Hinjewadi Fast Emerging As Pune’s Preferred Realty Destination: Savills India

October 5, 2023: Leasing activity in Hinjewadi, Pune, is poised for continued growth, following a positive trend observed in 2022 and the first half of 2023. This momentum is expected to persist throughout 2023, resulting in a cumulative gross absorption of approximately 2.0 million sq. ft. over the next three years, according to the latest report titled ‘Sub-Dollar Rental Office Markets in India’, released by property consultancy firm Savills.

Hinjewadi offers high-quality office spaces at competitive rates, suitable for varied occupier needs. Its expansive campus-style developments cater to tech, life sciences, engineering, and manufacturing, emphasizing sustainable practices, enhancing overall value.

Significantly, Hinjewadi’s contribution to Pune’s total office leasing has nearly tripled in 2022 when compared with 2020. This increased demand is primarily propelled by the IT-BPM, engineering, and manufacturing sectors. Interestingly, Global In-house Centres (GICs), captive centres, and third-party offshoring centres are also playing a substantial role in driving this demand, particularly within IT-SEZ developments.

From Q1 2019 to Q1 2022, Hinjewadi experienced a 50% increase in the number of housing units sold and a substantial 84% surge in terms of their total value. During the period of 2019-2021, Hinjewadi consistently saw an annual average sale of 16,200 units, totalling an average annual value of INR 98 billion.

Key highlights from the report:

• During 2020-2022, the IT-BPM sector was the driving force contributing 64% of the leasing activity in Hinjewadi.
• In absolute terms, office leasing in Hinjewadi has surged fourfold, increasing from 0.17 mn sq. ft. in 2020 to 0.88 mn sq. ft. in 2022.  
• With sub-dollar rents, Hinjewadi offers rental arbitrage of up to 50% vis-a-vis most other key IT markets in India. 
• As of June 2023, GICs and captive centres occupied approximately 15 mn sq. ft. of office space in Hinjewadi. 
• Approximately 90% of the current office stock in Hinjewadi is owned by institutional players.
• All of Embassy Office Parks REIT’s holdings in Pune are centered in Hinjewadi, which accounts for 21% of the Embassy Office Parks REIT’s asset portfolio in India in terms of area.

Naveen Raina, Executive Director and Interim Head, Pune, Savills India said, “Hinjewadi is experiencing remarkable growth, driven by the IT, engineering, and manufacturing sectors. Its appeal lies in sub-dollar office rents, affordable housing, and excellent connectivity. It’s a burgeoning hotspot for businesses and residents alike.”

Arvind Nandan, Managing Director, Research & Consulting, Savills India said, “Hinjewadi is a crucial micro market that is also a vital bridge between the old-world Pune and the modern economic powerhouse that the city has become. Also, it is a key precinct that links Pune city with the highway to Mumbai to the west. Its most crucial avatar though, is that which houses the top tech-companies, with a resourceful and cost-effective real estate solutioning. Bolstered by the strong policy environment, it has been among the topmost tech-markets in the country”. 

Hinjewadi has emerged as a real estate hotspot due to several reasons mainly – sub-dollar office rents, affordable residential rents, robust connectivity and large-scale developments. It is especially attractive to tech and finance industries needing spacious offices. It constitutes about 20% of Pune’s office space as of mid-2023. The recently approved Maharashtra IT-ITES Policy 2023 aims to make Maharashtra a tech hub, building on its existing strengths in finance, entertainment and industry. This policy is expected to create opportunities in Industry 4.0, financial GICs, AVGC industries, etc. This is likely to benefit Pune and particularly Hinjewadi, attracting life sciences, tech and industrial occupiers.