Net absorption up 14% in Hyderabad in 2016

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Hyderabad’s prominence as a market catapulted this year to the second position for the first time since 2010. Net absorption rose 14% to 6.3 msf, while supply rose more than two-fold to 5.6 msf during 2016.

Hyderabad is in the midst of frenzied activity from investors and businesses since last year (2016) resulting from the government’s proactive steps to create “Brand Hyderabad” through investor-friendly policies and improving infrastructure. The IT-BPM sector’s leasing remained buoyant in the city, pushing up the net absorption numbers.

Investors and occupiers are keenly watching the (Hyderabad) market, which will see continued demand. The first half of 2017 is likely to see slower growth in demand for office space due to cautious expansion strategies by corporates, lower GDP growth due to demonetisation and uncertainty in the global economy due to BREXIT and US political scenario, Anshul Jain, Managing Director, India, Cushman & Wakefield, said.

In 2016, Madhapur continued to be the preferred sub-market for occupiers, accounting for 60% of net absorption in the city. Madhapur also witnessed 4 msf of supply, over 70% of the 5.6 msf supply in the entire city. Despite high influx of supply, the sub-market is veering towards saturation with vacancy of only 3.2% at the end of December 2016.

According to Cushman & Wakefield , the total leasing activities that took place in 2016 across the top eight cities amounted to 42.3 msf, which was lower by 22% over the previous year (2015).

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