Real estate is expected to receive a boost with legal decks being cleared for the formation of Hyderabad by the Andhra Pradesh govt. With better infrastructure, roads, bridges, drainage and sanitation in surrounding villages and municipalities, townships are expected to witness a boom in these areas as people would prefer to stay beyond the crowded city areas. The positive sentiment is already driving land prices up in the areas falling under Hyderabad.

Hyderabad, the capital city of Andhra Pradesh was earlier known more for its pearls, Nawabs and mouth watering cuisine than as its progressive image now as a hi-tech city. It shot into the limelight as it aggressively wooed IT majors from overseas, and continues to be one of India's first cities to lead the IT revolution in India.

Rated as the fourth fastest growing city in the world by the US based International Market Research Report, Hyderabad is a trend setter for other emerging cities aspiring to cash in on the IT boom. Its twin city Secunderabad, across the Hussain Sagar Lake has shared its success and supported its growth. Hyderabad is well on its way to becoming a global city with India's first Fab City, a silicon chip manufacturing facility being setup with an investment of $3 billion by the AMD-SemIndia consortium.

Hyderabad has a large talent pool, and known for its research institutes and academic institutes, both privately run and promoted by the government. The Birla Institute of Technology will add to the resource pool as it sets up its third campus in India on 200 acres at Jawaharnagar near Shamirpet.

The Hyderabad Information Technology Engineering Consultancy City, or HITEC City is a 151 acre self-reliant business park, jointly controlled by the Andhra Pradesh Industrial Infrastructure Corporation and Larsen and Toubro, and home to the who's who of the IT industry, both national and international.

The next decade will witness a quantum leap in business, as Rs. 70,000 crore will be dedicated to various projects in the city. These include: the Infosys Software Park as it relocates from Bangalore to a campus 4 times its size, a Hardware Park on 2500 acres, the Nanotech Park on 1100 acres, a Gems and Jewellery park on 200 acres, a Textiles Park on 500 acres, the Reliance LPG facility on 25,000 acres, an Aero Park for Aero space and Aeronautics and the Trade Centre Tower.

Infrastructure

Hyderabad has efficient inter city links through air, road and rail. Within the city, apart from an excellent bus transport network, the MMTS rail connects various parts of the city with Hyderabad, Secunderabad, Lingampally and Falaknuma. Hyderabad is scheduled to get a Metro system to help ease urban congestion.

A new international airport is under construction by GMR Hyderabad international at Shamshabad and will be operational by March 1, 2008 The airport, being built at a cost of Rs. 1350 crore to cater to 40 million passengers a year, is expected to be one of the best in this region and will house world-class facilities. The work on the flyover linking Mehdipatnam to the Shamshabad Airport has started.

The expansion of the city has led the Hyderabad Metropolitan Development Authority to augment the civic infrastructure in the city. The 8-lane Outer Ring Road will circle 170 kms on Hyderabad's periphery, free of traffic signals and supported by service lines.

India's longest flyover from Masab tank to the new airport is taking shape at a cost of Rs. 800 crores. The Aga Khan International University will be developed on a 100 acre campus, while a Knowledge Corridor in partnership with the Dubai Government is being planned on the stretch between Kanamet and Kollur.

Real Estate Developments in Hyderabad

In its road to development, Hyderabad has stretched its municipal limits towards north, northwest and west. The construction of the international airport, the Outer Ring Road and the elevated expressway corridor has pulled the city on its southern limits as well. The residential localities in the heart of the city are giving way to commercial and retail spaces.
Corporates prefer to move into ready-to-occupy properties before moving into a customized facility, as they need some incubation time before expanding their operations.

Hyderabad has shared 60% of the action in the commercial property market with Chennai and Bangalore in the last 2 years, with 2.7 million sq. ft leased out in 2005. The nature of development is shifting from speculative to demand based. Cyberabad in West Hyderabad covers 51.70 sq. kms, and is host to Infosys, Microsoft, Google, Wipro and Dell, amongst others.

Cushman and Wakefield has forecast that Hyderabad's growing market share will erode the NCR and Mumbai market share of commercial property. By the end of 2007, Hyderabad will be having 12% of the property market in India, second only to Bangalore.
Taller structures will be now be permitted in Banjara Hills, Jubilee Hills and Nandagiri Hills. The restriction on larger than 10 metre structures has been lifted and developers can build upto 3 floors plus stilt and cellar. Builders are upbeat that this would have investors queue up for the flats which range between Rs. 50 to Rs. 75 lakh. The Andhra government is also considering a proposal to increase the coverage area for smaller plots below 1000 sq. metres to 40%.

As for the residential sector, supply is able to meet the demand, and the western suburbs are undergoing a major transformation. Two integrated townships along the Outer Ring Road at Tellapur and Maheswaram village on 600 acres each under the public-private partnership model will be constructed. In the southern suburbs, most of the development is charecterised by residential layouts and plots.

Appreciation

The The current boom in the realty sector has still not been able to satisfy the growing demand from corporates looking for ready-to-occupy properties. IT and ITes will continue to drive the market, and in the next two years, BPOs and call centres, software offices and back offices for financial institutions will occupy the maximum space. Property consultants expect the upward trend in prices to continue, even as the State Government frees up land in different parts of the city and the outskirts. Land availability will facilitate the creation of corporate office space.

In Begumpet, Panjagutta, Ameerpet and Banjara Hills, the new CBDs of Hyderabad, capital prices range from Rs. 3500 per sq. ft to Rs. 4500 per sq. ft. The old CBD areas in Abids, Koti, Himayathnagar and Nampally have slightly lower rates, as new establishments prefer the new locations. Rentals in prime areas range between Rs. 30 to Rs. 45 per sq.ft per month, while Hitec City commands Rs. 35 to Rs. 38 per sq. ft. Rentals and capital values have firmed up of late, with Ness from Israel, Citigroup TCS and Honeywell moving into the city

Retail is pushing rates up, and top brands on 1.5 million sq. ft will occupy space spread over 12 malls by 2008-09. DLF, Rahejas, IJM, GVK and IVRCL are investing in malls in the city. Rental values for retail spaces range between Rs. 35 to Rs. 60 per sq. ft. per month

2006 witnessed a 15-20% increase in capital and rental values in all the residential micro markets. Upcoming residential projects are Fortune Fields by Indu Projects, Hill County by Maytas and SMR Vinay City by SMR Builders. Rates in Central Hyderabad range between Rs. 3308 to Rs. 4590, but premium neighbourhoods like Jubilee Hills fetch rates between Rs. 16200 to Rs. 21600, per sq. foot.

NRI Real Estate Trends

There has been a surge of Indians returning home, as MNCs find NRIs an attractive resource pool. Among others, Motorola has a rewarding Return to India program for its returnees for the Hyderabad centre.

For those planning to return to India, and settle in Hyderabad, real estate developers have not been found wanting. Omega Shelters is working on a niche project, offering villas for 12 crores in Kompally. The Hyderabad residential property market has a choice of the best luxury apartments that Indian real estate can offer.

Developers are setting new benchmarks, and are confident that if they can match up to the tastes of NRIs, they would be able to face up to the competition posed by international developers setting up operations here through joint ventures.

A growing number of Indian developers are naturally targeting the affluent NRI markets, especially in the Gulf, the UK, the US, Singapore and Hong Kong. NRIs are eager to invest in residential properties here, and earn handsome rentals on them.

Hitec City, Kondapur, Guchibowli, Miyapur, Kukatpalli, Madhapur, Jubilee Hills, Banjara Hills, Somajiguda, and Srinagar Colony are dotted with well- appointed, richly furnished apartments, villas, bungalows for returning Indians. Rolling Meadows is a boutique project coming up at Kokapet, Manchirevula.

Latest Real Estate Projects

Residential

• Small township projects by local developers like Ashoka Builders, recently announced a 250-unit project located 15 kms away from the city, priced at Rs. 80 lakhs.
• Jayabheri group and Aparna groups have also announced independent units ranging from Rs. 60 - Rs. 1.25 crore
• Luxury Apartments by Aliens-Infra at Miyapur, near the Hitec City on 8 acres
• Colonial Tranquil, 2500 Sq.ft apartments located at Begumpet
• Uppal Housing is launching a mixed use development site - commercial and residential complex in Hyderabad
• Colonial Serenity at Banjara hills, 2500 sq. ft apartments
• Colonial Greens - 2300 sq. ft luxury apartments near the Hussain Sagar lake
• Sahara States in Mansoorabad near Vanasthalipuram - 1200 units on 42.3 acres

Commercial

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 current trends continue

• Raheja group has acquired 100 acres in Gundla, Pochampalli
• Divyashree has three ongoing projects in areas ranging from 17 acres to 37.25 acres including a joint venture with Ambience Properties.
• Delhi based DLF has acquired land from the government and will build 3 million sq. ft. commercial space.
• Godrej Properties will be setting up an IT Park on 34 acres of land at Pattancheru, on the Hyderabad-Mumbai NH-9, within APIIC's industrial estate with 6 million sq. ft of IT space
• Ramkey group is venturing into commercial development in the city
• Nagarjuna Construction company will construct a 5-star hotel and mall on a 5 acre plot in Jubilee Hills
• Commercial Blocks at Disukhnagar and Himayatnagar by Colonial Constructions
• Parsvanath has a mall-cum- multiplex, and a hotel project coming up in the city
• Manikya homes has a 200-acre, eco-friendly luxury resort project near Chilkur lake with a business centre, animal park, health club, sports complex and an artificial lake.