Boom in Hyderabad’s commercial real estate, large institutional investors show interest

Emerging as a lucrative investment option, Hyderabad has been garnering a lot of attention of large institutional investors like Blackstone, Xander and Ascendas India Trust, who are looking forward to capitalize upon the increasing commercial market in the region.

As per the ANAROCK Property Consultants, the city has witnessed a major increase in investments last year, attracting more than $1.1 billion of private equity, a more than three-fold increase in investments compared to the collective previous three year period.

This growth spurt has been majorly largely led by commercial real estate with Xander investing $350 million in Phoenix Group. “The city also surpassed Bengaluru and Chennai, the other two major South Indian cities, in investment inflows,” said Shobhit Agarwal, CEO, ANAROCK Capital.

“Hyderabad is one of the easier places for institutional investors to conduct business. The city has seen a very sharp uptick in leasing in the last four years from 0.4 – 0.5 m sq ft to almost 0.8 m sq ft annually,” said Sanjeev Dasgupta, CEO, Ascendas India Trust. “Hyderabad is one of the important markets for Ascendas,” he added.

Reportedly, around $350 million were raised by Salarpuria Sattva from American private equity firm Blackstone Group between 2016 and 2018 for adding to its commercial portfolio. There was also a major increase in the total development area under the Blackstone-Salarpuria Sattva platform, reaching to 13 million sq ft in Hyderabad.

“Favourable government policy along with unlimited FAR and infrastructure is attracting investors to Hyderabad. We will see investment picking up further in the coming year,” said Bijay Agarwal, MD, Salarpuria Sattva Group.