As conventional real estate asset classes are getting back on track after the pandemic, there is a sudden rise in demand for data centres and warehouses.

High Demand for Warehouses & Data Centres

The need for more warehouses and logistics centres have been generated by the forced shift to e-commerce to permit contactless business to meet social distance standards. According to real estate consultancy KnightFrank report, Hyderabad being the distribution hub in Telangana is also seeing increased traction in the warehousing sector.

In recent years, data centres have seen a demand. As the IT sector is Hyderabad's anchor sector, data centres are not a new concept for the city. Telangana is among the very few states that have had an independent data centre policy in India. The government has been successfully promoting its seismologically secure geography and high-quality, cost-effective infrastructure to draw state data centre investment.

Telangana has already earned Rs 25,000 crore investment for upcoming mega projects in the industry's largest IT data centre market. Flipkart recently opened its Hyderabad data centre, its second after Chennai, to support its core operations.

Commercial Space

Between 2014-19, Hyderabad's commercial real estate market saw a 172 percent increase in its transaction volumes. Its share of all Indian sales went up from 11 percent in 2013 to 22 percent in 2019, when the city reported its highest ever transaction volume in the office market of 12.8 million sq.ft, second highest after Bengaluru.

Standout names like Google, Amazon, Microsoft, Apple, Facebook and IKEA are now headquartered in Hyderabad. Although outsourcing of business processes and outsourcing of information processes are still important, captive production and product development functions are now the priority.

Capital Gain

Hyderabad has seen $2.1 billion in private equity investments in real estate during the period from 2015 to 2019 as a part of Telangana's efforts to promote an investor-friendly climate. Approximately 90% of the investments are in the office market, while the rest is distributed between the retail and warehousing segments.

By: Shailaja K