Residential projects continue to flood the Hyderabad market, particularly the western corridor, despite fears of a slowdown in the real estate sector due to inflation and rising interest rates. According to market estimates, 60,000 units will be delivered by the end of 2022, the most since 2018. This, according to developers, is due to the expansion of the IT industry, which will impact real estate growth to an all-time high. 

Over the last year, residential rentals have increased in most well-developed areas that are either close to major IT hubs or are themselves major IT/ITeS destinations. At 3.7 percent, the city has the highest rental yield in the country. The top ten rental markets have annual growth rates ranging from three to nine percent.

The pharmaceutical sector was a major driver of real estate in Hyderabad before IT took over the market. Given the current situation, the real estate market in Hyderabad is entirely reliant on the IT sector, pharmaceuticals, and public sector undertakings (PSUs). 

Impact of the Davos Dialogues on real estate growth:

The ‘Triumphant Telangana’ team, led by minister KT Rama Rao, is wrapping up the World Economic Forum (WEF) 2022 in Davos with investment deals worth Rs 4,500 crores, indicating that the real estate sector is expected to grow significantly in the near future.

Some of the biggest investments include, Hyundai’s 1,400 crore commitment in putting up testing tracks at the proposed Telangana Mobility Valley in Vikarabad; Stadler Rail will invest Rs 1,000 crore in a joint venture with Hyderabad-based Medha Servo Drives to build a rail coach factory in Rangareddy’s Kondakal. 2,500 jobs will be created by the proposed unit. 

The other big deals are three 500 crore deals with the Lulu Group in the Middle East, Ferring Pharma in Switzerland, and Aliaxis in Brussels.

Schneider Electric’s 300 crore plan to expand its presence in Hyderabad with a second plant at Shamshabad is at the bottom of the list. A total of 1,000 jobs will be created by the unit.

EMPE Diagnostics also plans to invest over 200 crore in Genome Valley to build a global production unit for Tuberculosis diagnostics kits with a capacity of 2 million kits per year. Smaller investments in the pipeline include Chemo Pharma’s plans to expand by 100 crores and GMM Pfaudler’s plan to expand its glass lining equipment manufacturing unit for the pharmaceutical and chemical industries by 33 crores.

All these investments are likely to cause an enormous rise in the real estate sector in and around the areas where such industries will be set up.