Equate Realtors

Hyderabad, once famous for its pearls, biryani, ancient culture and heritage has today emerged as the most preferred destination for many national and multinational organizations. Availability of skilled manpower, proactive government policies and improved infrastructure are some of the vital factors that are driving the corporates and MNCs to this city which in turn has contributed to a sudden boom in the real estate market.

Though the real estate market attracted some demand during the general property boom between the years 1992 and 1995, the ‘real’ growth started only after 1995, thanks to Andhra Pradesh government’s proactive approach and investment-friendly policy measures.

Capital and rental values have gone up substantially from their 1995 levels and a similar trend is likely to continue in the near future. In the last two years, the city has witnessed unprecedented growth in real estate and property prices in Hyderabad and its outskirts have spiraled. Most of the demand has come from IT companies many of which are now preferring Hyderabad to Bangalore because of infrastructure-related snags there. With majors like Microsoft, Oracle, Bann Info, Wipro, D E Shaw, Citicorp, Intergraph, Satyam Computers and many others entering the city territory, the entire structure of the market has transformed.

According to Sushil Dungarwal, Head, Retail, Prestige Group of Bangalore, “Hyderabad, as a real estate market, has been evolving for the past decade. The city has seen a huge growth both in terms of population and infrastructure. The real estate market has hotted up in the last 2-3 years, as it has happened in other parts of the country. But Hyderabad has a huge potential and there will be a constant evolvement of the market.”

The state government is putting up the Indian Institute of Information Technology (IIIT) in association with Microsoft, Oracle, Satyam Computers and Metamor Graphics. This will enhance the city’s reputation as an IT education destination. Further, the state government has also earmarked Rs 1,500 crore for a Hitech City in order to provide conducive base to IT companies.

Besides government incentives, factors like lower cost of living, shorter travel times to the work place and easy availability of skilled manpower make the city quite attractive.

While commercial development is at its peak, the residential and retail segments are not lagging behind.

Reasons for growth

While speaking about the metamorphosis of Hyderabad, it’s impossible to ignore the IT industry and the corporate establishments. “Technology sector has proved to be a major reason for real estate growth. With more and more companies showing keen interest to launch their operations in and around Hyderabad, it has become extremely necessary to provide good infrastructure,” claims Farook Mahmood of Silverline Pvt Ltd., Bangalore. Contributions by the present as well as the previous state government under the leadership of former chief minister N. Chandrababu Naidu have worked wonders for the city. Apart from the various incentives, the government has launched many programmes aimed at providing state-of-the-art infrastructure. Several companies from the US, Singapore, Malaysia, Japan and Dubai as well as local players have expressed keen interest to participate in infrastructural projects. Entrepreneurs are of the opinion that Hyderabad has immense potential for growth. Which is why major construction companies are planning to develop integrated townships in the city. Reputed companies like Madhucon Projects Ltd., DLF Universal Ltd. and IVRCL Infrastructure & Projects Ltd. have drafted plans to develop housing-cum-commercial projects which would comprise of deluxe residential apartments, five star hotels, multiplexes and shopping malls.

“The ongoing infrastructure projects which are in various stages of implementation, will on completion, catapult the city into the league of metropolises of the world. Estimated to cost about Rs 18,643 crore, these projects are poised to change the face of Hyderabad forever,” says K Ravinder Reddy of Janapriya Engineers Syndicate.

The construction of the state-of-the-art international airport at Shamshabad has further accelerated real estate growth in Hyderabad. Being constructed at a cost of Rs 1,600 crore, it is billed as the first of its kind in India. Funded and developed by the GMR Hyderabad International Airport Ltd as a public-private joint venture between the GMR Group, Malaysia Airports Holdings Berhad and state government and Airports Authority of India, it will be completed by March 2008.

Another project that has contributed to the real estate growth is the Outer Ring Road (ORR) project, which will run for 162 km around the city and will have 33 radial roads connecting the inner parts of the city. The Phase I of the project, costing Rs 500 crore, will cover a stretch of 22 km from Gachibowli to Shamshabad. A metro rail transit system (MRTS) on the lines of Delhi Metro has also been proposed on a stretch of 60 km at a cost Rs 7,000 crore. Another project to improve traffic conditions in the city is the integrated transport terminal. The terminal will come up at old Gandhi Hospital in Secunderabad to relieve congestion around the railway station. In its pursuit to streamline development, the government has also decided to set up the Hyderabad Metropolitan Development Authority (HMDA) with enhanced jurisdiction over 6,852 sq km as compared to 2197 sq km under Hyderabad Urban Development Authority (HUDA). Both the bodies have started work to decongest roads. Construction of flyovers and subways have been undertaken to help solve the problem of the ever-increasing traffic.

Another significant development is in terms of computerization of land registration in the state, which has cut down the delay in the process of registration substantially. Areas like Jubilee Hills and Madhapur are experiencing commercial as well as residential growth, while Nallagundla and Miyapur are witnessing growth in the residential segment. “Further, FDI has also given a new thrust to the real estate growth. The upbeat mood can be gauged by the arrival of pan-Indian realtors from cities like Mumbai, Bangalore and Delhi who have already established their presence in the city,” says M L Rao, MD, Equate Realtors. “Hyderabad is strategically located – almost equidistant to all the metros and is well backed by its high quality medical facilities as well as the hospitality sector. All in all the real estate market in Hyderabad is one of the most flourishing markets in the country and the scene is likely to continue in the near future,” he adds.

Commercial growth

The commercial real estate segment is undergoing the fastest transformation in the city. With Bangalore and Delhi market becoming saturated, Hyderabad is becoming a favoured destination for builders from Bangalore, Pune, Mumbai and even Gurgaon.

With majors like Microsoft, Oracle, Bann Info, Wipro, D E Shaw, Citicorp, Intergraph, Satyam Computers, Metamor Graphics, etc entering the city territory, the entire structure of the market has transformed.

A survey conducted jointly by Jones Lang LaSalle and Equate Realtors has revealed that 6 million sq. ft. of ‘Grade A’ office space has been occupied by IT/ ITES sectors alone. The demand has been estimated at 30 million sq. ft. by 2010 if the current trend in absorption level is any indication.

According to M L Rao, Bangalore-based Divyashree has three ongoing projects covering 17 to 37.25 acres including a joint venture with city-based Ambience Properties. Delhi-based DLF is also developing an IT Park of approximately 4.5 million sq. ft, offering modern workspace to IT/ ITES companies. Clubbed with residential and recreational developments, the complex offers a holistic work-live solution. Ramkey group is yet another company planning to foray into commercial development.

In Gachibowli, 80 acres of land has been earmarked for international banks and financial institutions to set up units. The government has already allotted 140 acres for this financial district. Lanco Infratech has acquired 108 acres in Manicanda at Rs 4.5 crores per acre. The group is reportedly planning to enter into a joint venture with Mantri Developers of Bangalore to develop a project. This has triggered a fresh wave of demand and price hike in areas adjoining the proposed international airport.

Mumbai-based Raheja group has succeeded in leasing commercial space even before construction. The demand has sent the lease rentals to a new high. The group has acquired 100 acres in Gundla Pochampalli, where the government has allotted 600 acres to global giants for joint venture development. And Divyashree group has reportedly acquired 100 acres for development. Another Bangalore-based developer, RMZ Corp has a project in the pipeline called RMZ Futura, which is spread over 3.5 lakh sq. ft. Further, Prestige group of Bangalore is coming up with a huge commercial project at Kukatpally. This project will cover almost 11lakh sq. ft with shopping, entertainment, multiplex, food court, service apartments and serviced offices.

According to Trammell Crow Meghraj, the relaxation of FDI ceiling rate is likely to spur further activity. It is also likely that the rental and capital values will remain buoyant with the new supply hitting the Hyderabad market in the forthcoming quarters. Cyberabad and especially the New CBD comprising Banjara Hills, Jubilee Hills, and Panjagutta, are the most active markets in the city. By year-end, there is likely to be a total absorption of around 2.8 million sq. ft.

However, the market continues to be characterized by a shortage in supply. Supply and absorption is being fuelled by increase in demand for IT and ITES services. As much as 70-75 per cent absorption has taken place in the category of IT offshoring and BPO by the middle of the year. The balance commitments come from corporate offices, sales and marketing and financial sectors. As per STPI, Andhra Pradesh is on course to garner about 15 per cent of the country's overall software exports pie this fiscal and has registered a growth of 39 per cent in IT/ITES companies.

As far as supply goes, about 10 million sq. ft. of commercial space is under construction as well as planning stage, of which around two million sq. ft. is expected to be delivered in the next 12 months. There is a considerable development taking place in Cyberabad. New commercial spaces are also being developed in suburban areas like Kukatpally, Gachibowli, Uppal and Nacharam.

Local builders are also not lagging behind and are grabbing the opportunity and coming up with several projects. Lumbini Constructions Limited is undertaking many projects in anticipation of the city’s rising infrastructure needs. Amongst other projects they also have office complexes project in the pipeline. Ashoka Builders is another big name in the city and have around 13 lakh sq. ft. of ongoing commercial projects. The Ashoka Software Park at Madhapur is spread over 12 lakh sq. ft and is in the epicenter of Hitec City while Ashoka Dwarka Arcade at Himayatnagar is spread over 45,000 sq. ft.

Janapriya Engineers Syndicate was amongst the first builders in the city to offer apartments for lower and middle-income groups. They have realized that there is now a larger market for luxury apartments and commercial complexes and have accordingly changed course. They have forayed into commercial complexes, multiplexes and IT Parks. SMR Builders is another group that has been around for more than a decade. The company is involved mainly in the construction of expensive residential flats, commercial complexes and independent sites. Most of their constructions are in the West Marredpally area of Hyderabad and neighboring Secunderabad. However, they are planning projects in Cyberabad, Madhapur and Banjara Hills as well. Sanali Group-Remax Constructions, the flagship company of the Sanali Group, is also involved in the building of commercial complexes and IT Parks.

With so much commercial developments taking place, capital values and rentals have gone up. Areas like Begumpet, Panjagutta, Banjara Hills and Cyberabad registered a rise by about 10 per cent in the CBD and by 15 per cent in Cyberabad, over the last quarter’s values. Even so, prime rentals in Hyderabad are a mere Rs 34 per sq. ft. with total occupation costing around Rs 64 per sq ft. These rates are nearly 30 per cent less than what Bangalore offers and 10-15 per cent less than Chennai.

According to M L Rao, there is approximately 20-40 per cent increase in rental values in the commercial segment. In Begumpet, rental levels are up from Rs 12-Rs 18 per sq. ft. per month to Rs 25-Rs 30 per sq. ft. per month. Capital values moved from Rs 2,200 – Rs. 2,500 per sq. ft. to Rs 3,500- Rs 3,800 per sq. ft. in a span of just one year.

Residential market

Hyderabad is witnessing a mushrooming of high-end premium residential apartments and gated communities. These projects promise the best in quality living, offering amenities and social infrastructure to make a sustainable development.

According to M L Rao, “Every square foot of retail or commercial occupancy requires 7 sq. ft of residential development. Hence one can understand the growth in residential segment.”

“If you compare the current residential activity in Hyderabad with that of some 4-5 years, you can see a large difference. All builders are now providing amenities of international standards. ‘A’ grade builders are constructing integrated houses or villas. One villa covering 300 sq yards with all club facilities costs between Rs 1.5 crore and Rs 1.75 crore and the delivery is within 12 months. The appreciation at the time of possession is about 60-100 per cent. Rental values in the past 12 months have also increased about 40-60 per cent in the residential segment,” he adds. The growing demand and limited supply have hardened prices for residential properties.

The focus of development is suburbs where land availability is considerable and therefore large-scale development is possible. Township projects are coming up in areas like Vattinagulapalli, Gaulidodi, Metchel road, Nanakrakuda and Maniconda.

Small township projects are initiated by local developers like Ashoka Builders, who recently announced a 250-unit project, with each unit costing Rs 80 lakhs. Jayabheri group and Aparna have also announced independent units ranging from Rs 60 lakh to Rs 1.25 crore. Incidentally, all the units were sold out without much marketing effort. Apartment prices doubled in a span of four years, which has given a virtual boost to the city developers to undertake more projects.

Land prices are moving north on seeing the demand revival. In areas like Kondapur, land prices nearly doubled from Rs 8,500 per sq. yd. to Rs 16,000 per sq. yd. in a span of just six months.

The demand for upmarket apartments is mainly driven by IT/ ITES sector, financial and insurance companies. The senior professionals' loan eligibility has been estimated at Rs 30 lakh to Rs 1 crore, according to housing finance company sources. A recent study has revealed that 300 senior professionals in Hyderabad are entitled for home loan eligibility in the range of Rs 1 crore – Rs 3 crore. And 700 professionals are eligible for home loan eligibility in the region of Rs 50 lakh - Rs 1 crore. According to Sunil Reddy, Managing Director of IVR Prime Urban Developers Limited, the indicative price of apartments in high-rise buildings in the upmarket areas ranges from Rs 2,800 to Rs 3,500 per sq ft while the size of the apartment ranges from 1100 sq ft to 3,500 sq ft. “With regard to individual homes,” says Reddy, “the focus has shifted from building individual homes to building independent houses in gated communities.”

Today, the emphasis is more on centralised security, general ambience, shopping and recreational facilities. Better infrastructure with good quality specifications, fine detailing and quality are what the builders are providing.

The plot size of the independent houses range from 250 sq yards to 650 sq yards while the built-up area would be 2,100 sq ft to 5,300 sq ft. Depending on the size and specifications, the price ranges from Rs 1.7 crore to Rs 3.3 crore.

R Sridharan, COO of L&T Infocity says, “The major segment of buyers and tenants of such luxury dwellings are the employees of IT companies, NRIs, individuals relocating to India from overseas, businessmen and other professionals. “Earlier, 80 per cent of the buyers of luxury houses used to be businessmen. Now, at least 50 per cent of such buyers belong to the IT community,” he adds. “Also, gone are the days of apartment complexes which barely had parking space, leave alone other amenities. Now, even in apartment complexes, amenities like a club-house and swimming pool are being provided. With the rising land prices, small builders are also on their way out. The land prices have gone up so much that only big builders with strong balance-sheets will be able to do the real estate business hereafter,” reveals Sridharan.

Some of the major developments are by Ambience Group and Jayabheri group. Jayabheri Park by the latter consists of a lake and recreational facilities. Its Jayabheri Enclave is a fully developed housing colony with all the latest amenities built in. Babu Khan Builders is probably amongst the oldest real estate developers in the city. They have ventured into most areas of construction including industrial ventures, commercial complexes and residential apartments. Some of their most prominent buildings include Babukhan Estates, Babukhan Chambers, Deccan Towers and Babukhan Mall.

Lumbini Group has several residential projects under construction. Amongst these, Lumbini SLN Springs is an environment for high living. This is a 15-acre vast layout of independent duplex houses in the most sought-after place of Gachibowli, “the new face of Hyderabad.” Ashoka Builders is coming up with a gated township at Kompalli, “a hot destination for real estate growth where one has good access to schools, hospitals, entertainment facilities etc,” reveals Jaiveer Reddy of the group. “There is another 42-apartment project that we are coming up with near the lake.”

The other local builders who have various residential projects in the pipeline are Janapriya Engineers Syndicate, SMR builders, Saket Engineers, Amsri Builders and Sanali Group. Saket Mithila in Kapra, spread over 11 acres of greenery, is an extension of the Saket Designer Homes Township of 750 houses, a purely residential project. Mithila, a gated property, consists of 100 exquisitely designed villas. Saket Pranaam consists of luxury homes exclusively for senior citizens. It is a secured gated community with a condominium of 400 flats spread over 4 acres. Further, Pune-based DS Kulkarni Developers Limited (DSKDL), which is a part of the Rs.1,200-crore DSK group, is also planning to undertake residential projects in Hyderabad. DLF too has a mega residential project in the outskirts of the city.

HYDERABAD’S NEW HOT SPOT
Hyderabad, once famous for its pearls, biryani, ancient culture and heritage has today emerged as the most preferred destination for many national and multinational organizations. Availability of skilled manpower, proactive government policies and improved infrastructure are some of the vital factors that are driving the corporates and MNCs to this city which in turn has contributed to a sudden boom in the real estate market. Though the real estate market attracted some demand during the general property boom between the years 1992 and 1995, the ‘real’ growth started only after 1995, thanks to Andhra Pradesh government’s proactive approach and investment-friendly policy measures. Capital and rental values have gone up substantially from their 1995 levels and a similar trend is likely to continue in the near future. In the last two years, the city has witnessed unprecedented growth in real estate and property prices in Hyderabad and its outskirts have spiraled. Most of the demand has come from IT companies many of which are now preferring Hyderabad to Bangalore because of infrastructure-related snags there. With majors like Microsoft, Oracle, Bann Info, Wipro, D E Shaw, Citicorp, Intergraph, Satyam Computers and many others entering the city territory, the entire structure of the market has transformed. According to Sushil Dungarwal, Head, Retail, Prestige Group of Bangalore, “Hyderabad, as a real estate market, has been evolving for the past decade. The city has seen a huge growth both in terms of population and infrastructure. The real estate market has hotted up in the last 2-3 years, as it has happened in other parts of the country. But Hyderabad has a huge potential and there will be a constant evolvement of the market.” The state government is putting up the Indian Institute of Information Technology (IIIT) in association with Microsoft, Oracle, Satyam Computers and Metamor Graphics. This will enhance the city’s reputation as an IT education destination. Further, the state government has also earmarked Rs 1,500 crore for a Hitech City in order to provide conducive base to IT companies. Besides government incentives, factors like lower cost of living, shorter travel times to the work place and easy availability of skilled manpower make the city quite attractive. While commercial development is at its peak, the residential and retail segments are not lagging behind. Reasons for growth While speaking about the metamorphosis of Hyderabad, it’s impossible to ignore the IT industry and the corporate establishments. “Technology sector has proved to be a major reason for real estate growth. With more and more companies showing keen interest to launch their operations in and around Hyderabad, it has become extremely necessary to provide good infrastructure,” claims Farook Mahmood of Silverline Pvt Ltd., Bangalore. Contributions by the present as well as the previous state government under the leadership of former chief minister N. Chandrababu Naidu have worked wonders for the city. Apart from the various incentives, the government has launched many programmes aimed at providing state-of-the-art infrastructure. Several companies from the US, Singapore, Malaysia, Japan and Dubai as well as local players have expressed keen interest to participate in infrastructural projects. Entrepreneurs are of the opinion that Hyderabad has immense potential for growth. Which is why major construction companies are planning to develop integrated townships in the city. Reputed companies like Madhucon Projects Ltd., DLF Universal Ltd. and IVRCL Infrastructure & Projects Ltd. have drafted plans to develop housing-cum-commercial projects which would comprise of deluxe residential apartments, five star hotels, multiplexes and shopping malls. “The ongoing infrastructure projects which are in various stages of implementation, will on completion, catapult the city into the league of metropolises of the world. Estimated to cost about Rs 18,643 crore, these projects are poised to change the face of Hyderabad forever,” says K Ravinder Reddy of Janapriya Engineers Syndicate. The construction of the state-of-the-art international airport at Shamshabad has further accelerated real estate growth in Hyderabad. Being constructed at a cost of Rs 1,600 crore, it is billed as the first of its kind in India. Funded and developed by the GMR Hyderabad International Airport Ltd as a public-private joint venture between the GMR Group, Malaysia Airports Holdings Berhad and state government and Airports Authority of India, it will be completed by March 2008. Another project that has contributed to the real estate growth is the Outer Ring Road (ORR) project, which will run for 162 km around the city and will have 33 radial roads connecting the inner parts of the city. The Phase I of the project, costing Rs 500 crore, will cover a stretch of 22 km from Gachibowli to Shamshabad. A metro rail transit system (MRTS) on the lines of Delhi Metro has also been proposed on a stretch of 60 km at a cost Rs 7,000 crore. Another project to improve traffic conditions in the city is the integrated transport terminal. The terminal will come up at old Gandhi Hospital in Secunderabad to relieve congestion around the railway station. In its pursuit to streamline development, the government has also decided to set up the Hyderabad Metropolitan Development Authority (HMDA) with enhanced jurisdiction over 6,852 sq km as compared to 2197 sq km under Hyderabad Urban Development Authority (HUDA). Both the bodies have started work to decongest roads. Construction of flyovers and subways have been undertaken to help solve the problem of the ever-increasing traffic. Another significant development is in terms of computerization of land registration in the state, which has cut down the delay in the process of registration substantially. Areas like Jubilee Hills and Madhapur are experiencing commercial as well as residential growth, while Nallagundla and Miyapur are witnessing growth in the residential segment. “Further, FDI has also given a new thrust to the real estate growth. The upbeat mood can be gauged by the arrival of pan-Indian realtors from cities like Mumbai, Bangalore and Delhi who have already established their presence in the city,” says M L Rao, MD, Equate Realtors. “Hyderabad is strategically located – almost equidistant to all the metros and is well backed by its high quality medical facilities as well as the hospitality sector. All in all the real estate market in Hyderabad is one of the most flourishing markets in the country and the scene is likely to continue in the near future,” he adds. Commercial growth The commercial real estate segment is undergoing the fastest transformation in the city. With Bangalore and Delhi market becoming saturated, Hyderabad is becoming a favoured destination for builders from Bangalore, Pune, Mumbai and even Gurgaon. With majors like Microsoft, Oracle, Bann Info, Wipro, D E Shaw, Citicorp, Intergraph, Satyam Computers, Metamor Graphics, etc entering the city territory, the entire structure of the market has transformed. A survey conducted jointly by Jones Lang LaSalle and Equate Realtors has revealed that 6 million sq. ft. of ‘Grade A’ office space has been occupied by IT/ ITES sectors alone. The demand has been estimated at 30 million sq. ft. by 2010 if the current trend in absorption level is any indication. According to M L Rao, Bangalore-based Divyashree has three ongoing projects covering 17 to 37.25 acres including a joint venture with city-based Ambience Properties. Delhi-based DLF is also developing an IT Park of approximately 4.5 million sq. ft, offering modern workspace to IT/ ITES companies. Clubbed with residential and recreational developments, the complex offers a holistic work-live solution. Ramkey group is yet another company planning to foray into commercial development. In Gachibowli, 80 acres of land has been earmarked for international banks and financial institutions to set up units. The government has already allotted 140 acres for this financial district. Lanco Infratech has acquired 108 acres in Manicanda at Rs 4.5 crores per acre. The group is reportedly planning to enter into a joint venture with Mantri Developers of Bangalore to develop a project. This has triggered a fresh wave of demand and price hike in areas adjoining the proposed international airport. Mumbai-based Raheja group has succeeded in leasing commercial space even before construction. The demand has sent the lease rentals to a new high. The group has acquired 100 acres in Gundla Pochampalli, where the government has allotted 600 acres to global giants for joint venture development. And Divyashree group has reportedly acquired 100 acres for development. Another Bangalore-based developer, RMZ Corp has a project in the pipeline called RMZ Futura, which is spread over 3.5 lakh sq. ft. Further, Prestige group of Bangalore is coming up with a huge commercial project at Kukatpally. This project will cover almost 11lakh sq. ft with shopping, entertainment, multiplex, food court, service apartments and serviced offices. According to Trammell Crow Meghraj, the relaxation of FDI ceiling rate is likely to spur further activity. It is also likely that the rental and capital values will remain buoyant with the new supply hitting the Hyderabad market in the forthcoming quarters. Cyberabad and especially the New CBD comprising Banjara Hills, Jubilee Hills, and Panjagutta, are the most active markets in the city. By year-end, there is likely to be a total absorption of around 2.8 million sq. ft. However, the market continues to be characterized by a shortage in supply. Supply and absorption is being fuelled by increase in demand for IT and ITES services. As much as 70-75 per cent absorption has taken place in the category of IT offshoring and BPO by the middle of the year. The balance commitments come from corporate offices, sales and marketing and financial sectors. As per STPI, Andhra Pradesh is on course to garner about 15 per cent of the country's overall software exports pie this fiscal and has registered a growth of 39 per cent in IT/ITES companies. As far as supply goes, about 10 million sq. ft. of commercial space is under construction as well as planning stage, of which around two million sq. ft. is expected to be delivered in the next 12 months. There is a considerable development taking place in Cyberabad. New commercial spaces are also being developed in suburban areas like Kukatpally, Gachibowli, Uppal and Nacharam. Local builders are also not lagging behind and are grabbing the opportunity and coming up with several projects. Lumbini Constructions Limited is undertaking many projects in anticipation of the city’s rising infrastructure needs. Amongst other projects they also have office complexes project in the pipeline. Ashoka Builders is another big name in the city and have around 13 lakh sq. ft. of ongoing commercial projects. The Ashoka Software Park at Madhapur is spread over 12 lakh sq. ft and is in the epicenter of Hitec City while Ashoka Dwarka Arcade at Himayatnagar is spread over 45,000 sq. ft. Janapriya Engineers Syndicate was amongst the first builders in the city to offer apartments for lower and middle-income groups. They have realized that there is now a larger market for luxury apartments and commercial complexes and have accordingly changed course. They have forayed into commercial complexes, multiplexes and IT Parks. SMR Builders is another group that has been around for more than a decade. The company is involved mainly in the construction of expensive residential flats, commercial complexes and independent sites. Most of their constructions are in the West Marredpally area of Hyderabad and neighboring Secunderabad. However, they are planning projects in Cyberabad, Madhapur and Banjara Hills as well. Sanali Group-Remax Constructions, the flagship company of the Sanali Group, is also involved in the building of commercial complexes and IT Parks. With so much commercial developments taking place, capital values and rentals have gone up. Areas like Begumpet, Panjagutta, Banjara Hills and Cyberabad registered a rise by about 10 per cent in the CBD and by 15 per cent in Cyberabad, over the last quarter’s values. Even so, prime rentals in Hyderabad are a mere Rs 34 per sq. ft. with total occupation costing around Rs 64 per sq ft. These rates are nearly 30 per cent less than what Bangalore offers and 10-15 per cent less than Chennai. According to M L Rao, there is approximately 20-40 per cent increase in rental values in the commercial segment. In Begumpet, rental levels are up from Rs 12-Rs 18 per sq. ft. per month to Rs 25-Rs 30 per sq. ft. per month. Capital values moved from Rs 2,200 – Rs. 2,500 per sq. ft. to Rs 3,500- Rs 3,800 per sq. ft. in a span of just one year. Residential market Hyderabad is witnessing a mushrooming of high-end premium residential apartments and gated communities. These projects promise the best in quality living, offering amenities and social infrastructure to make a sustainable development. According to M L Rao, “Every square foot of retail or commercial occupancy requires 7 sq. ft of residential development. Hence one can understand the growth in residential segment.” “If you compare the current residential activity in Hyderabad with that of some 4-5 years, you can see a large difference. All builders are now providing amenities of international standards. ‘A’ grade builders are constructing integrated houses or villas. One villa covering 300 sq yards with all club facilities costs between Rs 1.5 crore and Rs 1.75 crore and the delivery is within 12 months. The appreciation at the time of possession is about 60-100 per cent. Rental values in the past 12 months have also increased about 40-60 per cent in the residential segment,” he adds. The growing demand and limited supply have hardened prices for residential properties. The focus of development is suburbs where land availability is considerable and therefore large-scale development is possible. Township projects are coming up in areas like Vattinagulapalli, Gaulidodi, Metchel road, Nanakrakuda and Maniconda. Small township projects are initiated by local developers like Ashoka Builders, who recently announced a 250-unit project, with each unit costing Rs 80 lakhs. Jayabheri group and Aparna have also announced independent units ranging from Rs 60 lakh to Rs 1.25 crore. Incidentally, all the units were sold out without much marketing effort. Apartment prices doubled in a span of four years, which has given a virtual boost to the city developers to undertake more projects. Land prices are moving north on seeing the demand revival. In areas like Kondapur, land prices nearly doubled from Rs 8,500 per sq. yd. to Rs 16,000 per sq. yd. in a span of just six months. The demand for upmarket apartments is mainly driven by IT/ ITES sector, financial and insurance companies. The senior professionals' loan eligibility has been estimated at Rs 30 lakh to Rs 1 crore, according to housing finance company sources. A recent study has revealed that 300 senior professionals in Hyderabad are entitled for home loan eligibility in the range of Rs 1 crore – Rs 3 crore. And 700 professionals are eligible for home loan eligibility in the region of Rs 50 lakh - Rs 1 crore. According to Sunil Reddy, Managing Director of IVR Prime Urban Developers Limited, the indicative price of apartments in high-rise buildings in the upmarket areas ranges from Rs 2,800 to Rs 3,500 per sq ft while the size of the apartment ranges from 1100 sq ft to 3,500 sq ft. “With regard to individual homes,” says Reddy, “the focus has shifted from building individual homes to building independent houses in gated communities.” Today, the emphasis is more on centralised security, general ambience, shopping and recreational facilities. Better infrastructure with good quality specifications, fine detailing and quality are what the builders are providing. The plot size of the independent houses range from 250 sq yards to 650 sq yards while the built-up area would be 2,100 sq ft to 5,300 sq ft. Depending on the size and specifications, the price ranges from Rs 1.7 crore to Rs 3.3 crore. R Sridharan, COO of L&T Infocity says, “The major segment of buyers and tenants of such luxury dwellings are the employees of IT companies, NRIs, individuals relocating to India from overseas, businessmen and other professionals. “Earlier, 80 per cent of the buyers of luxury houses used to be businessmen. Now, at least 50 per cent of such buyers belong to the IT community,” he adds. “Also, gone are the days of apartment complexes which barely had parking space, leave alone other amenities. Now, even in apartment complexes, amenities like a club-house and swimming pool are being provided. With the rising land prices, small builders are also on their way out. The land prices have gone up so much that only big builders with strong balance-sheets will be able to do the real estate business hereafter,” reveals Sridharan. Some of the major developments are by Ambience Group and Jayabheri group. Jayabheri Park by the latter consists of a lake and recreational facilities. Its Jayabheri Enclave is a fully developed housing colony with all the latest amenities built in. Babu Khan Builders is probably amongst the oldest real estate developers in the city. They have ventured into most areas of construction including industrial ventures, commercial complexes and residential apartments. Some of their most prominent buildings include Babukhan Estates, Babukhan Chambers, Deccan Towers and Babukhan Mall. Lumbini Group has several residential projects under construction. Amongst these, Lumbini SLN Springs is an environment for high living. This is a 15-acre vast layout of independent duplex houses in the most sought-after place of Gachibowli, “the new face of Hyderabad.” Ashoka Builders is coming up with a gated township at Kompalli, “a hot destination for real estate growth where one has good access to schools, hospitals, entertainment facilities etc,” reveals Jaiveer Reddy of the group. “There is another 42-apartment project that we are coming up with near the lake.” The other local builders who have various residential projects in the pipeline are Janapriya Engineers Syndicate, SMR builders, Saket Engineers, Amsri Builders and Sanali Group. Saket Mithila in Kapra, spread over 11 acres of greenery, is an extension of the Saket Designer Homes Township of 750 houses, a purely residential project. Mithila, a gated property, consists of 100 exquisitely designed villas. Saket Pranaam consists of luxury homes exclusively for senior citizens. It is a secured gated community with a condominium of 400 flats spread over 4 acres. Further, Pune-based DS Kulkarni Developers Limited (DSKDL), which is a part of the Rs.1,200-crore DSK group, is also planning to undertake residential projects in Hyderabad. DLF too has a mega residential project in the outskirts of the city.