HYDERABAD REAL ESTATE OVERVIEW MAY 2016

Transcription

HYDERABAD
REAL ESTATE OVERVIEW
MAY 2016
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TABLE OF CONTENTS
2
1.
EXECUTIVE SUMMARY
3
2.
CITY FACT FILE
5
3.
MAJOR INFRASTRUCTURE DEVELOPMENTS
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4.
10
5.
WEST HYDERABAD METROPOLITAN REGION
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6.
NORTH-WEST HYDERABAD METROPOLITAN REGION
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7.
NORTH HYDERABAD METROPOLITAN REGION
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8.
EAST HYDERABAD METROPOLITAN REGION
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9.
CENTRAL HYDERABAD METROPOLITAN REGION
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10.
SOUTH HYDERABAD METROPOLITAN REGION
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11.
LOCATION ATTRACTIVENESS INDEX
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12.
DISCLAIMER
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EXECUTIVE SUMMARY
The ‘Hyderabad Residential Real Estate Overview – May 2016’ provides a comprehensive insight
into the key trends that have emerged in residential markets of Hyderabad. The report is an
outcome of a rigorous survey conducted by ICICI Home Finance Company across different regions
of Hyderabad. Some of the key findings are as follows:
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
Political stability and government initiatives have infused a positive sentiment into the
Hyderabad real estate market. Residential markets across Hyderabad witnessed a gradual
phase of recovery after a long drawn political unrest which culminated into the creation of
Telangana state with Hyderabad as its capital. Weak sentiments had dented the markets for
over three years till the bifurcation of the state, leading to an over-supply situation across the
city as buyers stayed away during this time of uncertainty.

Hyderabad residential real estate is driven by a mix of both investors and end users.
However, end-users comprise of the majority share of the total pie of buyers. With the
increase in off-take of the office supply space, organized players have been firming up the
residential supply in Hyderabad market.

There has been a marked preference for apartments in multi-storeyed buildings in a variety
of price ranges depending on the purchasing power of the buyer. Many areas on the west of
Hyderabad like Gachibowli, HITEC City, Kukatpally, Madhapur and Chandanagar have
witnessed increased demand due to their proximity to the IT hub, along with other factors
such as excellent connectivity, developed infrastructure, and availability of good residential
development in Hyderabad at affordable prices in these locations.

The development of Metro with its proposed commencement in a year’s time and other
infrastructure projects such as radial roads, inner ring road, outer ring road and availability of
Grade-A offices at comparatively lower prices than those in Bangalore and Pune is a
benefitting factor for residential real estate in Hyderabad.

Since Hyderabad has a sizable population of migrants, particularly IT/ITes professionals, the
rental housing market is very prominent in the city.

Our survey of the market indicates a stable off-take in residential stock during CY2015, with
ready-to-move inventory witnessing buyers. There has been a rise in consumption of
apartments in multi-storeyed buildings by buyers moving into Hyderabad from other cities
and is expected to add impetus to the real estate market of Hyderabad.

Our analysis indicates that maximum supply and absorption in Hyderabad residential market
falls in the price bracket of INR 2,000 per sq. ft. to 3,000 per sq. ft. primarily comprising of
units developed by local developers. The most active configuration in terms of both new
launches and absorption for residential units has been the 3-BHK segment.

Gachibowli, Kukatpally, HITEC City and Madhapur have been witnessing a lot of activity with
majority of new project launches lying in the price range of INR 40 to 60 lakhs.
EXECUTIVE SUMMARY
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
The report has been divided into following six distinct regions – North, East, West, South,
Central and North-West, based on the geographical location and real-estate activity. We have
analyzed the key trends in the markets and have provided a perspective of the prevailing
market scenario.

Further, the report tracks the city absorption and supply trends along with property price
trends for each of these micro-markets through weighted average prices of the available
supply of units.

The report concludes with a Location Attractiveness Index, which grades each micro-market
on the basis of certain key parameters such as the current state of Infrastructure, Residential
Cost, Proximity to Retail Establishments, Future Employment Generation Capacity, etc.
CITY FACT FILE
Hyderabad is the capital of Telangana and one of the most populous cities of India. Telangana
acquired its identity as the Telugu-speaking region of the princely state of Hyderabad, ruled by the
Nizam of Hyderabad, joining the Union of India in 1948. In 1956, Hyderabad state was dissolved as
part of the linguistic re-organisation of the states and Telangana was merged with former Andhra
State to form Andhra Pradesh.
However, after a long-drawn agitation for bifurcation of the states, the Andhra Pradesh
Reorganisation Act, 2014 (an Act of the Indian Parliament) bifurcated the state of Andhra Pradesh
into Telangana and the residuary Andhra Pradesh state. The Act defined the boundaries of the two
states, determined how the assets and liabilities were to be divided, and laid out the status of
Hyderabad as the permanent capital of Telangana and temporary capital of the new Andhra
Pradesh state. Hyderabad will continue to serve as the joint capital city for Andhra Pradesh and
Telangana for a period of not more than ten years.
An earlier version of the bill, Andhra Pradesh Reorganisation Act, 2013, was rejected by the Andhra
Pradesh Legislative Assembly on 30th January 2014. The 2014 bill was passed in the Lok Sabha on
18th February 2014 and in the Rajya Sabha on 20th February 2014. The bill was attested by the
President of India, Pranab Mukherjee on 1st March 2014 and published in the official Gazette which
was followed by the creation of the new states on 2nd June 2014.
Hyderabad’s urban agglomeration, known as Hyderabad Metropolitan Region (HMR), is spread over
7,100 sq. km. The population of the city is 6.8 million and that of its metropolitan area is 7.75 million
making it the fourth most populous city and sixth most populous urban agglomeration in India.
Hyderabad city is located on the banks of Musi River on the Deccan Plateau. At an average altitude
of 542 meters, most parts of Hyderabad are situated on hilly terrain and are surrounded by artificial
lakes including Hussain Sagar, which lies towards the north of the city center.
History
Hyderabad was established in 1591 by Muhammad Quli Qutb Shah. It remained under the rule of
Qutb Shahi dynasty until 1687, when Mughal emperor Aurangzeb conquered the region and the city
became part of the Deccan province of the Mughal Empire. In 1724 Asif Jah I, a Mughal viceroy,
declared his sovereignty and formed Asif Jahi dynasty, also known as Nizams of Hyderabad.
Nizams ruled the princely state of Hyderabad for more than two centuries, in a subsidiary alliance
with the British Raj. The city remained the princely state's capital from 1769 to 1948, when the
Nizam signed an Instrument of Accession with the Indian Union at the conclusion of Operation Polo.
The 1956 States Reorganisation Act created the modern state of Andhra Pradesh, with Hyderabad
as its capital.
Administrative Framework
The Hyderabad Metropolitan Development Authority (HMDA) was formed by an Act of Andhra
Pradesh Legislature in the year 2008, with an area of 7,100 sq. km. under its purview. It is one of the
largest urban development areas in India. HMDA was formed by merging the following erstwhile
entities: Hyderabad Urban Development Authority (HUDA), Hyderabad Airport Development
Authority (HADA), Cyber Abad Development Authority (CDA) and Buddha Poornima Project
Authority (BPPA).
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CITY FACT FILE
HMDA was set up for the purposes of planning, co-ordination, supervising, promoting and securing
planned development of Hyderabad Metropolitan Region. It coordinates the development activities
of the municipal corporations, municipalities and other local authorities like Hyderabad Metropolitan
Water Supply & Sewerage Board, Andhra Pradesh Transmission Corporation, Andhra Pradesh
Industrial Infrastructure Corporation, Andhra Pradesh State Road Transport Corporation, and other
such bodies.
HMDA also maintains and manages the Hyderabad Management Development Fund, allocating
finances based on the plans and programs of local bodies to undertake development of amenities
and infrastructure facilities.
Census 2011 Key Highlights
As per provisional reports of Census India, population of Hyderabad in 2011 was 6,809,970. This
includes males and females as 3,500,802 and 3,309,168 respectively. Although Hyderabad city has
a population of 6,809,970; its urban/ metropolitan population is 7,749,334.
Total Population in Hyderabad
7,749,334
Number of Males
3,985,240
Number of Females
3,764,094
Average literacy rate
82.92 %
Male literacy rate
86.14 %
Female literacy rate
79.51 %
Source: Census 2011
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Outer Ring Road (ORR)
Nehru Outer Ring Road or ORR is a 158 kilometer, 8-lane ring road expressway encircling the city of
Hyderabad. It is being built by HMDA at an estimated cost of INR 6,696 crores with an assistance of
INR 3,123 crores from Japan International Cooperation Agency. A large part, 124 kms of the 158
kms was opened in December 2012 covering the areas of HITEC City, Financial District, Hyderabad
International Airport etc. It provides an easy connectivity between NH 9, NH 7, NH 4 and state
highways leading to Vikarabad, Srisailam and Nagarjunasagar.
The road aims to improve connectivity and decongest traffic flow on existing major arterial roads
between the outer suburbs of Greater Hyderabad. The expressway is fenced and 33 radial roads
connect it with the Inner Ring Road, and the upcoming Regional Ring Road. The current status of
ORR is as given below:
Completed segments

Gachibowli to Shamshabad (22 km) was completed in November 2008

Shamshabad to Pedda Amberpet (38 km) was completed in July 2010

Narsingi to Patancheru (23.7 km) was completed in August 2011

Patancheru - Gowdavalli, and Kandlakoya - Shamirpet (38 km) was completed in December
2012

Pedda Amberpet - Ghatkesar (14 km) was completed in March 2015
Under Construction

Ghatkesar to Keesara (11 km) (Delayed due to Rail Over Bridge construction)

Keesara to Shamirpet (10.5 km)
Source: HMDA official website, media sources
Puppalguda and Narsingi micro-markets are expected to witness a significant positive impact in the
residential real estate landscape as both these micro-markets run on both sides of ORR and lie in
close proximity to the IT Hub. Kompally and Medchal will also be positively impacted by ORR as the
connectivity of these areas with central Hyderabad will improve.
Inner Ring Road (IRR)
The Inner Ring Road or IRR is a 50 kilometer city arterial road in Hyderabad, Telangana, India with
the objective to de-congest city roads and give way for trucks and other commercial vehicles.
IRR's master plan called as Intelligent Transport System was done by Nippon Koei of Japan. The
project, which includes the Outer Ring Road, is being implemented with assistance from Japanese
International Cooperation Agency (JICA).
The road passes through Mehdipatnam including Masab Tank, Banjara Hills, Punjagutta, Begumpet,
Mettuguda, Tarnaka, Nagole, L B Nagar, Attapur, Rethi Bowli etc. The road joins P V Narsimha Rao
Elevated Expressway at Aramgarh. Thus, these areas will be positively affected in terms of real
estate development due to the enhanced connectivity.
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Multi-Modal Transport System (MMTS)
The Multi-Modal Transport System (MMTS) is a suburban rail system in Hyderabad which is a joint
partnership of Government of Telangana and South Central Railway. It is operated by the South
Central Railway. This project is expected to complement and support the fast growth of the city.
The first phase was completed at a cost of INR 178 crore (USD 26 million), and started its operations
on August 9, 2003. It spans a distance of 43 km, covering 27 stations and connects Secunderabad,
Nampally, Dabirpura, Malakpet, Falaknuma, HITEC city and Lingampally. The Diesel Multiple Units
(green local trains) complement the MMTS (white-blue trains) along few other routes like Bolarum
(up to Manoharabad), Umdanagar etc.
The second phase work on Multi Modal Transportation System (MMTS) is progressing
simultaneously in all five stretches of Greater Hyderabad. This second phase covers a length of 103
km at an estimated cost of INR 819 crore. Eleven of the 16 major bridges, electrification of the
existing Secunderabad-Bolarum double line and track doubling of Bolarum-Medchal stretch are
under progress in the MMTS Phase-II project. Construction is also underway on FalaknumaUmdanagar section.
Multi-level flyovers
As a part of the Telangana government’s initiative for redesigning the entire road network in
Hyderabad, Hyderabad is estimated to witness the construction of 20 multi-level flyovers very soon.
The Municipal Administration and Urban Development (MA&UD) Department has approved
construction of these flyovers and development of junctions as part of the Strategic Road
Development Plan (SRDP). SRDP was prepared to meet the growing requirements of the city, which
has a population of over one crore. Under the plan, multi-level flyovers, skywalks and signal-less
junctions will be developed at 54 places in the city.
The Greater Hyderabad Municipal Corporation (GHMC) will soon commence work on construction
of 20 multi-level flyovers and development of junctions to ease traffic congestion in the city. These
will be taken up under the design-build-maintain and transfer mode.
Consolidating the Water Infrastructure
Telangana’s flagship developmental programs – ‘Mission Kakatiya’ (reviving the water bodies) and
‘Mission Bhagiratha’ (also known as Telangana Water Grid Scheme, for enhancing the water
supply), are aimed at consolidating the water infrastructure in the state. It is estimated that INR
15,000 crore will be required for Mission Kakatiya to revive the water bodies and INR 28,000 crore
for Mission Bhagiratha which is envisaged to supply drinking water to all households by 2019.
Mission Bhagiratha will be providing water from Krishna and Godavari to the towns and villages of
Telangana and reduce water supply woes. Nizampet, Kondapur, Narsingi and Kukatpally are
expected to witness a positive impact as a consequence of this improved water supply since a
significant number of residential projects are coming up in these micro-markets.
Hyderabad Metro
Hyderabad Metro Rail (HMR) is a rapid transit system, currently under construction, for the city of
Hyderabad. It is being implemented entirely on public-private partnership (PPP) basis, with the state
government holding a minority equity stake.
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Phase I of the project includes 3 lines covering a distance of around 71 km. The metro rail stretches
between Nagole and Secunderabad covering a stretch of 11 km.
It is planned to construct 83 km of metro lines under the second phase of the Hyderabad Metro rail
project. The five proposed corridors announced for the second phase are:
1. LB Nagar – Hayathnagar (7km)
2. Miyapur – BHEL – Patancheru (13km)
3. Nagole – LB Nagar – Falaknuma – Shamshabad Airport (28km)
4. Raidurg – Gachibowli – Shamshabad Airport (28km)
5. Tamaka – ECIL (7km)
Source: www.hmr.gov.in (Hyderabad Metro Rail official website)
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A. Market Summary
Residential markets across Hyderabad witnessed a gradual phase of recovery after a long drawn
political unrest which culminated with the creation of Telangana state with Hyderabad as its capital
on 2nd June, 2014. Weak sentiments had dented the markets for over three years till the bifurcation
of the state, leading to an over-supply situation across the region. Our survey of the markets
indicates a stable off-take in residential stock during CY2015, with ready-to-move inventory finding
takers. New launches by prominent developers along the IT/ITeS corridor indicate a cautious
optimism prevailing in the markets. However, new launches across the micro-markets decreased by
about 10% in CY2015 Y-o-Y indicating a cautious stance being maintained by the developers. The
new government is trying to instill a positive sentiment in the market with a slew of infrastructure
initiatives and policies. It is expected that the market will remain stable with a positive bias, with
existing stock witnessing a stable off-take across the micro-markets.
The total absorption of residential units remained stable Q-o-Q in CY2014 and CY2015.
Over a 5-year horizon, Hyderabad market is expected to consolidate with a nominal appreciation of
5% to 7% Y-o-Y, backed by its fundamental strengths such as affordability, good infrastructure and
presence of IT/ITeS sector, which will propel growth of the end-user segment in the city.
New launches have been primarily concentrated in North-West Hyderabad in areas such as
Gachibowli, Lingampally, Telapur, Kondapur etc.
The Hyderabad market has a large presence of independent local developers which is now
expected to change with the foray of more number of well-known developers such as Purvankara,
Godrej, Tata, Mantri, Mahindra Lifespace, SMR, Aditya, Incor, Lodha, Pacifica, Prestige etc.
providing gated community amenities in contrast to independent units built by local developers,
thus indicating a strong future potential.
B. Supply & Absorption Trends
Source: PropEquity
Inventory Overhang (months) = Unsold Inventory at the end of a quarter / absorption in that quarter
*Quarters as per Calendar Year
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1) The total absorption of residential units has remained stable Q-o-Q in CY2014 and CY2015
2) The inventory overhang has also remained stable at about 10 months which is much lower in
comparison to other markets owing, to the cautious stance of developers due to political
uncertainty that plagued the Hyderabad market.
C. Weighted Average Price Trends
Source: PropEquity
Note: Graph represents weighted average price of residential units available in the primary market.
1) The Q-o-Q average capital values of available units (weighted average price of unsold inventory and
new launches in that quarter) has shown a continuous uptrend after Q2-CY2014, indicating a robust
market.
2) The average new launch price remained stable and hovered in the range of INR 3500 - 4000 per sq.
ft., with a majority of them taking place in North-West Hyderabad.
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D. Price-based trends
Source: PropEquity
The above graph indicates that the maximum residential inventory and absorption in Hyderabad
region lies in the range of INR 2,000 – 3,000 per sq. ft. in CY2015, primarily dominated by units
launched by local developers. However, the maximum number of new launches have been in the
price range of 3000 - 4000 sq. ft. in CY2015 primarily dominated by organized players.
E. Configuration-based trends
Source: PropEquity
The above graph indicates that the maximum residential units in Hyderabad region in terms of new
launches, absorption and unsold inventory are skewed towards the 3-BHK configuration making it
the most preferred configuration for the buyers of Hyderabad.
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Short Term
10-12 months
Stagnation in capital value.
Long Term
50-60 months
5 - 7% Y-o-Y appreciation in capital value with an
upward bias on a conservative note.
The realty markets in Hyderabad which took a strong beating due to prolonged uncertainty over the
state bifurcation issue during 2010-2014, is today in a gradual phase of recovery. The period saw
buyers holding back their buying plans and remained on the sidelines due to lack of clarity. Weak
sentiments dented the markets for over three years and to kickstart demand during the lull phase
(2010-14), developers offered discounts on unsold units, and others postponed launches as the
market price was not attractive.
Our survey of the market indicates a stable off-take in residential stock during CY 2015, with readyto-move inventory witnessing buyers. New launches by prominent developers in North-West
Hyderabad have received a good response, indicating a cautious optimism prevailing in the
markets. It is expected that the market will remain stable, with existing stock witnessing an
improved off-take across micro-markets as compared to previous years.
Over a 5-year horizon, markets are expected to consolidate with a nominal appreciation of 5% - 7%
Y-o-Y, backed by its fundamental strengths such as affordability, good infrastructure and presence
of IT/ITeS sector, which will propel the growth of end-user buying in the city. Also driving the
positive sentiment among developers is the upcoming launch of the metro rail project, and the
political stability post the bifurcation. The buoyant office market activity has also helped regain the
market momentum.
Affordable Real estate Prices compared to Other Major Cities
Residential real estate prices in Hyderabad are yet to regain their peak values. It is currently in a
consolidation phase, with properties available at attractive valuations. Buyers are increasingly
focusing on acquiring properties in the western part of the city (in the proximity of financial district
and the IT Hub).
It is expected that demand will be higher in the INR 3,000 - 4,000 per sq. ft. segment as majority of
them lie along the metro rail corridor and enquiries have been significantly higher for such
locations.
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MAJOR LOCATIONS IN HYDERABAD
We have classified the real estate space in Hyderabad Metropolitan Region (HMR) into six distinct
zones based on the basis of location and real estate activity: West, North, North-West, East, Central
and South.
Central HMR:
North HMR:
East HMR:
West HMR:
South HMR:
North-West HMR:
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Begumpet, Banjara Hills, Jubilee Hills, Panjagutta, Somajiguda
Kompally, Marredpally, Bolarum
Uppal, Malkajgiri, L.B. Nagar
Gachibowli, Kompally, Medchal, Alwal
Rajendra Nagar, Shamshabad
Kukatpally, Madhapur, HITEC City, Kondapur
Major Locations: Gachibowli, Nanakramguda, Narsingi, Manikonda, Khajaguda, Kismatpur,
Hyderguda, Gopanpalli, Tellapur, Nallagandla, Kokapet, Gandipet.
Key Highlights:

Gachibowli is witnessing development of projects in the price-band of INR 4,000 per sq. ft. to
INR 5,000 per sq. ft., depending on location, developer and specifications. Demand in this region
is end user-driven, majority of which caters to IT/ITeS employees. It is expected that this micromarket will firm up in the coming quarters because of its proximity to HITEC City, Kondapur,
Manikonda, Chandanagar, among other areas falling under the western IT belt which are close
to the upcoming office supply. It has a high supply of under-construction projects and primarily
offers residential apartments. The saturation of residential areas in Central Hyderabad has
encouraged real estate development towards the west of the city. Ample social infrastructure in
terms of organised retail and multiple entertainment options have made this area one of the
most desirable locations in Hyderabad.

The region surrounding Nanakramguda is witnessing development in mid-segment residential
units. Projects are in the price-band of INR 3,500 per sq. ft. to INR 4,500 per sq. ft., depending on
location, developer and specifications. It is expected that there will be a gradual absorption of
inventory in projects nearing completion due to an increase in demand from the expanding IT
corridor in HITEC City and Financial District in Gachibowli.

Narsingi is emerging as an alternate residential destination along the western corridor. Its
proximity to ORR and IT/ITeS hub has led to a spurt of residential development in these
locations. Mid-segment properties at Narsingi are in the price-band of INR 3,000 per sq. ft. to
INR 4,000 per sq. ft.

The micro-market of Manikonda is witnessing development of integrated townships. A rapidly
growing commercial-cum-residential area, it shares neighborhood with Gachibowli, Shaikpet,
Jubilee Hills and Kondapur. One of the major advantages of Manikonda is its connectivity via
Outer Ring Road and Old Mumbai Highway; the former connects it to the Airport, the latter
connects it to IT hubs. Manikonda is witnessing development of mid-segment properties in the
price range of INR 3,000 per sq. ft. to INR 3,700 per sq. ft., depending on location, developer and
specifications. A gradual off-take of existing stock is expected in coming months due to its
relative affordability, thus emerging as an alternative rental destination.

Tellapur is witnessing development of mid-segment and villa projects. Sale of mid-segment
projects is expected to remain sluggish due to presence of sufficient supply in surrounding
micro-markets, closer to the IT/ITeS hub of Gachibowli. Villa projects in this micro-market are
expected to witness a relatively better off-take with increasing influx of people into Hyderabad
because of its positive future growth potential and its proximity to Gachibowli.

Kokapet and Gandipet are predominantly witnessing development of gated communities and
villa projects. With an increase in residential demand due to the increasing office supply around
these micro-markets coupled with good connectivity to other parts of Hyderabad (through ORR),
these micro-markets are expected to witness stability in terms of demand.

Some of the major developers in this region are Aditya, Aparna, Incor, Lodha, Mahindra
Lifespace, Manjira, Mantri, Pacifica, Prestige and SMR.
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Growth Stimulators:




The high-growth IT Corridor in HITEC City and the Financial District in Gachibowli will be major
drivers in boosting demand for residential units in West Hyderabad. The presence of a number
of higher educational institutes such as Indian Business School and University of Hyderabad and
major multinational corporations such as Franklin Templeton have led to an increase in demand
for this region. This region accounts for majority of the total units which are under construction
currently.
The saturation of residential areas in Central Hyderabad has encouraged real estate
development towards the west of the city.
Ample social infrastructure in terms of organised retail and multiple entertainment options have
made this zone a more preferred destination.
Demand in this zone is primarily end user-driven, majority of which will cater to IT/ITeS
employees.
Source: PropEquity
Residential Property Rates in Prime Residential Markets of West Hyderabad Metropolitan Region**
Location
Average Capital Values
Rentals for 2 BHK
(INR/sft.)
( INR/month )
Gachibowli
4,000-5,000
14,000-18,000
Nanakramguda
3,500-4,500
12,000-14,000
Kokapet
3,000-4,250
10,000-12,000
Narsingi
3,000-4,000
8,000-10,000
Manikonda
3,000- 3,700
8,000-10,000
Tellapur
2,500-3,500
8,000-10,000
**Indicative mid-market segment
Source: ICICI Property Services Group
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Major Locations: Kukatpally, Hydernagar, Madhapur, HITEC City, Kondapur, Chandanagar, Miyapur,
Nizampet
Key Highlights:

The IT/ITeS hub of Madhapur, HITEC City and surrounding areas have emerged as a prime
realty market due to the presence of SEZs, Grade-A commercial spaces and organized retail
developments. The region is witnessing development of projects in the mid-segment priced
between INR 4,500 per sq. ft. to INR 6,500 per sq. ft. It is expected that this micro-market will
firm up over a twelve-month horizon due to spill-over demand from HITEC City and Gachibowli
micro-markets.

Kukatpally has evolved into an attractive realty market, due to the presence of landmark
residential projects, commercial facilities and organised retail developments. The Mumbai
Highway and the Jawaharlal Nehru Technological University (JNTU) Road connects Kukatpally
to rest of the city. Its proximity to the MMTS station and upcoming Metrorail network will
provide further impetus to the growth of this micro-market. This area also enjoys bus and rail
connectivity through TSRTC and HITEC City MMTS station. Proximity to HITEC City and
Madhapur has spurred real estate growth in the area.

Prominent developers have forayed into the Chandanagar market with projects in the midsegment and is primarily a residential zone. The occupants of this micro-market are primarily IT
employees, government employees working in BHEL and ICRISAT and people employed in
nearby industries located in Patancheru. These projects are priced at approximately INR 3,300
per sq. ft. to INR 4,500 per sq. ft. This market is expected to remain stable in the coming
quarters due to its relative affordability and good connectivity by both road and metro.

The Kondapur market largely houses standalone projects by local developers, provided with
basic amenities. These projects are priced at approximately INR 3,000 per sq. ft. to INR 4,500 per
sq. ft. and are expected to hold their levels over the next twelve months with a stable demand
from the IT workforce employed in the surrounding IT Hubs because of ease of access coupled
with availability of affordable options.

The region surrounding JNTU and the Malaysian Township are witnessing development of
projects in the mid-segment and premium segment. Sales of projects in the mid-segment have
been relatively steady, while off-take in the premium segment has witnessed a decline during
the last few quarters.

Some of the major developers in this region are Aparna, DSR Group, Lodha, Manjira, and
Prestige.
Growth Stimulators:

The Miyapur-SR Nagar stretch of Metro Rail which is nearly a 12-km stretch will have a
significant impact on the connectivity of this region as the Metro passes through this corridor.

Apart from metro connectivity, the MMTS corridor from Lingampally to Begumpet also provides
an alternative mode of transport for moving towards the east and south of Hyderabad.

The Mumbai Highway (NH-9) is an arterial road that connects the northwest and southeast
locations to central of Hyderabad.
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
This zone is well-connected to all other parts of the city through well-planned roads.

Close proximity to the IT Corridor in HITEC City and the Financial District in Gachibowli will be
major drivers in boosting demand.
Source: PropEquity
Residential Property Rates in Prime Residential Markets of North-West Hyderabad Metropolitan
Region**
Location
Madhapur
Kukatpally
Chandanagar
Miyapur
Kondapur
Nizampet
18
(INR/sft.)
4,500-6,500
4,000-5,000
3,300-4,500
3,000-4,500
3,000-4,500
1,800-2,800
Rentals for 2 BHK
(INR/month)
14,000-18,000
12,000-14,000
8,000-12,000
8,000-12,000
10,000-12,000
8,000-10,000
Major Locations: Kompally, Alwal, Sainikpuri, A.S. Rao Nagar, Bolarum, Marredpalli, Himayath
Nagar
Key Highlights:

Marredpalli has an inherent presence of the end-user segment due to its proximity to the CBD
and existing trader community coupled with limited upcoming supply in surrounding areas. This
micro-market is a premium locality. There is no significant availability of land but standalone
apartments are coming up through redevelopment. This region enjoys a strategic location
situated near the Secunderabad station and also ample social infrastructure in terms of schools,
hospitals etc.

A.S. Rao Nagar, in close proximity to Sainikpuri, is witnessing development of affordable
housing and primarily has the presence of local developers. Projects in affordable segment are
priced at approximately INR 3,000 per sq. ft. to INR 3,500 per sq. ft. This is a developed micromarket with low number of new launches.

Kompally is witnessing development of projects which are primarily expected to cater to the
population working in pharmaceutical companies present in Jeedimetla. It is expected that this
area will firm up over the next twelve months due to good social infrastructure, educational
institutes and industries.

Some of the major developers in this region are Aparna, Janpriya, Modi Builders and NCL
Homes.
Growth Stimulators:

National Highway 7 passes through this region, crossing the areas of Medchal, Kompally,
Secunderabad, and Shivarampally. It is an arterial road that connects this region with locations
in southern and central Hyderabad.

Demand for industrial and warehouse development along with the region’s proximity to
cantonment area will be driving factors for the real estate activity in this region.
Source: PropEquity
19
Residential Property Rates in Prime Residential Markets of North Hyderabad Metropolitan Region**
Location
Marredpalli
Sainikpuri
Alwal
Kompally
Cyber Towers, Hyderabad
20
(INR/sft.)
4,500-5,000
3,000-3,500
2,500-3,000
2,200-2,800
Rentals for 2 BHK
( INR/month )
12,000-14,000
8,000-10,000
8,000-10,000
8,000-10,000
EAST HYDERABAD METROPOLITAN REGION
Major Locations: Tarnaka, Malkajgiri, Uppal, Bod Uppal, Pocharam, Ghatkesar and L. B. Nagar.
Key Highlights:

The region of Tarnaka houses government establishments, public-sector units and the campus
of Osmania University. The MMTS corridor will pass through this region enhancing its
connectivity with other parts of Hyderabad.

Uppal / Bod Uppal is primarily driven by the unorganised sector. Independent houses built on
plots of approximately 100 sq. yards to 250 sq. yards are sold at around INR 25 lac per unit to
INR 45 lac per unit.

The micro-market of Pocharam is witnessing development of affordable housing and budget
villas. Affordable housing projects are in the price-band of INR 1,800 per sq. ft. to INR 2,200 per
sq. ft. Sales in this market has been sluggish and this trend is expected to continue over the
next twelve-month horizon. The Infosys campus in the region has influenced some off-take in
housing stocks. The market may witness a gradual evolution with further development of
IT/ITeS facilities after the present IT Hubs reach saturation in terms of supply.

Some of the major developers in this region are Modi Builders and SMR.
Growth Stimulators:
The micro-markets of Uppal and L.B. Nagar are expected to see significant improvement in
terms of connectivity through the Metro. The 26.5 km east-west line will connect the eastern
region to HITEC City in the West. Hyderabad Inner Ring Road also passes through these two
micro-markets which will further improve its accessibility and connectivity to other areas of
Hyderabad.

The Warangal Highway (NH-163) connects the eastern locations to Central Hyderabad and will
be a driving factor for residential developments in this region.

The under construction Phase-II of ORR will improve traffic situation and connectivity in
eastern zone.

Source: PropEquity
Residential Property Rates in Prime Residential Markets of East Hyderabad Metropolitan Region**
Location
Tarnaka
Uppal
Pocharam
21
(INR/sft.)
4,000-4,500
2,500-3,000
1,800-2,200
Rentals for 2 BHK
( INR/month )
12,000-14,000
7,000-9,000
4,000-6,000
Major Locations: Char Minar, Jubilee Hills, Banjara Hills, Kavuri Hills, Punjagutta, Begumpet,
Somajiguda, Necklace Road, Mehdipatnam and Ameerpet.
Key Highlights:

Jubilee Hills and Banjara Hills are the most sought after locations in Hyderabad realty market.
There remains an inherent demand for independent bungalows in these areas. High-rise
apartments are being developed on smaller land parcels priced between approximately INR
6,500 per sq. ft. to INR 12,000 per sq. ft., depending on location, developer and specifications.

Gandhinagar is one of the posh residential localities and has the presence of apartments built
by local developers in addition to independent residential bungalows. Also known as RTC
Cross Roads, this micro-market has the presence of a good number of entertainment options
primarily in the form of movie theaters and famous restaurants. It lies near Tang Bund road
which is an arterial road connecting the twin cities of Hyderabad and Secunderabad. The
business class has a significant presence in this region.

Begumpet is witnessing development of premium projects in the price-band of INR 4,500 per
sq. ft. to INR 6,500 per sq. ft. The real estate activity in this micro-market is expected to remain
stable over a twelve month horizon being a major commercial center of Hyderabad. With many
private and government offices present in Begumpet, in addition to the relatively affordable
housing compared to other locations of Central Hyderabad, this micro-market is one of the
preferred residential destinations.

Ameerpet micro-market is situated along NH-9. It is known for being the hub of software
training institutes in Hyderabad. This micro-market offers a mix of commercial and residential
establishments. Certain IT companies, retail and textile stores and other commercial
businesses have their presence in this market. Average capital values in the area range from
INR 4000 per sq. ft. to INR 6000 per sq. ft., while average rental values vary from INR 12,000
per month to INR 14,000 per month (for a 2BHK). It is accessible via Begumpet Road and Inner
Ring Road.

Some of the major developers in this region are Ashoka, Janapriya, Lumbini Constructions and
Salarpuria Sattva Group.
Growth Stimulators:

Excellent connectivity with various parts of the city, good physical and social infrastructure,
hotels, schools and the presence of organised retail like City Center mall and GVK mall have
ensured that this zone commands the highest real estate prices in the city.

The oldest and most developed part of the city, with corporate offices located in the Central
Business District (CBD) areas of Begumpet, Punjagutta, Banjara Hills, Jubilee Hills and others
has led to a stable demand for residential real estate in this zone which is expected to drive its
real estate dynamics in the positive direction in future.

The region enjoys connectivity with Mumbai Highway (NH-9) that connects the northwest and
southeast locations to Central Hyderabad and NH-7 connects this region with locations in north
and south of Hyderabad.
22
Source: PropEquity
Residential Property Rates in Prime Residential Markets of Central Hyderabad Metropolitan
Region**
Location
Jubilee Hills
Banjara Hills
Begumpet
Ameerpet
23
(INR/sft.)
6,500-12,000
6,500-12,000
4,500-6,500
4,000-6,000
Rentals for 2 BHK
( INR/month )
20,000-25,000
20,000-25,000
14,000-16,000
12,000-14,000
SOUTH HYDERABAD METROPOLITAN REGION
Major Locations: Shamshabad, Shadnagar, Balapur and Rajendra Nagar.
Key Highlights:

The real estate development along the southern region is in a relatively nascent stage. The
region surrounding the Hyderabad International Airport at Shamshabad is witnessing
development of numerous plotted development projects.

Plotted developments located off Shamshabad Airport, along the Sri Sailam Highway are
priced at approximately INR 5,000 per sq. yard to INR 7,000 per sq. yard, while properties
along the Bangalore Highway are in the price-band of INR 6,000 per sq. yard to INR 8,000 per
sq. yard.

Developers have also forayed into this market with affordable villas, priced at approximately
INR 40 lac per unit to INR 70 lac per unit depending on the size.

Sales are expected to remain low in this region as it is still in a relatively nascent stage with
limited infrastructure that will improve with time.

Some of the major developers in this region are Godrej and Purvankara.
Growth Stimulators:

With the development of Rajiv Gandhi International Airport at Shamshabad and other
developments such as SEZs, Hardware Park and Fab City, this region has started witnessing
traction from developers in terms of new launches as a residential location.

The 14.8-km JBS-Falaknuma metro line will enhance the connectivity of Southern Hyderabad
to Central Hyderabad.

The micro-market of Shamshabad, Shadnagar and surrounding areas are attracting investors,
with buyers purchasing into land parcels with a long-term view.
Source: PropEquity
Residential Property Rates in Prime Residential Markets of South Hyderabad Metropolitan Region**
Location
Avg Capital Values (INR/sft.)
Shamshabad
2,000-2,300
24
Rentals for 2 BHK ( INR/month )
4,000-6,000
LOCATION ATTRACTIVENESS INDEX
Chandanagar
Gachibowli
HITEC
city
Jubilee
Hills
Kondapur
Kukatpally
Madhapur
Manikonda
Miyapur
Connectivity and
Infrastructure (Roads,
schools, markets,
hospitals)
Residential Cost
Proximity to
Organized Retail
Proximity to
Commercial
Development
Scope of Future
Infrastructure
Development
Scope of Future
Employment
Generation
Good / low cost
Above Average / below average cost
Average / Medium Cost
Below Average / above average cost
Bad / High Cost
Explanatory Note: Central Hyderabad micro-market of Jubilee Hills has a developed civic
infrastructure being a mature micro-market having higher residential costs with organized retail and
commercial establishments in its vicinity. Gachibowli micro-market looks promising due to its
proximity to the office supply and thus a good future potential. The micro-markets of Kukatpally,
HITEC City, Madhapur, Kondapur, Chandanagar and Miyapur have a good scope for the future,
being in proximity to the commercial centers.
25
ANALYST
TANAY AGARWAL
Deputy Manager – Research
ICICI Home Finance Co. Ltd.
tanay.agarwal@icicihfc.com
For any further queries, please e–mail us at psgresearch@icicihfc.com
or
For more on our research reports & periodicals please log on to
www.icicihfc.com / www.icicihomesearch.com
ICICI HFC DISCLAIMERS & DISCLOSURES
The information set out in this document has been prepared by ICICI HFC Ltd. based upon projections which
have been determined in good faith by ICICI HFC Ltd. There can be no assurance that such projections will
prove to be accurate. Past performance cannot be a guide to future performance.
The information in this document reflects prevailing conditions and our views as of this date, all of which are
subject to change. In preparing this document we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information available from public sources or which was
provided to us or which was otherwise reviewed by us. ICICI HFC Ltd. does not accept any responsibility for
any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in
reliance on anything set out in this document. No reliance may be placed for any purpose whatsoever on the
information contained in this document or on its completeness
The product(s)/service(s)/offer(s) as contained herein are provided /offered by third party and are subject to
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The information set out in this document may be subject to change and such information may change
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26

HYDERABAD REAL ESTATE OVERVIEW MAY 2016

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