Hyderabad Sees Real Estate Surge in Emerging Hotspots
Hyderabad’s real estate market is undergoing a remarkable transformation, driven by an expansion beyond its established centres. The city’s peripheral areas are swiftly emerging as new growth hubs, with increased demand across various sectors, including office space, residential properties, industrial facilities, data centres, and life sciences. This growth is primarily fuelled by ongoing and upcoming infrastructure projects, including the Metro Phase II extension, the proposed Regional Ring Road (RRR), and the development of industrial corridors.
While traditional hotspots such as West and Central Hyderabad continue to be the focal points of real estate activity, the peripheries—spanning the North, South, East, and West regions—are expected to account for a growing share of the city’s Grade A office stock and residential demand in the coming years. According to the latest report by Colliers, these peripheral areas are set to represent 12-15% of Hyderabad’s Grade A office space and contribute 5-10% of annual office space demand within the next three to five years. Concurrently, property prices in these emerging regions are projected to rise by 10-20%, signalling strong investor confidence. Hyderabad’s office market, one of the fastest-growing in India, is showing signs of maturation. The city currently accounts for about one-fifth of the total office demand and over a quarter of the new office supply across the top six cities in India in 2024. Peripheral areas such as Kokapet, Neopolis, and Narsingi in the West Periphery micro-market are expected to witness a surge in commercial real estate activity. These areas offer a significant price advantage compared to the more established IT hubs of Gachibowli and HITEC City, particularly with enhancements in metro connectivity that will further boost accessibility. Over the next few years, demand for Grade A office space in these peripheral areas is likely to grow multifold, with average rentals projected to rise by 10-15%.
One of the key factors driving this expansion is the city’s supportive government policies, which include incentives such as the Information & Communication Technology (ICT) 2.0 policy, the Micro, Small and Medium Enterprises (MSME) policy, and the Data Center policy. These, combined with Hyderabad’s favourable business environment and relatively affordable real estate, make the city’s peripheries an increasingly attractive proposition for businesses and investors alike. While established markets like HITEC City, Raidurg, Kondapur, and Gachibowli will continue to dominate the office market, peripheral regions are gradually emerging as complementary markets, expected to account for 20-25% of Hyderabad’s Grade A new office supply in the near future—up from a modest 5% currently. Areas such as Kokapet, Shamshabad, Uppal, and Pocharam are likely to witness a significant increase in Grade A office space uptake, with these micro-markets contributing up to 10% of Hyderabad’s annual leasing activity within the next few years. This shift is expected to drive the total Grade A office stock in the peripheries to 20-25 million square feet, a considerable jump from the current 13 million square feet.
Beyond the office sector, the residential market in these peripheral areas is also poised for significant growth. Upscale residential developments in West Periphery areas like Kokapet and Neopolis are attracting buyers due to their proximity to established commercial hubs. Similarly, areas within the East Periphery, including Uppal and Pocharam, are likely to see increased housing activity, especially in the affordable and mid-range segments. The North Periphery, home to industrial hubs like Medchal, Kompally, and Shamirpet, is also witnessing a rise in rental housing demand, driven by affordable land prices and the influx of industrial workers and migrants.
The industrial sector in Hyderabad’s peripheral areas is also undergoing a substantial transformation. The South Periphery micro-market, which includes regions like Shamshabad, Kothur, and Shadnagar, is expected to see robust growth in industrial and warehousing facilities. The North Periphery, benefiting from its proximity to key industrial hubs and the proposed infrastructure projects like the Regional Ring Road, is expected to witness a surge in demand for Grade A warehouses, particularly from sectors such as Third-party Logistics (3PL), retail, and electronics. Hyderabad’s data centre market is another sector set for strong growth, driven by the state’s Data Center policy and the updated ICT policy. Over the next three to five years, the South Periphery is expected to become a key digital infrastructure hub, with major operators planning to establish over 350 MW of data centre capacity. Furthermore, the North Periphery, with its proximity to Genome Valley and other research and development clusters, holds tremendous potential for the life sciences and pharmaceutical industries. The rise of innovation, research, and manufacturing centres, coupled with government incentives, will likely accelerate growth in this sector.
With an expanding array of real estate opportunities across peripheral areas, Hyderabad is fast becoming one of India’s most dynamic cities in terms of urban development. These emerging markets, driven by infrastructure upgrades, favourable policies, and growing demand across multiple sectors, are not only reshaping Hyderabad’s real estate landscape but also positioning the city as a model for sustainable and inclusive urban growth.
