Hyderabad Real Estate: A Hotspot for Developers and Investors

Hyderabad has quickly become one of India's fastest-growing real estate markets. With a 49% increase in housing sales in 2023, the city has attracted significant interest from real estate developers and investors. In the first half of the year, hyderabad achieved its highest housing sales value in five years, totaling Rs 58,481 crore. In june 2024 alone, residential property sales reached Rs 4,288 crore. The city also saw robust office space leasing, with 2.5 million square feet leased, an 11% increase over the average quarterly leasing activity of 2023.

The demand for office space is driven mainly by the Banking, Financial services, and Insurance (BFSI) sector, which contributed 36% of the leasing, followed by the IT sector at 23%. Flexible workspace operators accounted for 20% of the leasing activity, nearly double the previous year’s average.

Hyderabad's real estate growth reflects trends seen in other major cities like Delhi-NCR, Mumbai, Bangalore, Pune, and Kolkata, all experiencing positive expansion. Contributing factors include rising economic prosperity, growing purchasing power, effective fiscal policies, regulatory measures by RERA enhancing trust in real estate, and government policies promoting the sector.

Specific trends in hyderabad and telangana include:

FDI in Telangana: The state has successfully showcased its investment potential, doubling its foreign direct investment (FDI) to USD 3 billion and ranking among the top five states for investment in India. As the state capital, hyderabad benefits significantly, with businesses like amazon showing keen interest. This influx boosts commercial, retail, and residential real estate by increasing economic value and generating high-quality jobs.

Strengthening business Environment: The rise in FDI reflects Hyderabad’s evolution from a historically rich city to a major player in India’s tech revolution. This transformation has spurred a surge in the real estate sector, attracting both domestic and international investors. Telangana’s IT industry has seen a 31% increase in IT and IT-enabled services exports in 2022-23, further driving growth in office leasing and residential developments around key office hubs.

Growth of Hyderabad-based High-Net-Worth Individuals (HNWIs): The increase in premium and luxury real estate signifies a rise in HNWIs in Hyderabad. According to Henley and Partners, the city saw a 78% growth in millionaires as of december 2022, ranking 10th globally for HNWI growth. This reflects rising economic prosperity and enhanced purchasing power, creating a local base of individuals with investable wealth of $1 million or more.

Positive Business-Centric Policies: government policies, both state and central, have improved the economic environment in Telangana. The telangana State Industrial Project Approval and Self-Certification System (TS-iPASS) Act has significantly boosted industrial investment, contributing to Rs 3.30 lakh crore in the past decade.

Increasing customer Trust in Real Estate: The implementation of RERA has created a more stable and transparent real estate environment, enhancing investor confidence and streamlining business processes. Housing projects in hyderabad have achieved a 74% completion rate, bolstering trust among investors and buyers.

Looking ahead, hyderabad is expected to see further growth with projections indicating the addition of over 1.3 lakh housing units in the next two to three years. This expansion is likely to drive substantial revenue from property sales in 2024. The office and commercial real estate sectors are also performing well, with the city accounting for 31% of office space acquired by Global Capability Centres nationwide in the first half of 2024. With strong fundamentals and favorable conditions, hyderabad will continue to attract real estate developers and investors.
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Balasahana Suresh

16/09/2024 05:07 PM