Categories: TOP STORIES

Hyderabad.. Hot destination for life sciences

Hyderabad ranked number three after the National Capital Region of Delhi and Bengaluru in the choice of establishing their organization by the life sciences industries. This has been indicated by a report released by renowned real estate consulting body CBRE titled: “Life Sciences in India: The Sector of Tomorrow.” The report dealt with the office space requirements by the life sciences organisations, their occupancy trends and emergence of new customers. During 2019-22, the life science organisations took 1.6 msft of space on lease, the highest space to be leased out to such organisations after Bengaluru and Delhi. On a Pan-India basis, Hyderabad occupies 19% of the total share of the office space leased by life sciences industries. This is attributed to establishment of life sciences clusters, grade-A office spaces, quality R and laboratories, incubation centers, prevalence of the premier research organisations in Hyderabad.

 

The total office space leased by these organisations was reduced to 0.1 million sft in 2020 as against 0.3 million sft in 2019. However, it doubled to 0.6 million sft in 2022. During the past three years, total area of office space leased out by life sciences units was put at 1.6 million sft in three years. Health care, pharmaceutical sectors and sub-sectors during the past four years emerged as the fore runners in leasing the office space. In fact, transactions leasing 50,000 sft and less constituted 57% of the total transactions. Biologic-E has gone on record saying that it is going to start three manufacturing units at a total investment of Rs 1800 crore in Genome Valley. It declared that it is attracting huge investments in this regard. On Pan-India basis, US-based life sciences organisations occupied the top position with their total share of 56% in leasing office space during 2019-22. They are followed by companies based in Europe, Middle-East and Africa (24%), domestic companies (19%) and APAC units (1%).

 

During 2019-22, health care and medical devices making units formed the significant sub-sectors to promote their units in Bengaluru and Delhi. However, pharmaceutical companies have priority to take office space on lease in Hyderabad, Chennai and Mumbai. By 2019, Gujarat has had the largest number of WHO-GMC certified pharma making units, followed by Maharashtra, Himachal Pradesh and Telangana. The states of Uttarakhand, Tamil Nadu, Karnataka and Andhra Pradesh also emerged as important manufacturing zones. Telangana has topped the chart in having the highest number of US-FDA certified plants. It is followed by Maharashtra, Gujarat, AP, Karnataka and Tamil Nadu. The number of such plants is significant in MP and Himachal Pradesh. Gujarat state occupied top position in general manufacturing, but Telangana is the fore runner in analysis and API manufacturing. In next three years would see expansion of the existing life sciences firms and establishment of bulk drug parks, medical devices parks, pharma cities and establishment of clusters offering top range R and D amenities.

The space to be leased by pharmaceutical, bio-technology, medical devices and health care firms are going to increase in the next quarter. Some select companies are also keen to take sites on lease. However, their priority would be to take space having plug-n-play features, ESG standards on lease. The growth of rentals depends on the growth of the life sciences sector demand in the country. In 2023, the inflation is likely to decline. In this backdrop, the cost of construction is going to increase only marginally.

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