Hyderabad to witness addition of 40 mn sq ft of Grade A offices by 2025

Real estate momentum: Hyderabad is poised for a significant boost in its office real estate sector. Projections indicate that by 2025, the city will witness the addition of an impressive 40 million sq ft of Grade A office space, according to a report by Property Share. The office real estate sector reflects city-specific dynamics, presenting opportunities and challenges for commercial real estate investors, say experts.

The westward expansion from Jubilee Hills to HITEC City and Gachibowli has turned the city into a tech hub. HITEC City and Gachibowli, the two main micro-markets, are driving the city's real estate growth. HITEC City, near saturation, anticipates a steady supply increase, resulting in moderate rental growth. Gachibowli, an emerging market, foresees significant supply leading to higher vacancy levels and flat rentals. Commercial real estate investors are advised to focus on pre-leased opportunities in HITEC City and exercise caution in Gachibowli.

Bangalore's office boom

Bangalore, known as India's Silicon Valley, has seven micro-markets with ORR (Outer Ring Road) dominating as the largest office market. Despite a 6 per cent vacancy increase in ORR-South, Bangalore remains a prime office destination with a robust ecosystem, talent pool, and quality office stock. Whitefield, the second-largest market, experienced a boost in 2023 with metro connectivity to the CBD. Commercial real estate investors are advised to consider pre-leased opportunities in ORR and Whitefield, steering clear of markets with high vacancy levels.

Pune's power duo

Pune, with its four key micro-markets, stands out with SBD East as the strongest market. Despite increased supply levels, SBD East projects low vacancies and high rental growth. SBD West, an emerging market, benefits from strong physical and social infrastructure. Pune's office market, historically attracting a diverse occupier pool, anticipates substantial supply increases, making it an attractive destination. Commercial real estate investors are advised to focus on SBD East and SBD West markets, leveraging low vacancies and strong demand.

Mumbai's diverse office terrain

Mumbai's office market journey from Nariman Point to BKC and beyond is marked by diverse micro-markets. While Nariman Point/Fort faces limited supply due to land constraints, Lower Parel experienced increased vacancies post-2022. The Western Suburbs, including Andheri, Powai, and Goregaon/Malad, lead in the expected Grade A supply by 2025. Investors should be cautious in markets with elevated vacancy levels, considering opportunities in established areas like BKC with strategic entry points.