Hyderabad tops first GCC market rental index, Hitec City and Gachibowli lead the boom story
Hyderabad has emerged as the top-ranked city in India’s first-ever survey of Global Capability Centres-Commercial Property Rental Index (GCC CPRI), created jointly by IIM Bangalore
Hyderabad has emerged as the top-ranked city in India’s first-ever survey of Global Capability Centres-Commercial Property Rental Index (GCC CPRI), created jointly by IIM Bangalore and CRE Matrix, a realty analytics firm. Hyderabad posted an index value of 212.1 in Q1 Calendar Year (CY) 26, which is the highest among all ten cities tracked in India. Tracked over five years from the first quarter of 2021, Hyderabad recorded a 5.4% year-on-year jump and a steady 4.4% three-year Compound Annual Growth Rate (CAGR), with researchers noting the GCC CPRI has ‘maintained an upward trajectory’, marking out resilience of Hyderabad’s GCC-led office market. Rental premium in Hyderabad The survey found that Hyderabad commands the biggest GCC rental premium in the country: a 15% premium on market rent and a 10% premium on passing rent over non-GCC occupiers.
This positions it, along with Bengaluru, as one of the clearest markets in India tilted towards ‘GCC-favouring’. West Hyderabad leads in GCC leasing volume Within the city, Hitec City stands out as the most consistent macro-market, posting a 11.1% three-year CAGR, while Gachibowli leads on leasing volume with a 70% GCC occupied share. The surprise find in the survey is the 8.4% CAGR in the ‘peripheral east’ side of the city where the rental index is lower relative to Hitec City. Pushing up the rental index are the major deals during the quarter that included Switzerland-based Novartis Healthcare’s 8.65 lakh sq ft commitment and the US-headquartered Qualcomm’s 3.88 lakh sq ft lease, both in Madhapur.
However, there is a caveat to the growth story with the study noting: “Hyderabad and Pune - both above 210 - have seen rents compound at 4.4% annually over three years, but their quarterly momentum is nearly flat (+0.9% and 0.0%), signalling a market that has repriced and is now stabilising.” By contrast, Bengaluru which is India’s largest GCC market posted a GCC CPRI of 190.0, with growth slowing sharply to just 1.6% over three years, even though it boasts the steepest market rent premium nationally at 50%. Pune, the strongest ‘emerging’ market, trails marginally behind Hyderabad at 210.7, with a 20% market rent premium, but its index has plateaued, moving less than 1.8% over five consecutive quarters as it shifts from rapid appreciation into a consolidation phase.
While India had market trackers for home, office spaces and commercial spaces for rent and ownership, the survey done by IIM Bangalore and CRE Matrix is the first that has tracked the Global Capability Centres with what it called ‘rigorous, transaction-based index”. GCCs have emerged as one of the largest employers as well as lease-holders of office spaces in the business sectors of Indian cities with politicians going out of the way wooing companies to set up shop in their cities.
The BriefWire