With the sluggish economy and political uncertainty, Hyderabad’s office space rentals have declined by a whopping 22 per cent in 2012, making it the cheapest city among India’s top eight cities. It is also the second cheapest in the world. So, it’s the best time to buy office space as this scenario is not expected to stay longer. “In the next five years, Hyderabad is expected to witness office space supply of 25 million square feet. Out of which approximately 22 million square feet is expected to be in demand immediately. Demand is driven by the increase in sectors like engineering, professional services and technical services in the city,” said Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield.
Among three prime locations for offices, central business district, which comprises SP Road, Raj Bhawan Road, Panjagutta and Somajiguda, are expected to see decline in rentals as more and more offices shift to cheaper locations in the peripheral business district like Hitec City, Madhapur, Gachibowli and Kondapur. “CBD saw a sharp drop of 22 per cent during October to December period because developers were trying to lease the limited available stock at competitive prices. Also, with most companies trying to be cost-conscious in the backdrop of moderating economic growth and increasing costs, Hyderabad appears to be the best place as it offers the most affordable office space in India. According to another real estate research firm Jones Lang LaSalle, Hyderabad’s costliest place — Banjara Hills — has a rental tag of Rs 50 to Rs 60 per sft compared `75 for SB Road of similar category in Pune.
The city also has excellent infrastructure, which is key for a good standard of living. “A number of factors will act as catalyst for the growth,” explained Sanjay Dutt. According to him, “The leasing activity in Hyderabad is likely to gain momentum in the next 6-9 months with improvement in economic conditions and market sentiments and continued demand from IT and ITeS sector.”