Financial District Among Fastest-Growing Commercial Locations, Says Vestian
HYDERABAD: The Financial District in the west zone of Hyderabad is rapidly gaining recognition as one of the fastest-growing commercial locations in the region. This micro-market, strategically positioned on the Outer Ring Road (ORR), enjoys seamless connectivity to other parts of the city, making it a preferred choice for giant IT-ITeS companies from around the world.
With its proximity to the Rajiv Gandhi International Airport and the completion of the ORR service roads widening project, the area is poised for even greater success, said real estate solutions provider Vestian in its micro-market report on Financial District.
The Financial District has become one of the most active office markets in Hyderabad, following Madhapur and Gachibowli. The housing needs of employees working in this district are met by emerging residential localities such as Kokapet, Narsingi, and Manikonda.
Although the Financial District accounts for approximately 11% of Hyderabad's total office stock, it has faced challenges with occupancy levels due to limited connectivity and the availability of Grade-A office spaces in neighboring mature office markets like Gachibowli and Hitec City.
The demand slowdown during the pandemic led to a 38% decline in absorption in 2022 compared to 2019. However, there has been a positive shift recently, with Q1 2023 accounting for 80% of the total leased office space in the previous year. The share of the Financial District in the city's absorption reached its peak at 31% in Q1 2023, fueled by renewed tenant interest amidst the development of the upcoming airport express metro corridor.
It has witnessed a transition from flexible spaces to owned large office campuses, with the share of flexible spaces declining from 45% in 2019 to 6% in 2022. Competitive rentals have led several coworking players to relocate their operations to Hitec City and Gachibowli, the report said.
Financial District is poised for growth as offices reopen post-COVID-19, benefiting from the availability of Grade-A office spaces, a robust pipeline of upcoming branded office projects, and SEZ areas. However, government intervention is crucial to incentivize companies considering leasing office spaces in the SEZ area, thereby dispersing growth from Hitec City and Gachibowli to the commercial office areas in the Financial District.
The Financial District's office market is emerging as a prime destination and is poised to attract demand from nearby mature localities, it said.
