The growth in real estate investment cycle in residential sector will soon see revival, with a string of regulations under Real Estate Regulatory Authority to improve the sentiments in the real estate sector.
While the forecast for the sector in the country is getting positive with the economy growing at 7.2%, it looks even better for Hyderabad , says Karvy India Wealth Report 2018.
Investment on student accommodation is expected to yield 10 to 12% rental returns while keeping accommodation affordable to students. Similarly, investment in warehousing spaces are predicted to yield 10 to 14% rental yield, the report said.
Investment in co-working spaces is another area that is catching up under the real estate sector.
Areas like Hi Tech city, Madhapur, Gachibowli and financial district have emerged as major commercial hubs and with IT, digital and e commerce companies announcing huge investments, the average rentals are expected to go up.
Significant improvement
Real estate market of Hyderabad has improved significantly post the political stability and government’s focus towards public infrastructure via metro rail and elevated corridors, the report noted.
The first half of 2018 financial year witnessed growth in real estate and unsold inventory is reduced by 40% year on year and more than 8,000 units have been sold. Further new launches were up by 82% as on September, 2018 compared to that of last year, it said.
Premier areas
The IT-hub areas of Hyderabad- Gachibowli and Hi Tech are the premier areas for commercial estate.
Hyderabad is adding aggressively to the IT workforce and has the highest residential rental yield.
While commercial office space demand is continuously increasing across the top eight cities and vacancy levels dropping near average 10%, Hyderabad stands currently at 8% vacancy level for Grade A office supply.
Rental return
The Karvy Wealth Report 2018 also said that investments into commercial properties are expected to deliver an annual rental return of seven to eight per cent and capital appreciation of six to eight per cent over a five to 10 years time period.
