Jubilee Hills struggles to fulfil realty potential

May 25, 2012 - PRLog -- Apart from being a plush neighbourhood, Jubilee Hills is also touted as a hot commercial destination by both retailers and corporate bigwigs.

Reports by major real estate consultants indicate, despite political unrest and the recession, a spiralling demand for space in this part of town in the last few years.

But while these surveys suggest there has been a robust growth in business in this area, the ground reality seems fairly different. A recent study reveals that about 50% of the commercial space in Jubilee Hills is currently lying unoccupied.

Of the 72 buildings constructed over the last three-four years along Road No36, Jubilee Hills, only 33 boast full occupancy. The rest are either partly-occupied or altogether without tenants. Although the ground floors of most of these buildings have been leased out, pointing to a rush for retail space, the upper storeys have seen few takers, the survey states.

It attributes the slow absorption of office area to the steep rise in demand for IT parks. "Also, most IT clients are looking for fuished spaces, which building owners here are not willing to provide as that entails additional expenses," said D Sreedhar Reddy, president of the National Association of Realtors (NAR-India), while elaborating on the report.

Another deterrent, according to the report, are the high rentals in the core city area which have seen a constant rise over the last two years. While the going rate in IT parks, with air-conditioning and power back-up facilities, is about Rs 35 per square feet (sqft) elsewhere, in Jubilee Hills, rentals have already touched Rs 50 per sqft.

Owners of some properties, the survey reveals, are even quoting a high Rs 100 per sqft for their space. These buildings are not just unfuished but also lack power back-up. However, they enjoy better market value for their location and proximity to the IT hub of Madhapur and to the city centre, which is not the case with SEZs.

"It is impossible for us to lease out space at such cheap rates. All our negotiations so far have failed to work out as clients refuse to pay anything more than Rs 30 per sqft," said Ravi Kumar, the owner of a private building on this stretch.

Visit Hyderabad Local Real Estate News (http://www.hyderabadrealestate.com) for details