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- 5-10% of annual office space demand and 20-25% of new supply is likely to come from peripheral areas of the city over the next 3-5 years
- Average housing prices can increase by 10-20% across West, South, East and North Periphery micro markets
- Peripheral real estate growth to be driven by Metro Phase II extension, proposed Regional Ring Road, industrial corridors and conducive government policies
- IT hub proximity to drive office market in West Periphery; East Periphery to receive maximum boost in residential real estate
- North & South Peripheries to see rise in industrial & warehousing space uptake; Data Centers & Life sciences will also gain traction in peripheral areas
Gurgaon, India, 11 March 2025: Hyderabad’s real estate growth is rapidly expanding beyond its core hubs, with peripheral areas emerging as the city’s new growth frontiers. Fueled by prominent upcoming infrastructure projects such as Metro Phase II extension, proposed Regional Ring Road (RRR) and industrial corridors, Hyderabad’s peripheral areas hold immense growth potential in the coming years. Additionally, supportive government policies such as Information & Communication Technology 2.0, Micro, Small and Medium Enterprises (MSME) policy, Data Center policy etc., conducive business environment, and relatively affordable real estate price points are set to make Hyderabad’s peripheries increasingly attractive for businesses and investors.
While established hotspots in the West & Central Hyderabad will continue to drive real estate activity, peripheral areas including North, South, East and West peripheries are expected to account for 12-15% of Hyderabad’s Grade A office stock and 5-10% of annual office space demand in the next 3-5 years, according to Colliers’ latest report, ‘Hyderabad: Emerging Real Estate Growth Hotspots’. The residential market is also set to witness significant traction, with property prices in the peripheral areas projected to rise 10-20% over the next 3-5 years.
“Hyderabad’s office market continues to mature, driving one-fifth of the demand and over one-fourth of the new supply across the top 6 cities in India during 2024. The city’s peripheral areas are set to enter a transformative growth phase, fueled by upcoming infrastructure projects and supportive government policies. The West Periphery micro-market in particular, including Kokapet, Neopolis, Narsingi etc. is likely to witness heightened commercial activity, driven by price arbitrage compared to established IT hubs of Gachibowli & HITEC City and enhancements in metro connectivity. Both demand and supply of Grade A office spaces are likely to grow multifold in the next few years. Although average rentals in the West Periphery micro market could potentially increase by 10-15% from the current levels, the price arbitrage will persist and continue to be an attractive proposition for domestic & global occupiers, including GCCs.” says Arpit Mehrotra, Managing Director, Office Services, Colliers India.
Upcoming key Infrastructure projects in Hyderabad –
| Project Name | Project Details |
| Metro Phase II
(upcoming) |
Corridor 4- Nagole to Rajiv Gandhi International Airport, Shamshabad; Corridor 5- Raidurg to Kokapet, Neopolis; Corridor 6 – MGBS to Chandrayangutta; Corridor 7- Miyapur to Patancheru; Corridor 8 – LB Nagar to Hayath Nagar
The Phase II of Hyderabad metro project is likely to accelerate real estate development particularly in West, South and East Periphery micro markets |
| Regional Ring Road (RRR) | Proposed 340 km 4-lane road infrastructure project to strengthen existing road network and add new linkages covering Sangareddy, Narsapur, Toopran, Gajwel, Choutuppal, Ibrahimpatnam, Shankarpally, etc.
The RRR will have a long-term impact, supporting the radial expansion of Hyderabad along all peripheral micro markets and will spur real estate development in new growth corridors and satellite towns |
| Industrial corridor Projects | Hyderabad-Nagpur, Hyderabad-Bengaluru, Hyderabad-Warangal Industrial Corridors to be developed under National Industrial Corridor Development Programme
The corridors are likely to have maximum impact in East Periphery, North Periphery and South Periphery micro markets |
Source: Colliers, Industry
Micro market Definition-
Old City includes Charminar, Nampally, Malakpet, Lakdi-ka-pul, Mehdipatnam, Attapur, Towlichowki, Karmanghat, etc.
Central Hyderabad includes Jubilee Hills, Banjara Hills, Ameerpet, Punjagutta, Begumpet, Secunderabad, Somajiguda, Malkajgiri, Alwal, etc.
West Hyderabad includes Kondapur, Kukatpally, Kothaguda, HITEC City, Raidurg, Madhapur, Gachibowli, Financial District, Nanakramguda, Manikonda, etc.
West Periphery includes Narsingi, Kokapet, Neopolis, Mallampet, Gopanpally, Nalagandla, Lingampally, Miyapur, Patancheru, Bandlaguda, etc.
South Periphery incudes Rajendra Nagar, Shamshabad, Adibatla, etc.
East Periphery includes Nagaram, Rampally, Boduppal, Uppal, Pocharam, Nagole, Hayath Nagar, LB Nagar, Ghatkesar, etc.
North Periphery incudes Yapral, Sainikpuri, Jeedimetla, Medchal, Shamirpet, Kompally, etc.
Infrastructure development will be key to urban as well as real estate growth of Hyderabad across asset classes, particularly in peripheral areas of the city.
Anticipated impact in Hyderabad’s peripheral micro markets across key real estate segments over the next 3-5 years
| Real estate segment | High impact micro market & prominent locations |
| Office | West Periphery: Kokapet, Neopolis |
| Residential | West Periphery: Kokapet, Miyapur, Lingampally, Tellapur, Nalagandla
East Periphery: Uppal, Pocharam, LB Nagar, Hayath Nagar |
| Industrial & warehousing | North Periphery: Medchal, Shamirpet, Kompally
South Periphery: Shamshabad |
| Retail | Low-moderate impact across all peripheral micro markets and locations |
| Alternatives | South Periphery: Shamshabad, Tukkuguda
North Periphery: Medchal, Kompally, Shamirpet |
Source: Colliers
Note: Alternatives include data centers, senior living, life sciences, co-living, etc.
Infrastructure upgrades to boost Hyderabad’s commercial real estate; 20-25% of new supply likely to come up in peripheral markets
While existing established markets in Hyderabad such as HITEC City, Raidurg, Kondapur, Gachibowli, Nanakramguda, etc. will continue to drive the office market, peripheral areas are likely to increasingly complement established office micro markets in the next few years. Emerging areas in the city’s periphery are likely to account for 20-25% of Hyderabad’s Grade A new supply, significantly up from a current share of less than 5%. Moreover, areas including Kokapet, Shamshabad, Uppal and Pocharam are expected to see notable rise in Grade A space uptake. Resultantly, peripheral micro markets can contribute up to 10% of Hyderabad’s annual leasing activity in the next 3-5 years. Additionally, Grade A stock in the peripheral areas can increase to 20-25 million sq ft in the next few years, from around 13 million sq ft currently. With heightened demand, average rentals across the four peripheral micro markets, too can rise further by 5-15% in the near-mid-term.
Office market outlook for Peripheral micro markets of Hyderabad in the next 3-5 years
| 2024 | Next 3-5 years | Outlook | |
| Grade A stock | ~13 msf | 20-25 msf | Of the 115.6 msf Grade A office stock in Hyderabad as of 2024, peripheral micro markets accounted for a 11% share. This is likely to increase to 12-15% in the next 3-5 years. |
| Gross absorption | 0.4 msf | 5-10 msf | Share of peripheral micro markets in Hyderabad’s office space demand is likely to increase from 4% in 2024 to 5-10% share in the next 3-5 years. (Hyderabad Grade A space uptake was 12.5 msf in 2024) |
| New supply | Negligible | 10-15 msf | Share of peripheral micro markets in overall new supply is likely to increase from <5% in 2024 to 20-25% share in the next 3-5 years.
(Hyderabad witnessed new supply of 13.7 msf in 2024) |
Source: Colliers
Note: Data pertains to Grade A office buildings only | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed | Emerging peripheral areas include West Periphery, South Periphery, East Periphery and North Periphery micro markets
Micro market-wise office market outlook of peripheral areas in Hyderabad (for the next 3-5 years)
| Micro Market | Stock in msf (2027) | Gross Absorption in msf (2025-27) | New Supply in msf (2025-27) | Rise in Rentals* (2027) |
| West Periphery | ~22 (up from ~10 msf as of 2024) | 2-4 (up from ~1.2 msf during 2022-24) | ~12 (up from ~3 msf during 2022-24) | 10-15% (INR 65/sq ft/month as of 2024) |
| South Periphery | 0.6 (same as 0.6 msf as of 2024) | 0.2-0.5 (up from 0.1 msf during 2022-24) | Refer note below | 5-10% (INR 38/sq ft/month as of 2024) |
| East Periphery | 2.5 (same as 2.5 msf as of 2024) | 0.5-1.0 (up from ~0.1 msf during 2022-24) | Refer note below | 5-10% (INR 46/sq ft/month as of 2024) |
| North Periphery | Minimal impact on office market | |||
Source: Colliers
Note: All data points pertain to Grade A buildings | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed | *WAQ Rents indicate Weighted Average Quoted Rents | Limited Grade A office developments are planned as of now in South, East and North Periphery micro markets
West Periphery likely to see heightened office & residential activity
Office: Driven by proximity to established IT hubs in West Hyderabad, and anticipated infrastructure upgrade in the form of Corridor 5 of Metro Phase II, peripheral areas like Kokapet & Neopolis can witness spillover office space demand in the next few years. Interestingly, majority of the upcoming supply in the micro market already hold pre-LEED certification. Both Grade A office space demand & supply in West Periphery is projected to grow multifold times. Consequently, we can anticipate Grade A office stock in the micro market to double up and reach close to 22 million sq ft in the next 3-5 years.
Residential: Housing prices in the Western Periphery micro market have already surged by over 50% in the last five years, with further increase of 10-15% expected in prominent localities like Kokapet, Neopolis, Nalagandla etc. While upscale residential developments will continue to focus on these areas, affordable & mid-segment housing will gain larger ground in Tellapur, Lingampally, Bandlaguda and Miyapur.
Strong intra-city connectivity to drive real estate developments in South Periphery
Industrial & warehousing: Within the South Periphery micro market, areas like Shamshabad, and adjoining localities such as Kothur & Shadnagar are primed for industrial & warehousing growth, benefiting from manufacturing clusters near Rajiv Gandhi International Airport (RGIA), the upcoming airport metro connectivity and proposed Hyderabad-Bengaluru Industrial Corridor.
Data Centers: Data Center market in Hyderabad is likely to see robust growth in the coming years driven by the State Data Center policy and the updated Information & Communication Technology policy. Leading operators have already announced their expansion plans and are likely to set up more than 350 MW of Data Center capacity in the South Periphery micro market in the next 3-5 years.
East Periphery growth to be driven by affordability & proximity to Tier II Cities
Residential: The upcoming Corridor 8 of the Phase II metro project and the proposed Hyderabad -Warangal Industrial Corridor is likely to spur residential real estate of East Periphery micro market across housing categories including plotted development and luxury villas. Areas such as Uppal, Pocharam, Nagole, Hayath Nagar, LB Nagar, etc. will continue to see strong housing demand amidst improved connectivity, and price arbitrage of 40-50% compared to central areas of the city.
Industrial & warehousing: Existing connectivity to Warangal & Vijayawada and the upcoming industrial corridor are likely to fast-track greenfield project development and catalyse demand for warehouses, logistics hubs, and manufacturing units near Pocharam, Ghatkesar, Rampally, etc. Ancillary industry development in the EV sector can also add to the warehousing demand over the course of the next few years.
“Apart from office and industrial & warehousing segments, Hyderabad’s peripheral areas are experiencing a surge in residential real estate activity. Upscale offerings in Kokapet, Neopolis, and Nalagandla etc. of West Periphery micro market are likely to witness significant traction due to its proximity to established commercial hubs. At the same time, locations within the East Periphery micro market such as Uppal, Pocharam, and Hayath Nagar, can witness an uptick in housing sales across all segments, particularly in the affordable and mid-range categories. Additionally, rental housing in industrial hubs such as Medchal in the North Periphery micro market is set to gain momentum, driven by affordable land prices and demand from industrial workers & migrants.” says Vimal Nadar, Senior Director & Head of Research, Colliers India.
North Periphery to witness traction in industrial & warehousing as well as alternative segments
Industrial & warehousing: The North Periphery micro market, led by proximity to existing industrial hubs in Medchal, Kompally, and Shamirpet and proposed infrastructure projects such as the Regional Ring Road and Hyderabad-Nagpur Industrial Corridor will drive demand for Grade A warehouses in the long-term. The micro market will continue to significantly contribute to Hyderabad’s industrial & warehousing demand driven by Third-party Logistics (3PL), retail and electronics segments. Additionally, with the influx of state-of-the-art warehouses, supply-side constraints can be mitigated to a large extent over the next 3-5 years.
Life sciences: The North Periphery micro market, driven by its proximity to Genome Valley and key R&D clusters, has the potential to complement the city’s life sciences and pharmaceutical industry. Real estate requirements and investments for innovation, research, manufacturing centers, and ‘plug & play’ laboratories are expected to rise further in the coming years. Overall nascent alternative segments such as life sciences can witness quantum growth over the next few years, backed by anticipated segment-specific policies, and incentivization of dedicated manufacturing clusters.
