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Hyderabad: Amid fears of a global recession, Hyderabad’s property market is over five times the current demand – this is the highest inventory ever. While the city has at least 25 to 30 million square feet (sft) of ready-to-occupy office space dotting its IT corridors, another 50 million sft is in the pipeline which is set to come up in the next three years.
However, not even an inch of it has found a buyer yet, market reports confirm.
Annual absorption is expected to exceed 6 million sq ft in 2023 – about 50% less than in 2019. year,” said a senior real estate consultant, adding that the financial district alone has about 15 million sq ft of ready office space. “But not many corporates are willing to sign leases there,” the consultant added. Along with the sharp decline in demand in cities, it is also the lack of social infrastructure that is keeping them away.”
Industry representatives are not pressing the worry button just yet. “Real estate business moves in cycles. There has been an issue of oversupply post Covid, but this is true for every city. Also, it is temporary. Once all the offices open and their employees come back, Things will start to look up again.” P Ramakrishna Rao, Chairman, CREDAI-Hyderabad,
But the concern is inevitable that the residential overhang is also huge. While, on an average, Hyderabad sells between 28,000 and 30,000 units every year, it now has a supply of over 80,000.
“When things were going well pre-Covid, everyone jumped into the office bandwagon expecting huge profits. Factors like exorbitant land rates and unlimited FSI pushed developers to build 4 to 6 lakh sqft per acre ( It is not more than 1.2 to 1.5) lakh sft in other metros with FSI cap). This oversupply is a result of that overzealous attitude,” said a realtor.
The realtor said, “Top players may be successful. But medium and small-sized firms with large units above 3,000 sq ft may find it difficult to sell.”
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