Hyderabad is surging as the economic powerhouse of India, says the latest report by global property brokerage firm Savills India.
The report titled Hyderabad: The Sprint highlights the economic growth of Hyderabad since the formation of a separate Telangana state and the key factors that have led to this growth.
While pointing out that the City of Nizam’s is contributing significantly to each real estate segment in the country, the report, which was released on February 26, 2023, states that the economic success story of Hyderabad has been highly based on the below four key factors: policy push, infrastructure development, affordability and human capital.
Hyderabad real estate: Leading the way
- City sees 2.3 msf of leasing activity from flexible spaces in the period 2020-22, 15% of the shared space demand in India.
- Registered the highest housing sales in 2022 in the last 8 years.
- Annual supply addition in retail increased for the first time since 2018, as 2022 witnessed around 1 msf of supply infusion.
- As of Dec 2022, Hyderabad had around 8% share in the operational mall stock of India.
- Of the 500 acre of data centre-related land transactions in 2022 in India, around 26% came from Hyderabad.
- By 2025, Hyderabad will have a 7-10% share (over 2.5 msf) in India’s data centre stock.
- In FY22, almost 1.5 lakhs employment opportunities were realised in the IT/ITeS sector, 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.
- A transit oriented development 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 efficiency of land utilisation.
- 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 $40-50 billion by 2030.
- Hyderabad’s EV ecosystem is likely to witness $3- 4 billion of investments, employing more than 1 lakh people by 2030.
- Around 150 animation, visual effects, gaming and comics companies provide direct employment to approximately 30,000 people. The sector can support 0.5-1.0 lakh people in the next 5 years.
- The maintenance, repair & overhaul industry within the aerospace segment in the country is likely to reach $2-3 billion in the next five years. Hyderabad is likely to play a prominent role in it.
What is behind this growth?
Policy measures like the Information Communication Technology Policy 2.0, the Telangana Electric Vehicle and Energy Storage Solution (ESS) Policy, the space-tech framework, the state-wide optical fibre network, the Growth in Dispersion (GRID) policy and the TS-ipass are credited with the city’s economic growth.
“Steady infrastructure creation and upgrades, including the Nehru Outer Ring Road, expansion of the metro rail and the implementation of a strategic road development plan have ensured excellent connectivity in and around the city, thereby enhancing core real estate potential. Other planned infrastructure developments include the regional ring road and the elevated bus rapid transport system,” says the report.
Comparative affordability has been a key factor, leading the growth, says the report, particularly in the commercial office market.
“Hyderabad stands to benefit most from sub-dollar office rentals over a long period of time… 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,” says the report.
The city’s human capital is the 4th biggest factor contributing to its phenomenal growth.
“People are particularly drawn in by the quality of life the city offers to working professionals and students alike,” it says.
Sectoral focus is the fifth growth drivers, says the report.
Mark Ridley, group & global CEO, Savills, said, “Hyderabad has an enormous focus on innovation, IT, life sciences, and infrastructure, driven by a talented workforce and a strong entrepreneurial spirit. Hyderabad has all the characteristics of a Megapolis in the making and the momentum is such, it’s unstoppable.”
“Hyderabad is a shining example of a powerful economic hub in the making, not only within India but globally. Hyderabad has emerged as the most promising and significant cities of the decade,” Christian F Mancini, CEO, Asia Pacific, Savills, said.
“Over the last two decades, we have seen Hyderabad take a quantum leap to become one of the top-ranked markets within a short period. The city has consistently invested in future propositions like IT, life sciences, logistics, warehousing, and other areas, reflecting its vision for sustainable and inclusive development,” said Anurag Mathur, CEO, Savills India.