Hyderabad tops in new office supply in FY21

Hyderabad: Hyderabad continues to be the frontrunner in terms of new office supply, completions and rental growth. The city saw the maximum new office supply in FY21, accounting for 28 per cent of the country’s overall office supply.

In terms of average rental growth between FY18 and FY21 among all top seven cities, Hyderabad registered one of the highest growth rates of 12 per cent from Rs 51 per sq ft in FY18 to Rs 57 per sq ft in FY21.

“Out of the total net absorption of 21.32 million sq ft across the top seven cities, Hyderabad accounted for 27 per cent share with approximately 5.7 million sq ft of absorption. As for new completions during the same period, the city saw maximum supply among all top seven cities with approximately 11.45 million sq ft out of the total 40.25 million sq ft in all top seven cities combined, accounting for 28 per cent share,” Anuj Puri, chairman, Anarock Group told Telangana Today.

From FY18 to FY21, the city has seen net office absorption of 24.7 million sq ft over the four-year period, while the new office completions during the four-year stood at 32.25 mn sq ft, cumulatively, Puri added.

In FY20-21, Hyderabad saw large ticket office transactions such as Wells Fargo taking 1.3 million sq ft space in Divyasree Orion, while Google took one million sq ft space in Salarpuria Sattva Knowledge Capital.

Southern markets

The top southern office markets have overtaken other regions in terms of new supply, net absorption, and even rental growth. Among the top seven cities, Hyderabad, Bengaluru and Chennai saw their share of total office leasing increase to 66 per cent in FY21 against 47 per cent in FY18.

In terms of new office supply too, the southern cities continued to ramp up their share – from 40 per cent in FY18 to nearly 63 per cent in FY21. Of the total new office space completion of 40.25 million sq ft in FY21 across the top seven cities, the southern cities had a 63 per cent share (approximately 25.55 million sq ft).

He added, “The remarkable growth in the office market of these three Southern cities when viewed against their western and northern counterparts is directly attributable to robust demand by the IT/ITeS sector, affordable rentals, and the exponential growth of startups locally over the past few years. The manufacturing and industrial sectors are also driving demand here.”

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