Hyderabad was one of the first cities to embrace the Indian IT/ITeS boom and was initially dubbed “India’s Silicon Valley” in the 1990s and early 2000s. The origins of growth began with the establishment of the Hyderabad Information Technology and Engineering Consultancy City (HITEC City) in 1998 in the Western part of the city.
In 2009 the city’s growth curve was interrupted by political turmoil (demand for Telangana) and economic instability, , affecting the city’s real estate sector from 2009 until 2014. However, following the passage of The Andhra Pradesh Reorganization Act, 2014 in both houses of Parliament in February 2014 and the creation of the separate state of Telangana, political stability was restored. The city’s real estate sector is back on track - office stock in the city nearly doubled from over 23 million sq. ft. in 2008 to about 47 million sq. ft. by 2015,registering a CAGR of 11%.
In terms of residential, West Hyderabad’s share of the city’s overall residential stock has increased considerably in recent years, mainly due to the availability of land parcels and solid demand from employees of IT firms. This trend is likely to continue with Kondapur expected to maintain its position as the preferred residential district in West Hyderabad.
Similarly for retail, the high-income IT segment has been a key contributor to retail demand, prompting developers to construct several new malls in Western Hyderabad. The total organized retail space in Hyderabad city currently stand at 2.7 million sq. ft. , largely concentrated in Western and Central Hyderabad. This is likely to go up by 3.7 million sq. ft. of new supply over the next two years, supporting the entry of more global brands into the city.
The city’s outlook across segments remains positive, with the increase in office space take-up is likely to be driven by the consolidation and expansion of IT majors. For the residential segment, Western and Central Hyderabad are expected to see capital value growth due to their proximity to IT hubs. Similarly for retail, the impact of the state’s retail policy will unfold and is expected to have a positive impact on leasing and investments in the sector.