The year 2017 was eventful for real estate sector with the roll-out of game-changing policies such as GST and RERA. Demonetisation’s impact started to taper off slightly, while real estate investment trusts (REITs) did not take off this year as expected. Affordable housing came out of the shadows and affordably-priced units have been selling like hot cakes in most cities. Hyderabad is seeing consistent growt across asset classes.
In the office space segment, vacancy levels remained unchanged through 2017, hovering at around 14 per cent pan India. Select markets saw lower vacancy levels and are expected to see a further decline in 2018. Overall vacancy levels will likely hover around 15 per cent during next year. Very low vacancy rate and continued demand in the prominent office corridors of Hyderabad and other cities will help better rental appreciation in 2018.
Ramesh Nair – CEO & Country Head, JLL India, said, “Rents in these markets are expected to rise faster into the range of 6-8 per cent (y-o-y). Hyderabad is expected to cross its historic rental peaks of 2017 in the next year.”
The net office space absorption for 2017 nationally will be at around 32 million square feet if all supply expected to come in this year actually enters the market. In 2018-19, Hyderabad will be among the cities that will see highest absorption of office space. The future supply is expected to be healthy in 2018-19 in the city.
At a pan-India level, total office stock across the seven major cities including Hyderabad is forecast to reach around 600 million square feet by end of 2019. In alternate office (or co-working) spaces, around 1.2 million square feet got absorbed across major Indian cities including Hyderabad in 2017.