Hyderabad sees 47% rise in new residential units in H1

Hyderabad: The city has seen a 47 per cent rise in the launch of new residential units in the first half (H1) of 2019 at 5,430 units as against 3,706 units in the corresponding period last year, according to the 11th edition of Knight Frank India's flagship half-yearly report - India Real Estate.

The report presents a comprehensive analysis of the residential and office market performance across eight cities for the period January-June 2019.

Both in terms of new office space completions and transactions, H1 2019 has been one of the best periods that the city has ever witnessed with 129 per cent increase in the number of new office space completions to 3.7 lakh sq. m (39.7 lakh sq. ft) from 1.6 lakh sq. m (17.3 lakh sq. ft) in H1 2018, the report said.

The volume of office space transacted in city saw a 43 per cent increase in the first half 2019 to 3.6 lakh sq. m (38.5 lakh sq. ft) from 2.5 lakh sq. m (26.9 lakh sq. ft) in H1 2018, the report said.

Sales peaked in H1 2019 in housing projects that neared completion.

The demand fundamentals in the market continued to be strong which is reflected in a massive 67 per cent decline in unsold inventory, director (Hyderabad branch) of Knight Frank India Samson Arthur said.

From the supply standpoint, while there was a YoY rise in new unit launches, there was a definite deficit, mostly due to backlog of statutory and regulatory clearances, he said.

The Report said, "In H1 2019, vacancy levels stood at 7.13 per cent. Vacancies in micro markets like Madhapur, HI-TECH City, Gachibowli and Nanakramguda area were as low as 2–3 per cent."

The IT/ITeS sector accounted for 41 per cent of the transacted space in the city.

Compared to HI 2018, H1 2019 witnessed rentals move up across micro markets. The upward movement in rentals can be gauged from the fact that rentals in Kothaguda in SBD witnessed transactions at INR 861/sq m/month (INR 80 per sq ft per month).

Rentals in Madhapur, in PBD West, too reached INR 807/sq m/month (INR 75 per sq ft per month). H1 2019 recorded 80 deals, which is lower than the number of deals accounted for in H1 2018.

Even though the number of deals in H1 2019 is lower than in H1 2018, the average deal size has seen a significant rise of 115 per cent. The average deal size in H1 2019 was reported to be 4,468 sq. m (48,097 sq ft).

Madhapur, which had lost it's dominant share to Raidurgam in H2 2018, regained its position as the most preferred business district in H1 2019. It's share in the total transactions, in H1 2019, in SBD, stood at 67 per cent.

Going forward it is expected that office space will further expand in the west, thereby increasing the attractiveness of micro markets such as Kokapet, Narsingi and Puppalguda.

"The office property market of Hyderabad continues to witness an increased surge in interest mainly from the global technology firms making it the city of choice for national as well as regional expansion.

Superior infrastructure, talent availability, business friendly government and an affordable lifestyle makes Hyderabad a favoured location amongst tech giants and the startups.

We continue to see a significant rise in office transactions as well as project completions by developers in this market.

The strong demand trends have led to significant volume of completions now being pre-committed.

The growing office space story of Hyderabad is not a flash in a pan as the rise is consistent over the last 3 years driven by organic IT growth," added Samson.