Lockdown blues: Hyderabad office market vacant space touches 12.3% in first half of 2021

Hyderabad office market completions fell substantially from 0.3 mn sq m (3.7 mn sq ft) in the first half of 2020 to 0.07 mn sq m (0.7 mn sq ft), an 80 percent Year over Year(YoY).

By Newsmeter Network  Published on  1 Sep 2021 2:03 PM GMT
Lockdown blues: Hyderabad office market vacant space touches 12.3% in first half of 2021

Hyderabad: Hyderabad office market vacant space have crossed double-digit mark in the first half of 2021.

It has reached 12.3 percent compared to 8.9 percent in the corresponding period of 2020, according to Knight Frank India Real Estate Office Market report.

Hyderabad office market completions fell substantially from 0.3 mn sq m (3.7 mn sq ft) in the first half of 2020 to 0.07 mn sq m (0.7 mn sq ft), an 80 percent Year over Year(YoY). The slow pace of regulatory clearance to ready buildings due to lockdowns was one of the reasons for the slump in the recorded number of supply in the first half of 2021.

New supply continues to be concentrated in the west of Hyderabad i.e. Suburban Business District (SBD) and Peripheral Business District (PBD) West as demand continues to remain strong in HITEC City, Financial District and other western suburbs.

While demand registered growth on the quarterly front, office space absorption came down by 27 percent YoY in the first half of 2021 with a total of 0.1 mn sq m (1.6 mn sq ft) of transacted space recorded during this period. The transaction activity momentum was hindered by a pandemic-induced lull in business activity.

Information Technology (IT) sector continued to be the driver industry with a 48 percent share in the total transactions pie of the first half of 2021. However, in absolute terms, the sector witnessed a 53 percent YoY fall in its office space absorption, down from 0.1 mn sq m (1.6 mn sq ft) in the first half of 2020 to 0.07 mn sq m (0.8 mn sq ft) in the first half of 2021.

Other Services sector, which includes consulting, healthcare, education, logistics, and other such companies, recorded a huge jump in leasing volumes as the sector's office space absorption increased from 0.002 mn sq m (0.02 mn sq ft) in first half of 2020 to 0.02 mn sq m (0.2 mn sq ft) in the first half of 2021. Other industries to record YoY growth in office leasing volumes in H1 2021 are the Banking, Financial Services and Insurance (BFSI) sector with 147 percent YoY and the Co-working sector with 108 percent YoY increase.

In terms of geography, 93 percent of the total first half 2021 transactions were concentrated in Suburban Business District (SBD)which is HITEC City, Kondapur, Manikonda, Kukatpally, and Raidurg whereas the remaining 7 percent were accounted for in the Peripheral Business District (PBD) West which is Gachibowli, Kokapet, Madinaguda, Nanakramguda and Serilingampally business district.


Next Story
Share it