Office Space Demand In Hyderabad Likely To Go Up 4% Annually In 2020-2024
New Delhi: Grade A office space demand in Hyderabad is expected to go up at around 4 percent annually in the 2020-2024 period crossing 11 million square feet by the end of 2024.
The current stock of Grade A office space in western corridor of Hyderabad is around 59 million square feet. This makes this part of the city the largest micromarket in Hyderabad. The supply is expected to increase the stock by 141 percent by 2024, according to a report by property consultant Colliers.
Around 46 million square feet of new supply is planned in the 2020-2021 period in Hyderabad. This will result in supply over-stripping the expected demand by two times and the vacancy levels will thus rise to 10 percent from over 5 percent now. The rental growth, too will fall in western Hyderabad. It is likely to fall from the current 8 percent witnessed in 2017-2019 to about 2.5 percent in 2020-2021 period.
“The Western corridor of the city is expected to witness a robust growth in leasing activities projected to reach 3.8 million sqft of pre- commitments, to be occupied in 2020.The occupiers from the Central Business District (CBD) who are looking for office space to consider HITEC City and Rai Durg submarkets for expansion or relocation in the wake of the huge upcoming supply of 8.0 million sq ft planned by the end of 2020”, says Sankey Prasad, Managing Director and Chairman at Colliers International India.
Hyderabad’s total stock was around 65 million square feet towards the end of 2019 and about 90 percent of the supply was concentrated in the Western corridor of the city. Around 84 million square feet of new supply is expected to come up in this submarket by the end of 2024.
The co-working players leased four times the space in 2019 as they did in 2018 in Hyderabad.
By the end of 2020, around 4 million square feet of pre-commitments is likely to come up in Hyderabad.