Hyderabad’s Peripheral Areas Poised for Real Estate Boom, Says Colliers Report
Hyderabad’s real estate sector is set for significant growth, particularly in its peripheral regions, according to Colliers’ latest report titled ‘Hyderabad: Emerging Real Estate Growth Hotspots.’ The report highlights the impact of crucial infrastructure projects such as the Metro Phase II extension, the proposed Regional Ring Road, and expanding industrial corridors.
Emerging Growth Frontiers
Peripheral areas in Hyderabad’s North, South, East, and West regions are expected to witness robust growth. These areas are projected to account for 5-10% of annual office space demand and 20-25% of new supply over the next three to five years.
While real estate growth in West and Central Hyderabad will continue, the report predicts a 10-20% increase in residential property prices in Hyderabad’s peripheries over the same period. The residential sector in these emerging zones is also set to gain momentum, with property prices forecasted to rise by 10-20%.
Driving Factors for Growth
Government policies such as the Information & Communication Technology (ICT) 2.0 policy, the Micro, Small, and Medium Enterprises (MSME) policy, and the Data Center policy are expected to foster a favorable business environment. Combined with affordable real estate prices, these policies are poised to attract businesses and investors to Hyderabad’s peripheries.
Key Development Areas
The report indicates that peripheral regions could account for 20-25% of Hyderabad’s Grade A new supply, a significant jump from the current less-than-5% share. Locations such as Kokapet, Shamshabad, Uppal, and Pocharam are expected to see considerable growth in Grade A commercial spaces, contributing up to 10% of the city’s annual leasing activity over the next 3-5 years.
The Grade A stock in peripheral areas is projected to expand to 20-25 million sq. ft., rising from the current 13 million sq. ft. With this growth, average rental rates across these areas are expected to increase by 5-15% in the near-to-mid term.
Rising Property Prices
In the Western Periphery, key locations like Kokapet, Neopolis, and Nalagandla have already seen a 50% surge in property prices over the past five years. This upward trend is expected to continue, with prices projected to rise by another 10-15%. Meanwhile, affordable and mid-segment housing in Tellapur, Lingampally, Bandlaguda, and Miyapur is gaining traction.
Industrial and Commercial Growth
The Southern Periphery, including Shamshabad, Kothur, and Shadnagar, is expected to experience notable growth driven by industries, warehouses, and data centers.
Expert Insights
Arpit Mehrotra, Managing Director (Office Services) at Colliers India, highlighted Hyderabad’s evolving office market. “Hyderabad’s office market is maturing rapidly, contributing to one-fifth of the demand and over one-fourth of new supply among India’s top six cities in 2024,” he stated.
Mehrotra emphasized that the West Periphery micro-market, including Kokapet, Neopolis, and Narsingi, is poised for heightened commercial activity. Due to price arbitrage compared to established IT hubs like Gachibowli and HITEC City, combined with improved metro connectivity, this region is emerging as an attractive business hub.
While rental rates in the West Periphery are expected to increase by 10-15%, the existing price gap will continue to draw both domestic and global occupiers, including Global Capacity Centres (GCCs).
Conclusion
With significant infrastructure advancements, favorable government policies, and increasing investor interest, Hyderabad’s peripheral areas are well-positioned for substantial real estate growth. As these regions transform into thriving commercial and residential hubs, they present exciting opportunities for both developers and property buyers.
