Downed shutters and To-Let boards plastered on commercial spaces in prime business areas across the city has left the business community worried. Just when the ill-effects of recession were wearing off, the Telangana-Andhra tussle has dealt a body blow to the real estate sector.
An alarming 30 per cent showrooms have shut down over the past couple of months. The city has begun to resemble a ghost town with big establishments downing shutters as they have been the worst hit. rents of commercial plots have plummeted, and some have sold property in distress sales for meagre sums. Yet, Hyderabad’s business community is thinking twice before investing in new ventures. They prefer to relinquish properties in prominent locations in favour of land that is more reasonable.
Vishwanath K., a member of IFRA and proprietor of Corporate Real Estate, says, despite prices falling by almost 50 per cent there are no takers for large plots. “Now rents in commercial areas have fallen from Rs 120 to Rs 40 per sq feet, but there are hardly any takers.”
He says the tussle over Telangana is to blame along with recession. “While real estate prices in Bangalore, Mumbai and Chennai are finally looking up, the T-tussle has come as an added blow to the city. People are thinking twice about investing in something new. Moreover, nearly three international companies have backed out from setting up shop here,” he points out.
B. Nagarjuna, proprietor of Home Guides that specialises in private and commercial realty, says there is a perceptible change in the market. “The Telangana struggle has indeed spelt bad news for real estate as far as commercial plots are concerned. Bigger establishments in areas like Banjara Hills and Jubilee Hills have suddenly taken a hit with rents becoming too expensive as compared to the footfalls. In fact, many prefer to shift base to other parts of town,” he says.
Smaller establishments are still able to survive and he finds most To-let boards hanging on plots of 5,000 sq feet and above. “Bigger plots have been abandoned. The trend is now towards smaller outlets,” he says.
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