HYDERABAD: Heineken’s decision to establish a global capability center (GCC) in Hyderabad with an investment of nearly Rs 3,000 crore has proven challenging, as securing space in the bustling IT hub of HITEC City has become increasingly difficult.
Sources indicate that this trendy area, often compared to San Francisco’s Bay Area, is almost fully leased out in terms of Grade A office space.
Notable developments in HITEC City include Sattva Group’s Knowledge Park and Knowledge City, RMZ’s Nexity, Raheja Mindspace, and CapitaLand Park, along with individual projects by Auro Realty and My Home Group.
Recently, McDonald’s acquired approximately 200,000 sq ft in the area, while Eli Lilly secured a standalone property near IKEA, as available space in established parks is nearly exhausted.
“There is virtually no availability. No new space is expected in HITEC City before 2026, forcing GCCs to consider standalone options on the outskirts or in the Financial District (FD) and Gachibowli,” stated Sreekanth Reddy, managing director for Hyderabad at Cushman & Wakefield.
HITEC City constitutes about 55 million sq ft of Hyderabad’s total 75 million sq ft of Grade A office space.
“While some small inventory exists, most of the larger spaces are claimed due to high demand, as HITEC City has become the premier choice for GCCs in India,” noted Karan Chopra, chairman and co-CEO of Table Space.
This surge in demand has driven rental prices from previously sub-dollar levels to over Rs 100 per sq ft. “The rental increases are a direct result of this heightened absorption,” confirmed Shrinivas Rao, CEO of Vestian.
Vimal Nadar, national director and head of research at Colliers India, reported that HITEC City has accounted for 57% of Hyderabad’s office leasing in the past five years, with Grade A leasing increasing fivefold since 2020, largely due to the expansion of multinational corporations and tech giants.
Factors propelling this demand, according to Rao, include that out of every ten inquiries, four are focused on Hyderabad, underscoring its significance in the GCC landscape. The city benefits from superior infrastructure and reduced commute times compared to other locations.
The Metro Rail project has significantly enhanced HITEC City’s attractiveness to GCCs, as highlighted by Reddy.
Nadar corroborated that enhanced connectivity via the Raidurg-Nagole Metro Line 3 has bolstered HITEC City’s commercial allure. Real estate experts also noted that excellent airport connections and robust social infrastructure contribute to its appeal.
Nevertheless, this has led to a curious situation where market studies show Hyderabad with the highest amount of vacant Grade A space among major Indian cities. “While there is a considerable amount of Grade A space in Hyderabad, much of it is located in FD and Gachibowli,” explained Rao.
