Hyderabad office leasing hits record first-quarter volume rising 21.6 pc
New Delhi, May 19
Hyderabad's office market posted its highest-ever first-quarter gross leasing volume at 3.15 million square feet, marking a 21.6 per cent year‑on‑year rise, a report said on Tuesday.
The report from commercial real estate services firm Cushman & Wakefield said the city accounted for about 14 per cent of India's total office gross leasing volume of roughly 22 MSF in Q1 2026.
Large transactions of 1 lakh square feet or more accounted for 81 per cent of total leasing activity and mid‑sized deals (25,000-99,999 square feet) contributed 17 per cent.
Activity remained highly concentrated in Madhapur, which accounted for 91 per cent of total leasing, highlighting its dominance within the city's office market.
Despite the absence of new completions during the quarter, net absorption remained robust at 2.21 million square feet, sustaining momentum from 2025.
The city recorded its strongest post-pandemic year for absorption in 2025, with a quarterly average of roughly 2.27 MSF.
The combination of no new supply and healthy absorption led to moderation in vacancy levels, with citywide vacancy compressing by 260 basis points YoY to 20.22 per cent. The demand remained particularly strong in Madhapur, where overall vacancy stood at 7.5 per cent, while Grade A+ assets tightened further to an exceptionally low 4.8 per cent.
City's average stock-weighted rent increased 11.6 per cent YoY to Rs 92.2, the highest level recorded to date. Madhapur continued to command a rental premium at Rs 105.5, supported by limited availability and sustained demand.
Meanwhile, Gachibowli's weighted average rent stood at Rs 72.3, retaining a cost advantage and positioning it a preferred alternative destination for occupiers.
From a sectoral standpoint, IT-BPM remained the largest contributor, accounting for 36 per cent of leasing activity, followed closely by the flexible Workspace segment with a 30 per cent share.
BFSI accounted for 23 per cent, driven by global financial institutions expanding and strengthening their presence in the city.
— IANS
Reader Comments
As someone who works in Gachibowli, this makes sense. The IT-BPM and flexible workspace boom is real here. But 91% concentration in Madhapur is alarming — what about other areas like Gachibowli, HITEC City or even the new developments near the airport? Single-point dependency is risky. 😕
Impressive numbers! The fact that 81% of leasing is from large transactions (1 lakh+ sq ft) shows that big corporations are doubling down on Hyderabad. The flexible workspace segment at 30% is interesting — maybe remote work isn't killing offices after all. But that 4.8% vacancy in Grade A+ Madhapur is crazy low!
Arre yaar, this is exactly why Hyderabad is called the next Silicon Valley of India! 💪 But the report also shows a big gap — Madhapur rents are Rs 105.5 while Gachibowli is Rs 72.3. That's a 46% difference! Companies looking to save costs should seriously consider Gachibowli. Also, no new completions but strong absorption means developers aren't building fast enough.
As a Hyderabad native, I'm happy but also concerned. All this growth is great for the economy, but what about the common person? The rental hike will hit small businesses and local shops in these areas. Also, the traffic in Madhapur is already a nightmare — more offices means more congestion unless they improve public transport. Hope the government plans for sustainable growth.
M Michael C The BFSI We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.