HYDERABAD OFFICE MARCH 2019

MARKETBEATS
5.4% 1.42 msf 2.64 msf
GRADE A VACANCY YTD GRADE A GROSS GRADE A NEW SUPPLY
(Q1 2019) L E A S IN G A C T IV IT Y ( 2 0 1 9 ) (Q1 2019)

HIGHLIGHTS MARKET INDICATORS - MADHAPUR

Low vacancy levels to prevail in the short-term 12 month
Hyderabad office market, in the short to medium term, is likely to see a continuation of the Q1 2018 Q1 2019 Forecast
current low vacancy scenario which is being further exacerbated by most of the upcoming Overall Vacancy 4.1% 3.2%
supply of 2019 already pre-committed. The limited availability in the key sub-markets of Weighted Average Net
Madhapur and Gachibowli is a limiting factor for occupiers with immediate expansion Asking Rental (INR/sf/month) 62.76 70.76
requirements. As such, larger corporate occupiers are continuing to pre-lease in upcoming YTD Net Absorption (msf) 545,532 1,903,288
office and tech parks. Nearly 1.0 msf of upcoming supply was further pre-leased during the
quarter with key examples including Intel and JPMC. Overall occupier demand has more GRADE A OVERALL RENT
than doubled on a y-o-y basis, reflecting the prevailing healthy market conditions. & VACANCY RATE
Developers are rushing to complete projects ahead of schedule and are even taking to
optimal steel and/or pre-fabrication based construction methods to enable faster 70.00 16%
14%
completions for future projects in the current high-demand environment to meet occupier 60.00 12%
timelines. 50.00 10%
8%
Rental strengthening to continue throughout the year 40.00 6%
The high pre-commitment levels in the upcoming supply coupled with a strong demand 30.00 4%
momentum are likely to keep rents on a north-bound growth curve. Rents in Madhapur and 2%
20.00 0%
Gachibowli have risen 13% y-o-y and by 3% q-o-q with the same momentum likely to 2012 2013 2014 2015 2016 2017 2018 Q1
sustain through the year. Consequently, a 3-4% quarterly rental growth is expected for the 2019
next few quarters till the supply pipeline increases to cater to demand and vacancy levels Net Asking Rental (INR/sf/month) Vacancy Rate (%)
stabilize at a slightly manageable level. The high rents in the western markets are also
creating an opportunity for the East Hyderabad office market to slowly start finding favour
GRADE A PRE COMMITMENT AND NET
with occupiers.
ABSORPTION
A Cushman & W akefield Serviced office spaces to impact market dynamics 7,000
Research Publication
Quite a few, new serviced office players are commencing operations in Hyderabad, 6,000
beginning since last year, cashing in on the ongoing space crunch which is limiting the 5,000
4,000
DATA short-term growth plans for occupiers. These operators are choosing Grade A as well as 3,000
INTO refurbishing Grade B spaces to offer a managed office environment, targeting enterprises 2,000
ACTION to cater to their immediate space needs. Occupiers are also more open to such 1,000
0
arrangements, which is encouraging firms like TableSpace, Smartworks, Simplywork, 2012 2013 2014 2015 2016 2017 2018 Q1 2019
CoWrks to expand their portfolios in the city. Pre-commitment (000' sf) Net Absorption (000' sf)
www.cushmanwakefield.com
 HYDERABAD OFFICE
MARKETBEAT MARCH 2019
GRADE A WTD. AVG. RENT*
YTD
Rohan Sharma SUB INVENTORY VACANCY
YTD GROSS
PLANNED & UNDER CONSTRUCTION
YTD NET
LEASING ABSORPTION
Director MARKET (SF) RATE CONSTRUCTION COMPLETIONS
Research, Services ACTIVITY# (SF)
(SF)* (SF)
(SF) INR/SF/MO US$/SF/YR EUR/SF/YR
Tel: +91 124 4695555
Rohan.Sharma1@cushwake.com
Madhapur 35,642,872 3.2% 1,134,346 22,975,334 1,870,000 1,903,288 70.76 12.3 10.9

Gachibowli 12,648,825 9.8% 270,855 20,391,000 770,000 871,692 54.25 9.4 8.4

Peripheral East 1,348,000 15.5% 0 800,000 0 0 30.86 5.4 4.8

Total^ 50,746,518 5.4% 1,416,201 45,315,574 2,640,000 3,131,270 58.18 $10.1 €9.0

The report highlights Grade A details only. Certain indicators are historically corrected by addition / deletion of older / refurbished projects as per grade A
classification and accounting for changes in built-up / leasable area besides adjusting tenant leases to reflect accurate market conditions.
#YTD gross leasing activity includes pre commitments; * Includes planned & under construction projects until 2021
Net absorption refers to the incremental new space take-up; renewals not included in leasing activity statistics
*Weighted average asking rental rates for vacant spaces that provide core facility, high-side air conditioning and 100% power back up
*Planned & U/C supply captured until 2021
^Totals include a smaller portion of grade A properties outside the above-mentioned submarkets.
BFSI - Banking, Financial services and Insurance, IT-BPM – Information Technology – Business Process Management
Key to submarkets:
Madhapur includes Madhapur, Kondapur, Raidurg; Gachibowli includes Gachibowli ,Nanakramguda, Manikonda,
Peripheral East includes Pocharam and Uppal;
US$ 1 = INR 69.17 ; € 1 = INR 77.84
Numbers for the first quarter are based on market information collected until 20 th March 2019
DATA
INTO
ACTION
KEY LEASE TRANSACTIONS – Q1 2019

PROPERTY SUBMARKET TENANT SF LEASE TYPE

Salarpuria Sattva Knowledge City
A Cushman & W akefield Madhapur Intel 319,284 Pre-commitment
Research Publication Parcel - 4
Laxmi Infobahn Tower – 2 Gachibowli PepsiCo 102,000 Fresh Lease
Fresh Lease
Cushman & Wakefield (NYSE: CWK) is a leading global real estate Western Aqua Madhapur TableSpace 104,000
(Expansion)
services firm that delivers exceptional value for real estate occupiers
and owners. Cushman & Wakefield is among the largest real estate
services firms with approximately 51,000 employees in 400 offices
and 70 countries. In 2018, the firm had revenue of $8.2 billion across
SIGNIFICANT PROJECTS PLANNED & UNDER CONSTRUCTION
core services of property, facilities and project management, leasing,
capital markets, valuation and other services. To learn more, visit
www.cushmanwakefield.com or follow @CushWake on Twitter.
PROPERTY SUBMARKET MAJOR TENANT SF COMPLETION DATE
Salarpuria Sattva Knowledge city –
Madhapur JPMC 2.5 MSF Q2 2019
www.cushmanwakefield.com Parcel 4
Aurobindo Galaxy Madhapur NA 1.3 MSF Q4 2020
Copyright © 2019 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.