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| Sandip Patnaik, MD Hyderabad JLL |
Residential real estate ..!
JLL India, in its update, states there has been a gradual increase in residential demand & absorption.
Mr. Sandip Patnaik, MD Hyderabad of Jones Lang Lasalle India said, ''The market is still a long way from touching the 2007- 2008 levels. We definitely expect an increase in Private Equity (PE) investments into residential real estate projects in Hyderabad in 2012. Until now, institutional capital flows had been slow in Hyderabad when compared to some of the other Indian cities”
This was mainly due to high valuations in 2007-2008, the world financial crisis in 2008-2009 & the State-level political scenario leading to expressed institutional investment sentiment in 2010-11.
The real estate valuations are once again making sense now & developers as well as end users are back in action. The political scenario will take a turn for the favourable for PE investment in 2012 - 2013. The residential supply is likely to outstrip demand in the foreseeable future possibly impacting the pricing.
Commercial real estate ..!
The commercial real estate sector in Hyderabad has reacted very differently from the residential sector over the past few years. Hyderabad saw absorption of 44 lakh to 50 lakh sq. ft. year on year. This clearly indicates that corporate clients did not let the political scenario upset their expansion plans in Hyderabad.
Cognizant & Accenture have expanded their office bases over last 2 to 3 years. However, very few new companies have set up their base in Hyderabad over last couple of years. Notable exceptions would be JP Morgan & Facebook, along with a few others. In 2012, the lack of SEZ supply will result in Hyderabad city absorption being lower than in 2010 & 2011.
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