Savills, an international property consultant, releases the report titled – Hyderabad: The Sprint on the 26th of February 2023, states that Hyderabad is surging as the economic powerhouse of India. With offices in Bangalore, Chennai, Delhi NCR, Hyderabad, Mumbai, Pune and Ahmedabad, Savills began its India operations in early 2016. The report highlights the economic growth of Hyderabad since the formation of a separate Telangana state and the key factors that have led to this growth.
Since the formation of the state of Telangana, Hyderabad has been on the top in terms of ofLice leasing activity. Residential real estate has also been strong, with the city registering the highest housing sales in 2022 in the last 8 years. In the retail segment too, annual supply addition increased for the Girst time since 2018, as 2022 witnessed around 1 mn sq. ft. of supply infusion. As of Dec 2022, Hyderabad had around 8% share in the operational mall stock of India. Data centres, the sunrise sub-sector within real estate, have emerged as a favourite asset class for investors. Of the 500 acres of data centre related land transactions in 2022 in the country, around 26% came from Hyderabad.
The economic success story of Hyderabad has been highly based on the below four key factors-
Policy Push: Proactive government policies such as Information Communication Technology (ICT) Policy 2.0, Telangana Electric Vehicle (EV) and Energy Storage Solution (ESS) Policy, Space-Tech framework, state-wide optical Gibre network and Growth in Dispersion (GRID) policy, and TS-ipass, have powered the growth story of Hyderabad.
Infrastructure: Steady infrastructure creation and upgrades, including the Nehru Outer Ring Road (ORR), expansion of metro rail and the implementation of a Strategic Road Development Plan (SRDP), have ensured excellent connectivity in and around the city, thereby enhancing core real estate potential. Other planned infrastructure developments include the Regional Ring Road (RRR) and Elevated Bus Rapid Transport System (EBRTS).
Affordability: Relatively affordable price points have deGined ‘The Hyderabad Opportunity’ to a large extent particularly in the commercial ofGice market, wherein the entire city enjoys a cost advantage. Hyderabad stands to beneGit most from sub-dollar ofGice rentals over a long period of time. Therefore, it is a major market for Glexible spaces. The city witnessed 2.3 mn sq. ft. of leasing activity from Glexible spaces in the period 2020-22, which is around 15% of the shared space demand in the country. Similarly, residential capital values and rentals for the secondary business districts or sub-urban areas of Hyderabad are 10-20% lower, compared to similar localities in other major cities in southern India.
Human Capital: In FY22, almost 1.5 lakhs employment opportunities were realised in the IT/ITeS sector which in turn translated to a phenomenal one-third of the IT related jobs in the country. By the end of FY22, IT/ ITeS employed around 7.8 lakh people in the state (primarily Hyderabad); this is a 24% YoY increase compared to FY21. People are particularly drawn in by the quality of life the city offers to working professionals and students alike. It is however to be noted that a Gifth driver of the momentum is also now working at great pace.
That Gifth element is the pin-sharp sectoral-focus, summarised as:
- Sectoral Focus: A Transit Oriented Development (TOD) Approach- This approach is adopted to address the challenges of urban sprawl by concentrating the activities at a node or along a public transit corridor, thereby increasing the efGiciency of land utilisation. Areas in proximity to the airport in South Hyderabad can beneGit the most from such a model.
- Sharp focus sectors such as Life Sciences, Data Centres, EV Ecosystem, AVGC and Aerospace: Developing a world class life science city in the peripheral areas of Hyderabad will provide a significant boost to existing clusters. It is anticipated that revenues from the life sciences sector in the state will be 3-4 times the current levels and reach USD 40-50 billion by 2030.By 2025, Hyderabad will have a 7-10% share (~2.5 mn sq. ft.) in India’s data centre stock.
- Hyderabad’s EV ecosystem is likely to witness USD 3- 4 billion of investments, employing more than 1 lakh people by 2030. Creation of a world class Telangana Mobility Valley (TMV) is also a big step in this direction.Currently, around 150 Animation, Visual Effects, Gaming and Comics (AVGC) companies provide direct employment to approximately 30,000 people.
- With significant impetus from the state government, the sector can support 0.5-1.0 lakh people in the next 5 years.
- The Maintenance, Repair & Overhaul (MRO) industry within the aerospace segment in the country is likely to reach USD 2-3 billion in the next Give years, and Hyderabad is likely to play a prominent role in it.