Hyderabad’s Peripheral Areas Drive Real Estate Growth
Hyderabad’s real estate sector is witnessing a dynamic shift, with peripheral areas around the city rapidly emerging as key growth hubs. This expansion spans multiple asset classes, including office, residential, data centres, industrial facilities, and life sciences infrastructure. The growth is being fuelled by significant infrastructure developments such as the Metro Phase II extension, the proposed Regional Ring Road (RRR), and various industrial corridors.
As the city’s traditional hotspots such as Gachibowli, HITEC City, and Kondapur continue to dominate the real estate landscape, peripheral areas in the North, South, East, and West are steadily gaining traction. According to the latest report by Colliers, ‘Hyderabad: Emerging Real Estate Growth Hotspots’, these regions are projected to account for 12-15% of Hyderabad’s Grade A office stock and 5-10% of the city’s annual office space demand over the next three to five years. In parallel, the residential market in these areas is expected to experience substantial price appreciation, with property values expected to rise by 10-20% within the same time frame. The peripheral areas, particularly the West Periphery micro-market, which includes areas like Kokapet, Neopolis, and Narsingi, are poised for significant commercial growth. This is primarily driven by the price advantage compared to the city’s established IT hubs, as well as the enhancement of metro connectivity, which will improve accessibility. Arpit Mehrotra, Managing Director of Office Services at Colliers India, highlighted that the demand for Grade A office spaces in these peripheral areas is expected to see a substantial increase, with rentals likely to rise by 10-15%. Despite the anticipated rental growth, the price advantage is expected to persist, making these areas attractive to both domestic and global businesses, including Global Capability Centers (GCCs).
The favourable business environment in Hyderabad, aided by policies such as the Information & Communication Technology (ICT) 2.0, the Micro, Small, and Medium Enterprises (MSME) policy, and the Data Center policy, further enhances the appeal of peripheral areas. These policies, combined with relatively affordable real estate prices, are expected to attract significant investment in these emerging markets.
In terms of residential real estate, the areas surrounding Kokapet, Shamshabad, Uppal, and Pocharam are seeing heightened interest from homebuyers, particularly in the affordable and mid-range housing segments. The West Periphery micro-market, thanks to its proximity to the commercial hubs, is seeing a surge in upscale residential developments. Meanwhile, regions like Uppal, Pocharam, and Hayath Nagar in the East Periphery are witnessing a rise in sales, with affordable housing being the primary driver in these areas.
The industrial sector is also experiencing significant momentum in Hyderabad’s peripheral areas. The South Periphery micro-market, which includes Shamshabad, Kothur, and Shadnagar, is set to become a key hub for industrial growth, particularly in the warehousing and logistics sector. This is primarily driven by the city’s growing need for logistics infrastructure, which will be further supported by the development of industrial corridors such as the Hyderabad-Nagpur Industrial Corridor. The North Periphery, which benefits from proximity to existing industrial hubs like Medchal, Kompally, and Shamirpet, is expected to see rising demand for Grade A warehouses, with sectors like third-party logistics (3PL), retail, and electronics likely to lead the demand.
Moreover, Hyderabad’s data centre market is poised for strong growth, driven by both the state’s data centre policy and the updated ICT policy. The South Periphery micro-market is set to become a major digital infrastructure hub, with several operators planning to establish over 350 MW of data centre capacity in the next few years.
The city’s life sciences sector, which has long been a backbone of Hyderabad’s industrial growth, is also benefitting from infrastructure developments in peripheral regions. The North Periphery, home to Genome Valley and other key R&D clusters, is expected to experience substantial growth in real estate activity related to life sciences, innovation, and pharmaceutical industries. This is expected to be further bolstered by government policies encouraging the development of dedicated manufacturing clusters and research centres.
Experts believe that the rapid expansion of Hyderabad’s peripheral areas across multiple real estate sectors signifies a broader trend in the city’s evolution. These areas are becoming crucial contributors to Hyderabad’s real estate landscape, offering diverse investment opportunities across asset classes. As infrastructure improves and government policies remain supportive, these peripheral markets will continue to grow and play an integral role in the city’s real estate development, creating sustainable, eco-friendly spaces that will drive economic growth in the years to come.
