More Than 36.4 Million sq ft of Grade A Office Development Under Various Stages of Construction Should Increase the Total Office Stock by 60% Over 2018-21: Colliers International India(11:00 Hrs. IST)
HYDERABAD, India, November 19, 2018 /PRNewswire/ --
With a steady influx of large-scale occupiers from the Information Technology and Information Technology enabled Services (IT/ITeS) sectors into the city, the Hyderabad office market is likely to continue to attract firm demand for office space over the next three years. Hyderabad recorded 2.13 million sq ft of gross office leasing in Q3 2018. YTD gross absorption is pegged at 3.60 million sq ft, which is similar to 2017 levels. Considering the large-scale expansion plans of IT/ITeS occupiers, the demand outlook is expected to remain firm towards the end of 2018 and the momentum is likely to continue over the next three years.
"Hyderabad office market is likely to continue to attract firm demand for office space over next three years while rental appreciation is likely to continue driven by upcoming Grade A stock. The IT/ ITES sector is likely to stay and dominant investments by the government should equally boost demand from the pharmaceutical and biotechnology sectors," says Arpit Mehrotra, Senior Director, Office Services (Bengaluru & Hyderabad) at Colliers International India.
In Q3 there was an increase in the number of deals by IT/ITeS occupiers and the average deal size was 79,000 sq ft, higher than the annual average over the last two years of 45,000 sq ft.
Hyderabad has witnessed new Grade A supply of about 2.90 million sq ft so far in 2018. The forecast suggests a new Grade A office completion of more than 36.4 million sq ft over 2018-21. About 93% of this upcoming supply is concentrated in the SBD micromarket while the remaining is distributed among the PBD (3%), Off CBD (2%) and CBD (2%) micromarkets. The upcoming supply is likely to increase the city's total office stock by 60%.
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