Hyderabad was one of the first cities to embrace the Indian IT/ITeS boom and was initially dubbed “India’s Silicon Valley” in the 1990s and early 2000s. The origins of growth began with the establishment of the Hyderabad Information Technology and Engineering Consultancy City (HITEC City) in 1998 in the western part of the city. HITEC City was intended as a hub for the technology industry and was developed by L&T Infrastructure, which provided a mix of Built-to-Suit (BTS) and Multi-Tenanted Space (MTS) facilities for IT occupiers. However, the limited availability of non-litigated land parcels in and around HITEC City and improved infrastructure prompted the government in 2005 to establish the Financial District, a 150-acre dedicated industrial park designed to cater to IT/ITeS and financial firms. The district was formed in the Nanakramguda submarket, which is geographically an extension of HITEC City. Subsequent years saw the development of campuses by large corporates such as ICICI and Franklin Templeton. Between 2005 and 2008, a period of formidable growth, total available commercial office space grew at a Compounded Annual Growth Rate (CAGR ) of approximately 23%, to reach more than 23 million sq. ft., with almost comparable absorption levels.
In 2009 the city’s growth curve was interrupted by protests demanding a separate state, which resulted in political and economic instability and ultimately negatively impacted investment sentiment, leading to the stagnancy of the city’s real estate sector from 2009 until 2014. However, following the passage of The Andhra Pradesh Reorganization Act, 2014 in both houses of Parliament in February 2014 and the creation of the separate state of Telangana, political stability was restored. The announcement of the new Telangana State with Hyderabad as a common capital for both Andhra Pradesh and Telangana for a span of 10 years, coupled with the inherent strengths of the city—including its status as a prominent IT hub, its strong institutional base, supportive government policies, large scale infrastructure initiatives and significant demographic dividend—have propelled economic growth over the past two years. Office stock in the city nearly doubled from over 23 million sq. ft. in 2008 to about 47 million sq. ft. by 2015, representing CAGR of 11%.
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