Hyderabad Achieves Its Highest-Ever Office Leasing Milestone with 11.4 Million Sq Ft of Business
Hyderabad Achieves Its Highest-Ever Office Leasing Milestone with 11.4 Million Sq Ft of Business
Hyderabad’s office market wrapped up 2025 on a robust note, marked by record-high leasing activity, increasing rental values, and continued strong demand from occupiers.
Hyderabad stood out as one of India’s top-performing office markets in 2025, posting its highest-ever annual leasing levels, driven by sustained demand from Global Capability Centres (GCCs) and technology-focused occupiers. Data from Knight Frank India shows that the city recorded office leasing of 11.4 million sq ft during the year, reflecting a 10 percent year-on-year increase and placing Hyderabad among the five Indian cities to surpass the 10 million sq ft leasing mark.
This strong showing highlights Hyderabad’s expanding role as a strategic business destination within India’s office landscape. GCCs continued to lead demand, accounting for the largest share of leasing activity. In 2025, GCCs alone absorbed 5.1 million sq ft of office space, reinforcing the city’s position as a preferred hub for global companies scaling up research, technology and back-office functions. The trend points to a move toward long-term, value-driven commitments rather than purely cost-led expansion.
Leasing activity remained consistent across both halves of the year, supported by positive macroeconomic conditions and firm occupier confidence. However, new office supply was limited, with completions totaling just 4.3 million sq ft—over 70 percent lower than the previous year. This widening gap between demand and supply tightened the availability of quality office space in key micro-markets.
The restricted supply environment, combined with steady demand, pushed office rentals higher. Hyderabad witnessed a 10 percent annual rise in rents in 2025, among the strongest increases across major Indian cities. Average rentals reached Rs 77 per sq ft per month in the second half of the year, indicating growing landlord leverage amid limited Grade A stock.
Sector-wise, third-party IT services firms increased their presence, supported by the rapid adoption of artificial intelligence and digital transformation globally. Flexible workspace operators also saw steady take-up as companies opted for adaptable office solutions aligned with changing workforce needs.
Grade A office buildings remained the clear choice for occupiers, mirroring national trends. Developments offering modern infrastructure, sustainability features and operational efficiency attracted most of the leasing activity, further strengthening Hyderabad’s appeal to global and institutional tenants.
Despite lower supply additions, vacancy levels stayed stable throughout the year, backed by strong net absorption. This equilibrium helped the city maintain solid market fundamentals even as leasing volumes reached record highs.
In summary, Hyderabad’s office market ended 2025 on a robust note, marked by record leasing, rising rentals and sustained occupier interest. With GCC-driven demand continuing to underpin activity and limited new supply supporting rental growth, the city is well positioned to remain a key contributor to India’s office market momentum in 2026.
