In its road to development, Hyderabad has stretched its municipal limits towards north, northwest and west. The construction of the international airport, the Outer Ring Road and the elevated expressway corridor has pulled the city on its southern limits as well. The residential localities in the heart of the city are giving way to commercial and retail spaces.

Corporates prefer to move into ready-to-occupy properties before moving into a customized facility, as they need some incubation time before expanding their operations.

Hyderabad has shared 60% of the action in the commercial property market with Chennai and Bangalore in the last 2 years, with 2.7 million sq. ft leased out in 2005. The nature of development is shifting from speculative to demand based. Cyberabad in West Hyderabad covers 51.70 sq. kms, and is host to Infosys, Microsoft, Google, Wipro and Dell, amongst others.

Cushman and Wakefield has forecast that Hyderabad's growing market share will erode the NCR and Mumbai market share of commercial property. By the end of 2007, Hyderabad will be having 12% of the property market in India, second only to Bangalore.

Taller structures will be now be permitted in Banjara Hills, Jubilee Hills and Nandagiri Hills. The restriction on larger than 10 metre structures has been lifted and developers can build upto 3 floors plus stilt and cellar. Builders are upbeat that this would have investors queue up for the flats which range between Rs. 50 to Rs. 75 lakh. The Andhra government is also considering a proposal to increase the coverage area for smaller plots below 1000 sq. metres to 40%.

As for the residential sector, supply is able to meet the demand, and the western suburbs are undergoing a major transformation. Two integrated townships along the Outer Ring Road at Tellapur and Maheswaram village on 600 acres each under the public-private partnership model will be constructed. In the southern suburbs, most of the development is charecterised by residential layouts and plots.

Appreciation

The The current boom in the realty sector has still not been able to satisfy the growing demand from corporates looking for ready-to-occupy properties. IT and ITes will continue to drive the market, and in the next two years, BPOs and call centres, software offices and back offices for financial institutions will occupy the maximum space. Property consultants expect the upward trend in prices to continue, even as the State Government frees up land in different parts of the city and the outskirts. Land availability will facilitate the creation of corporate office space.

In Begumpet, Panjagutta, Ameerpet and Banjara Hills, the new CBDs of Hyderabad, capital prices range from Rs. 3500 per sq. ft to Rs. 4500 per sq. ft. The old CBD areas in Abids, Koti, Himayathnagar and Nampally have slightly lower rates, as new establishments prefer the new locations. Rentals in prime areas range between Rs. 30 to Rs. 45 per sq.ft per month, while Hitec City commands Rs. 35 to Rs. 38 per sq. ft. Rentals and capital values have firmed up of late, with Ness from Israel, Citigroup TCS and Honeywell moving into the city

Retail is pushing rates up, and top brands on 1.5 million sq. ft will occupy space spread over 12 malls by 2008-09. DLF, Rahejas, IJM, GVK and IVRCL are investing in malls in the city. Rental values for retail spaces range between Rs. 35 to Rs. 60 per sq. ft. per month

2006 witnessed a 15-20% increase in capital and rental values in all the residential micro markets. Upcoming residential projects are Fortune Fields by Indu Projects, Hill County by Maytas and SMR Vinay City by SMR Builders. Rates in Central Hyderabad range between Rs. 3308 to Rs. 4590, but premium neighbourhoods like Jubilee Hills fetch rates between Rs. 16200 to Rs. 21600, per sq. foot.

NRI Real Estate Trends

There has been a surge of Indians returning home, as MNCs find NRIs an attractive resource pool. Among others, Motorola has a rewarding Return to India program for its returnees for the Hyderabad centre.

For those planning to return to India, and settle in Hyderabad, real estate developers have not been found wanting. Omega Shelters is working on a niche project, offering villas for 12 crores in Kompally. The Hyderabad residential property market has a choice of the best luxury apartments that Indian real estate can offer.
Developers are setting new benchmarks, and are confident that if they can match up to the tastes of NRIs, they would be able to face up to the competition posed by international developers setting up operations here through joint ventures.

A growing number of Indian developers are naturally targeting the affluent NRI markets, especially in the Gulf, the UK, the US, Singapore and Hong Kong. NRIs are eager to invest in residential properties here, and earn handsome rentals on them.

Hitec City, Kondapur, Guchibowli, Miyapur, Kukatpalli, Madhapur, Jubilee Hills, Banjara Hills, Somajiguda, and Srinagar Colony are dotted with well- appointed, richly furnished apartments, villas, bungalows for returning Indians. Rolling Meadows is a boutique project coming up at Kokapet, Manchirevula.

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