Monthly rentals of office space are on the rise in Hyderabad. In the 2017–18 financial year, the rentals per square feet of office space increased from Rs 51 per month to Rs 53 in 2018–19, Rs 56 in 2019–20 and Rs 57 in the 2020–21 financial year. In the last financial year, there have been two major office space deals in Gachibowli area in the city. Wells Fargo has leased 13 lakh sq.ft of office space in Divyashree Orion, while Google leased 10 lakh sq.ft of office space in Salarpuria Satva Knowledge Capital.
In fact, southern States are in the forefront in recording a growth of office space rentals. In the last financial year, the rental per sq.ft of office space in Bengaluru was Rs 77 per month. It was Rs 60 in Chennai, Rs 125 in MMR (Mumbai Metropolitan Region), Rs 68 in Pune and Rs 78 in NCR (National Capital Region).
Rising Demand?
Anuj Puri, Chairman, Anarock Property Consultancy, said that the demand for office space in the southern States has been on the rise for the past two to three years as startups have continued to grow exponentially even as the manufacturing and industrial sectors have witnessed growth. He said office space construction companies and investors were attracted to the city as prices were affordable in Hyderabad when compared to other major cities in the country.
More demand in Southern States
The southern States continue to witness more office space transactions in the country. They are recording growth in supply, transactions, and also rentals. During the last financial year, 2.13 crore sq.ft transactions were registered in seven major cities of the country, of which the southern States accounted for 66 per cent. The western states accounted for 21 percent and the northern states had 11 percent share.
During the 2020–21 financial year, 1.4 crore sq.ft transactions were recorded in Hyderabad, Chennai and Bengaluru, accounting for 66 per cent of office space in the southern States. Among others, the western states had transactions of 45.6 lakh sq.ft in Mumbai and Pune, while 23 lakh sq.ft was leased out in NCR in the northern States. The top-7 cities in the country accounted for 3.11 crore sq.ft transactions in the 2017-18 financial year, with the southern states accounting for 47 per cent, the west 33 per cent and the north 17 per cent. The 2018–19 fiscal saw 3.58 crore sq.ft transactions, with 57 per cent in the South, 25 per cent in the West and 15 per cent in the North parts of the country. In the 2019–20 financial year, 4.3 crore sq.ft transactions were carried out, with 55 per cent in the South, 22 per cent in the West and 20 per cent in the North parts of the country.
Southern States dominate in supply as well
The supply of new office space is also high in the southern States. In the last financial year, 4.02 crore sq.ft was supplied, of which South accounted for 63 per cent. Western States account for 19 percent and the northern States have 18 percent share. The same is true for the 2019–20 fiscal as well where a total of 4.36 crore sq.ft of office space was supplied, with 59 per cent in the South, 16 per cent in the West and 24 per cent in the Northern States.
