Hyderabad is surging ahead as economic powerhouse of India: Savills Report

HYDERABAD: Hyderabad is surging ahead as the economic powerhouse of India, according to The Sprint, released by Savills, a US-headquartered real estate services giant.

The report was released following a meeting between the company's leadership team and Minister KT Rama Rao on Sunday. 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.

Hyderabad has led the way in terms of office leasing activities since the establishment of Telangana. Residential real estate has also performed well, with the city recording the highest housing sales in 2022 in the past eight years.

In the retail sector, yearly supply addition grew for the first time since 2018, with approximately 1 million square feet of new infusion in 2022. As of December 2022, Hyderabad held approximately 8 percent of India's operational mall stock. Data centres, a rising sub-sector of real estate, have emerged as a popular asset class for investors. In 2022, Hyderabad accounted for around 26 percent of the 500 acres of data center-related land purchases in the country.

According to the report, Hyderabad's economic growth has been highly based on four important factors: policy push, infrastructure, inexpensive real estate, and human capital/job development.

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.

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:

"I am happy to have had the opportunity to visit Hyderabad," said Mark Ridley, Group and Global Chief Executive Officer of Savills. The city places a high emphasis on innovation, information technology, life sciences, and infrastructure, which is fueled 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", he added.

Telangana Minister for IT, Industries & Commerce, MA & UD, Telangana, KT Rama Rao said, "Hyderabad is now the most sought-after gateway city for global corporations cutting across sectors. It offers an unrivalled value proposition in terms of infrastructure, policy support, premium real estate, and ease of living. Most businesses want to grow their footprint by increasing their presence in Hyderabad. We remain committed to establishing a world-class and exceptional business hub for future generations. Telangana is at the forefront of identifying development sectors and developing policy frameworks to attract additional enterprises. This Savills research precisely identifies the economic drivers and developing areas that the Telangana administration is concentrating on."

"This is my first visit to Hyderabad and has indeed given me the opportunity to experience the scope and rate of growth that defines this city," said Christian F. Mancini, CEO, Asia Pacific, Savills. 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 city of the decade".

"During the previous two decades, we have witnessed Hyderabad take a quantum leap to become one of the top-ranked markets in a short span. The city has constantly invested in future ideas such as information technology, life sciences, logistics, warehousing, and other areas, demonstrating its ambition for sustainable and inclusive development", said Anurag Mathur, CEO of Savills India.