Hyderabad’s office market achieved a record first-quarter gross leasing volume of 3.15 million square feet, marking a 21.6% increase compared to the previous year. The city contributed about 14% of India’s total office gross leasing volume in Q1 2026, totaling around 22 million square feet. Large transactions of 1 lakh square feet or more made up 81% of the total leasing activity, while mid-sized deals ranging from 25,000 to 99,999 square feet accounted for 17%.
Activity in Hyderabad’s office market remained concentrated in Madhapur, representing 91% of the total leasing, showcasing its dominance. Despite no new completions during the quarter, net absorption stood strong at 2.21 million square feet, continuing the momentum from the previous year. In 2025, the city witnessed its strongest post-pandemic absorption year, averaging around 2.27 million square feet per quarter.
The absence of new supply coupled with healthy absorption levels led to a decrease in vacancy rates. Citywide vacancy rates reduced by 260 basis points year-on-year to 20.22%. Particularly in Madhapur, overall vacancy was at 7.5%, with Grade A+ assets experiencing even lower vacancy at 4.8%. Hyderabad’s average stock-weighted rent rose by 11.6% year-on-year to Rs 92.2, reaching a record high. Madhapur commanded a rental premium at Rs 105.5 due to limited availability and sustained demand, while Gachibowli’s average rent stood at Rs 72.3, maintaining a cost advantage.
In terms of sectoral contribution to leasing activity, IT-BPM led with 36%, closely followed by the flexible Workspace segment at 30%. The BFSI sector accounted for 23% of leasing activity, driven by the expansion and strengthening of global financial institutions in the city.
