The entry of Goldman Sachs during the COVID period can be said to be a game-changer in the realty sector of Hyderabad. With the presence of Amazon’s Data Centre, there have been inquiries in this segment and there is an increasing likelihood of automotive and electric vehicle segments setting up shop here.
This has directly impacted the office leasing market which resulted in renting out of 0.4 sq million or 3.8 mn sq ft in H2 2020. During the same period, new completions stand at 0.4 million sq mn or 4.9 mn sq ft. But what’s really got the market sit up and look is the fact that office space transaction grew by a whopping 640% in Q4, as compared to Q3 2020.
One of the major reasons behind this is the news of the vaccine coming up. With vaccines being administered slowly and steadily in some countries and India gearing up for a massive vaccine drive, companies large and small have started committing to lease plans. Also, given the increase in business activity, the companies have become more confident in Q4, 2020.
Knight Frank in its latest report shared that the share of Banking, Financial Services and Insurance (BFSI) went up from 4% in H2 2019 to 30% in H2 2020, which meant a significant 248% YoY growth in the sector’s office space absorption in H2, 2020. This was mainly due to two major deals.
Incidentally, Hyderabad’s lease market recorded the second-highest annual supply numbers in 2020. About 8.7 mn sq ft of new office space was available in the market, which is supposedly higher than the decadal average.
Pre-commitments accounted for 21% of the volume.
Suburban Business District (SBD) with Hyderabad Information Technology and Engineering Consultancy (HITEC) and Hyderabad Knowledge City at Raidurg continued to dominate the market with 83% demand share, while the Peripheral Business District (PBD) at Gachibowli accounted for 16% of the pie.
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