Hyderabad’s office stock crosses 90 mn sq ft as of Q3 2021: CBRE

With Hyderabad succeeding in containing the pandemic and relaxing restrictions on business and social activities, corporates have now slowly started to reopen their offices.

Witnessing a rising office demand and huge influx of supply, especially along IT and Extended IT Corridor, Hyderabad’s investment-grade office stock has doubled from 2016 – crossing over 90 million sq ft at the end of Q3 2021. Continuing the momentum, the city is expected to add about 30-35 million sq ft of investment-grade business parks over the next three years, according to a report by CBRE.

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Driven by policy and infrastructure initiatives, Hyderabad’s IT / ITeS sector saw a remarkable turnaround over the past five years. This augmented the growth of the commercial real estate sector in the city. Enticed by this progress, global corporates forayed into the city and further expanded their operations, owing to a strong business environment developed over the years. Several companies opted to locate their outsourcing centres, back offices, research & development (R&D) facilities as well as their regional headquarters in Hyderabad.

Today, it is one of the most sought-after office destinations in the country, driven by various growth drivers. As a result of rising office demand, the city saw a huge influx of supply, especially along IT Corridor and Extended IT Corridor. This caused the investment-grade office stock of the city to double from 2016 and cross 90 million sq. ft. by the end of Q3 2021.

With Hyderabad succeeding in containing the pandemic and relaxing restrictions on business and social activities, corporates have now slowly started to reopen their offices.

KEY GROWTH DRIVERS OF HYDERABAD’S OFFICE SECTOR

In partnership with Hyderabad Software Enterprises Association (HYSEA), CBRE South Asia Pvt Ltd has come out with its report ‘The Next Normal – Reimagining Hyderabad’s Real Estate Landscape,’ which states that over the years, Hyderabad has positioned itself in the national spotlight by attracting large-scale investments in industries such as IT / ITeS, life sciences, electronics, etc. The report deep dives into the growth of the office sector in the city, owing to the extensive government policies, efficient urban infrastructure, and availability of skilled workforce.

According to CBRE’s recent ‘APAC Future of Office Survey’ report, 47% of occupiers across APAC have started encouraging their employees to return to offices, alongside providing an option to work from home.

CBRE believes that the shift in working patterns indicates that varied hybrid work models are likely to be the new norm. CBRE’s latest report indicates that most occupiers are expected to require employees to spend a majority of their working week in the offices across APAC.

Commenting on the announcement, Anshuman Magazine, Chairman, India & South-East Asia, Middle East & Africa, CBRE, said, “The pandemic influenced the way businesses function, and their overall strategies. They have adopted new working models that keep workplace flexibility at the centre, balancing employee benefits and business profitability. The demand for physical office spaces will continue to rise as employees look forward to normal workdays; with mass vaccination propelling further sectoral growth. Hyderabad’s policy initiatives along with efficient urban infrastructure are expected to further aid the region’s overall development.”

Commenting on the same, Ram Chandnani, Managing Director, Advisory & Transactions Services, India, said, “Since the onset of the pandemic we have been witnessing an accelerated change in performance, expectations, and role of the workplace. While firms have been successful in changing their strategies to ensure seamless functioning, they have also effectively leveraged the potential changes in work styles. While for many the work from home culture may continue, the demand for physical workspaces is expected to be driven by flex offerings.”

As the business environment is likely to continue to improve, increased adoption of technology, hybrid workplaces, hub-and-spoke models, flexible workspaces etc. are expected to shape the next normal of working across India, particularly in Hyderabad.