Representative image of office
Reuters File Photo
Hyderabad: Global Capacity Centres (GCCs) of multinational corporations are betting big on Hyderabad, as the city has recorded its best office transaction volumes since 2020, with volumes rising by 17% year-on-year (YoY) to 10.3 mn sq ft while completions reached an all-time high in 2024.
According to a latest report of the just concluded year 2024 by property consultant Knight Frank India, the highest area transacted came from GCCs, with 49% of the total area transacted. The residential market of Hyderabad too recorded a healthy YoY growth of 12%, selling 36,974 units in 2024.
The city witnessed an all-time high sale in 2024. The residential launches, however, saw a decline of 6% YoY, with a recorded supply of 44,013 units in 2024. Residential prices grew by an average of 8% YoY during 2024.
Knight Frank India report said office completions reached an all-time high with a sharp 139% YoY increase in 2024, compared to 2023. With new supply of 15.6 mn sq ft, this surge was anticipated owing to the consistent upward trajectory in office absorption.
Global Capacity Centers (GCCs) of multinational corporations continued to favor Hyderabad due to its skilled talent pool, being known and driven by its renowned educational institutions and thriving tech ecosystem. The highest area transacted came from GCCs; with 49% of the total area transacted.
Businesses focused primarily on the Indian market witnessed a 82% YoY increase in transaction volumes and accounted for 9% of the total office space leased in 2024.
Share of transactions by flex space operators also saw a significant 79% YoY growth. The growing popularity of flex spaces, attributed to their scalability and flexible lease tenures, has made them an attractive option for emerging businesses and new market entrants.
The influx of new space led to a rise in the overall vacancy rate from 14.9% in 2023 to 18.3% in 2024, though vacancy in HITEC City, which is one of the most sought-after locations, remains less than 10%, as Grade A buildings showed exceptionally strong demand with just 2-3% vacancy. Occupiers have shown a clear preference for SBD locations with HITECH City accounting for 77% of the total leasing during 2024.
“Hyderabad continues to emerge as a preferred location for GCCs, as is evident with the transaction volumes. Hyderabad is also becoming increasingly attractive to MNCs owing to its robust talent pool and infrastructure developments, with them seeking to capitalize on these advantages. Aforementioned trends show a clear indication towards Hyderabad's role as a global and domestic business hub alike,” said Knight Frank India Occupier Strategy and Solutions (Hyderabad and Chennai), National Director, Joseph Thilak.
Hyd sees decline in new launches of residential real estate owing to HYDRAA
The residential real estate market in Hyderabad also witnessed a historic high sales volume in 2024, recording sales of 36,974 units. The city saw a 12% YoY growth compared to 2023. The growth can be attributed to the city's enduring appeal among homebuyers seeking lifestyle upgrades and enhanced living conditions.
However, new launches saw a decline of 6% YoY recording launch of 44,013 units in 2024 mostly due to increased regulatory oversight by the Hyderabad Disaster Response and Asset Protection Agency (HYDRAA), which was recently established to address illegal constructions on encroached lands, including lakes, canals, and government property.
Prices grew at an average of 8% YoY, and this consistent price appreciation is largely attributed to a steady demand for high-value properties and the launch of premium inventory at elevated price points. Locations like LB Nagar and Kompally saw a healthy jump in annual price change of 11% and 10% respectively.
The shift toward premium housing remains a defining trend in Hyderabad’s residential market. Properties priced between Rs 1 crore to Rs 2 crore constituted 45% of market share in 2024 compared to 37% in 2023. This growth is indicative of sustained demand for spacious homes with state-of-the-art amenities, driven by affluent homebuyers prioritizing quality living spaces.
Joseph said that the year 2024 was phenomenal for the residential market of Hyderabad, with the transactions being on record high and continued improved sentiment towards home buying. “The segment of homes priced at Rs 1 crore – Rs 2 crore share dominated the market during the year exhibiting the shifted preference of buyers towards larger spaces,” he added.