, CBRE South Asia , stated that while leasing activity increased quarterly, the supply addition took place in the extended IT Corridor and a few other locations.
The gap between Bangalore and Hyderabad is anticipated to reduce, as Hyderabad’s growth will be driven by the high supply and demand led by pre-leased completions.
As in the previous year, rental growth is expected to taper in Bengaluru, Chennai and Pune. Bengaluru is likely to witness a marginal rental growth due to sustained absorption in quality developments.
As the much-awaited supply continues to be released in Chennai and Pune, residual spaces along with higher quality of new space is likely to drive rental growth in the short to medium term.
Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia said, “Sustained occupier interest has resulted in developers expected to release investment-grade supply in the coming quarters in Hyderabad. Absorption is likely to be drive by tech corporates and flexible space operators, along with corporates from other sectors.”
Leasing activity rise by over 30 per cent
The leasing activity in the country rose by more than 30 per cent annually, crossing 47 million square feet (sq ft) during the first three quarters of 2019 (YTD).
Bengaluru, followed by Hyderabad, NCR and Mumbai, accounted for about 80 per cent of the leasing during 2019 YTD.
Leasing activity stood at about 15.4 million sq ft during Q3 2019, rising by nearly 23 per cent on an annual basis. It continued to be dominated by primary space occupancy in IT buildings in the IT Corridor II, followed by SEZ developments in the Extended IT Corridor.
The culmination of pre-leases contributed to more than half of the total space take-up. Also, a few pre-leases were signed in prominent under-construction SEZ and IT developments in IT Corridor I and Extended IT Corridor, which are slated for completion in the coming quarters.
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