HYDERABAD: A report published by Savills India shows that demand for office space leasing in Hyderabad has reduced drastically from eight million square feet in 2019 to a mere 1.7 million square feet in the first half of 2020. Experts believe that although the IT sector of Hyderabad constitutes the majority of the demand of office space leasing, the shift to ‘work from home’ environs has led to the change.
On the supply side, additional stock creation in the city office market reduced by over 45 per cent, to four million sq ft. While 53 per cent of the reduced demand has been attributed to the IT sector, the rest of the demand was from BFSI (Banking and Finance Industry) and healthcare. Surprisingly, the manufacturing industry seemed to quote negligible demand.
Owing to the dominating IT industry, the services sector continued to drive office space take-up with more than 50% sectoral share. The report highlights that at an all-India level; Hyderabad witnessed slow office leasing and accounted for close to 12% share in office space transactions. Sesha Sai, MD, Hyderabad, Savills India said “The demand for office spaces for medium-term is expected to rebound faster than they have dropped.
Hyderabad will be the biggest beneficiary when the tide turns, as companies will look for talent, enabling environment and good quality supply of real estate, all of which are available in the city. With the emergence of hub-and-spoke real estate strategies, the State government’s push to evenly spread development across the city, hitherto under-developed markets will see an increased demand for space.”
53 % of the reduced demand has been attributed to the IT sector, the rest of the demand was from BFSI (banking and finance industry) and healthcare