Hyderabad Realty Set For Revival; Brigade, Mantri Launched Projects Recently.
Source : The Economic Times, 27 Jan 2016
HYDERABAD: The Hyderabad real estate market, which has been in limbo for years mainly due to the Telangana statehood agitation, is beginning to see green shoots, thanks to renewed interest from realty players outside the city who find land here cheaper.
While Bengaluru-based realty players such as Brigade, Mantri, Embassy and Prestige are among those who either launched their projects recently or are firming up land deals, many other non-local realtors are in the process of doing so, says property consultants.
“The entry of outstation players into the Hyderabad real estate market, both for residential and commercial projects, is an indication of the improving market scenario here,” said Sandip Patnaik, Hyderabad managing director of property consultant Jones Lang LaSalle (JLL). Barring one or two non-local players, no new player entered the Hyderabad market owing to the sluggishness in 2009-14, he said.
A majority of the non-local property developers prefers to enter into joint development pacts with the land owners, while only a fourth goes for land purchases. Prestige, Mantri, Brigade and DLF are among the key players who entered the Hyderabad market through joint development agreements.
Prestige Constructions’ business head, Suresh Kumar, said: “Non-local developers always wanted to invest in the Hyderabad market because of its developed infrastructure, presence of big corporates and Fortune 500 companies and a vibrant social infrastructure, but years of political turmoil leading to sluggishness in the market restricted them.”
A 2014 report of Cushman & Wakefield said Hyderabad witnessed a 46% decline in new launches in 2014 as compared to 2013, primarily due to a large amount of existing unsold inventory in the city.
“The market is again picking up with launches by them (non-local developers),” said JLL’s Patnaik. Prestige launched two projects in 2015 and is looking at land for developing 5 million homes in five years, said Suresh Kumar.
While the Hyderabad market has largely been dominated by local players, the lull in major southern markets like Chennai and Bengaluru has now made it attractive for non-local players, said AS Sivaramakrishnan, CBRE’s residential services country head. “Hyderabad remained the only bright spot for developers (in South India) and given the low prices here, it turns a win-win for players,” he said.
Many of Hyderabad-headquartered realtors most of them with roots in Andhra Pradesh have either shelved investments in Hyderabad or began diversifying their portfolio by shifting incremental investments to AP, going by the shift in investors’ interest.
“High land cost and its availability in Hyderabad continue to be a cause of worry. While developers in other markets like Pune and Delhi get good returns, developers here struggle from it,” said Veerababu, managing director-Hyderabad at Cushman and Wakefield.
The residential market in Hyderabad has not yet picked up, while the commercial market is saturated and retail is lagging behind, said P Dasharath Reddy, president of the Telangana Real Estate Developers’ Association.