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Hyderabad July – Dec 2014
Residential July – Dec 2014
Residential market continues to lose steam despite political scenario easing out
RESIDENTIAL
Hyderabad residential market launches, absorption and price trend
30% fall in H2 2014 vs. H2 2013 H2 2013 – 7,376 units H2 2014 – 5,151 units
7% fall in H2 2014 vs. H2 2013 H2 2013 – 8,419 units H2 2014 – 7,829 units
5.6% rise in price Y-O-Y in 2014
RESIDENTIAL
Residential Market in Hyderabad in Year 2014
Sales volume
fell by
18%
15,111 units sold vs. 18,428 units in 2013
New launches dropped
by 30%
13,050 units launched vs. 18,643 units in 2013
West Hyderabad accounts for the largest share of under-construction inventory
RESIDENTIAL
1,24
8 un
its
535
units
907
units
605
units
347
units
399
units
359
units
60
9 un
its
246
units
827
units
600
units
609
units
4,33
6 un
its
5,80
8 un
its
2,99
0 un
its
Micro-market-wise residential launches – Share in %
Share of West Hyderabad falls over the past 18 months
RESIDENTIAL
Micro-market-wise residential sales – Share in % 84
8 un
its
820
units
945
units
945
units
904
units
1,05
6 un
its
956
units
877
units
909
units
334
units
384
units
383
units
5,35
5 un
its
4,27
9 un
its
4,53
6 un
its
Current QTS at nearly 2.5 years indicates a fairly better residential market – Age of inventory as high as 3.5 years
RESIDENTIAL
Central Hyderabad remains healthiest in the city with West following close behind
RESIDENTIAL
4
6
8
10
12
14
16
18
20
0 5 10 15 20 25 30 35
Age
of u
nsol
d in
vent
ory
in q
uart
ers
QTS
HMR - Central
HMR - East
HMR - North
HMR - South
HMR - West
Size of the bubble indicates the quantum of unsold inventory Total Unsold Units 35,183
as on December 2014
RESIDENTIAL
Prices have grown by 5.6%; Cost pressures rule out possible corrections
Concluding Remarks
Change of guard at the state government does little to improve the residential market
Cash strapped developers put the brakes on launches while looking
to offload existing inventory West continues to see bulk of the market activity
RESIDENTIAL
Going forward
De-growth in launches and absorption likely to be stemmed to just 5% and 2% Y-O-Y respectively in H1 2015
Though we expect a fall Y-O-Y in H1 2015, the numbers will still be
better than H2 2014 Prices expected to grow at the same rate Y-O-Y in H1 2015 as in H2
2014
RESIDENTIAL
July – Dec 2014
Office
Vacancy levels drop to 17% - first time since 2012
OFFICE
Hyderabad office space stock and vacancy levels
Deloitte leasing deal leads the office market rebound - Absorption levels have shot up by 140% Y-O-Y
OFFICE
IT/ITeS share drops; other services sectors compensate the fall
y
OFFICE
SBD accounts for practically all the space absorbed during Jul – Dec 2014
y
OFFICE
56,7
00 s
q.ft.
8,50
0 sq
.ft.
645,
523
sq.ft
.
2,63
7,81
6 sq
.ft.
449,
532
sq.ft
.
113,
000
sq.ft
.
5,80
0 sq
.ft.
13,5
00 s
q.ft.
Post a 2 year stagnation, rentals have grown by 5% Y-O-Y - expected a similar pace in the next 6 months
OFFICE
y
Concluding Remarks
• Deloitte gives a new lease of life to Hyderabad office market • The SBD business district accounts for practically all the
space absorbed during H2 2014. • Receding share of the IT/ITeS sector has not affected overall
absorption volumes, as consulting, designing and media companies from the other services sector have been gaining a share in tandem
Going Forward
Change in political regime to get businesses back in the city
Increase in average deal sizes bodes well for the market and this phenomenon should sustain going forward as well
Absorption likely to be 3.3 mn.sq.ft. during Jan – Jun 2015; similar
to that of H1 2014
Weighted average rental to rise by a nominal 5%
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