Over 90% Grade A office space in West Hyderabad
Despite govt efforts for equitable development, no movement seen in peripheral markets
image for illustrative purpose
Hyderabad West Hyderabad continued to lead the office demand in the city. More than 90 per cent of the Grade A office space, preferred by the IT/ITeS sector and others, is located in the peripheral office markets in the Western region, comprising locations such as Madhapur, Gachibowli, Raidurg, and Nanakramguda.
"Although the government has been striving towards creating a more equitable development of office space across the city and away from the western hub, not much movement was seen in the peripheral markets towards the east and the south," says FICCI-Vestian report 'Shifting Trends In Indian Office Market: Understanding The New Cogs'.
"The decline in office space absorption notwithstanding, the IT/ITeS sector – the mainstay of the Hyderabad office market – continued to lead the demand, barring H2 2021. The July-December (H2) period of 2021 saw the engineering/ manufacturing segment take centre stage, their share exceeding that of the IT/ITeS sectors by a fair margin," it added.
The report further said, "While several IT/ITeS companies postponed their expansion plans during the pandemic, many of them opted to take up space in co-working/managed offices as a business continuity measure. Consequently, the share of the co-working operators' segment has increased substantially since 2021, recorded at 24 per cent of the total absorption in H1 2022."
According to it, the total co-working office space stock across India is likely to reach 55 million sft by 2023 from the current 30 million sft in 2019. The share of co-working segment in the total office space absorption increased to 20 per cent in January-June (H1) of 2021 from 12 per cent in 2019. Overall office space absorption grew from 7 million sft in 2019 to 7.9 million sft in 2021.
This report was released recently during the webinar '1st Edition of FICCI Commercial & Industrial Real Estate Conclave'. The fact that companies are planning the steady return of employees to offices despite the pandemic continuing, coupled with positive hiring intentions for Q2 2022, will also fortify demand for office spaces in the key office markets of the country.
"Given the market traction witnessed in H1 2022, the office market of the country holds good potential to regain its momentum that was witnessed in the pre-pandemic era, and while the pandemic continues to make its presence felt, the strong fundamentals ruling the market will prove resilient enough," it highlights.
