Hyderabad Real Estate Boom: Top MNCs Lease Over 8.7 Lakh Sq. Ft. of Office Space

Hyderabad’s real estate market is witnessing a significant surge with top multinational corporations (MNCs) leasing extensive office spaces in key business hubs. On May 28, 2024, four major companies—Qualcomm India, LTIMindtree, IBM India, and S&P Capital IQ India Pvt Ltd—signed substantial lease agreements, collectively covering over 8.7 lakh square feet of office space in Hyderabad’s IT corridors, specifically in Hitech City and Gachibowli. The total monthly rent for these spaces ranges from Rs 70 lakh to Rs 3.15 crore.

Qualcomm India Leases 4.14 Lakh Sq. Ft.

Qualcomm India Private Limited has secured a lease for over 4.14 lakh square feet in the prestigious business district of Hitech City. The office space spans five floors (18-22) within The Skyview building, one of the most coveted business addresses in the area. The monthly rent for this space is Rs 3.15 crore. Qualcomm has made a significant upfront investment with a security deposit of Rs 16.4 crore. The lease commenced on February 12, 2024, and is set for a duration of five years. Notably, the rent will escalate by 7 percent after the first year and by 15 percent after fifteen years, reflecting the long-term commitment and strategic importance of this location for Qualcomm.

IBM India Leases 1.06 Lakh Sq. Ft.

IBM India Private Limited has leased 1.06 lakh square feet of space in Divyasree Orion, a 26-acre campus situated in the prime area of Gachibowli. This lease agreement involves a monthly rent of Rs 70.23 lakh and a security deposit of Rs 4.21 crore. The leased office space is spread over the 10th and 11th floors of the building. The lease, which began on April 15, 2024, is also for five years, with a stipulated 4 percent rent escalation every five years. This strategic move by IBM underscores its focus on maintaining a strong presence in Hyderabad’s booming tech ecosystem.

S&P Capital IQ India Leases 2.41 Lakh Sq. Ft.

S&P Capital IQ India, a division of S&P Global, has entered into a lease agreement for 2.41 lakh square feet in The Skyview building, Hitech City. The monthly rent for this space is Rs 1.77 crore, with a security deposit of Rs 10.6 crore. The lease commenced on April 1, 2024, and spans five years. Rent escalation is set at 15 percent after two years, indicating the anticipated value growth of this prime real estate. The office space for S&P Capital IQ is located on the 19th, 20th, and 21st floors, providing ample room for the company’s operations.

LTIMindtree Leases 1.09 Lakh Sq. Ft.

LTIMindtree Limited has leased 1.09 lakh square feet within The Skyview building, with a monthly rent of Rs 89.18 lakh. The office units are located on the 14th and 15th floors, with a security deposit of Rs 6.2 crore. The lease commenced on May 1, 2024, for a period of five years, with an annual rent escalation of 5 percent. This leasing decision by LTIMindtree highlights its commitment to expanding its footprint in Hyderabad, leveraging the city’s robust infrastructure and thriving IT sector.

Economic Impact on Hyderabad

The influx of these high-profile MNCs into Hyderabad’s real estate market is a testament to the city’s growing reputation as a global business hub. The significant leasing activities not only reflect the confidence these corporations have in Hyderabad’s infrastructure and business environment but also have far-reaching economic implications. The substantial investments made through security deposits and monthly rents contribute to the local economy, creating a ripple effect that benefits various sectors, including retail, hospitality, and services.

Moreover, the development of these office spaces generates employment opportunities during the construction and operational phases. Local businesses, including suppliers, contractors, and service providers, benefit from increased demand, fostering a vibrant economic ecosystem. The presence of renowned MNCs also enhances the city’s global profile, attracting further investments and business opportunities.

Hyderabad’s Real Estate Growth

Hyderabad’s real estate market has exhibited robust growth between 2021 and Q1 2024. According to ANAROCK Research, approximately 218,800 new residential units were launched, and 154,300 units were sold during this period. In 2023 alone, nearly 76,300 units were launched, and 61,700 units were sold. West Hyderabad, home to the highest concentration of office spaces, has seen even stronger growth, with average residential capital values increasing by 52 percent. The average price per square foot in this region now stands at Rs 7,200, driven by escalating land prices, which have appreciated by over 30 percent in the last three years.

Future Prospects

The sustained demand for office spaces in Hyderabad is indicative of the city’s promising future as a business and technology hub. The strategic leasing decisions by Qualcomm, LTIMindtree, IBM, and S&P Capital IQ signal a long-term commitment to the city, which is likely to attract further investments from other global corporations. The continuous development of infrastructure, including transport, utilities, and urban amenities, further enhances Hyderabad’s appeal as a prime destination for business and real estate investments.

The recent leasing activities by major MNCs in Hyderabad underscore the city’s dynamic growth and its emerging status as a global business hub. The economic impact of these investments is profound, driving demand for quality housing, commercial spaces, and supporting infrastructure. As Hyderabad continues to evolve, it stands poised to attract more investments, fostering a robust and vibrant economic environment.