Hyderabad's Office Market Sees Highest-Ever First-Quarter Leasing Volume
Hyderabad's office market has achieved its highest-ever first-quarter gross leasing volume of 3.15 million square feet (MSF), marking a 21.6 per cent year-on-year rise, according to a report by Cushman & Wakefield.
Key Highlights:
- 21.6% YoY Rise: The city has seen a significant increase in gross leasing volume, marking its highest-ever first-quarter performance.
- 14% Share of India's Total Leasing Volume: Hyderabad accounted for about 14 per cent of India's total office gross leasing volume of roughly 22 MSF in Q1 2026.
- Large Transactions Drive Leasing Activity: Large transactions of 1 lakh square feet or more accounted for 81 per cent of total leasing activity, while mid-sized deals contributed 17 per cent.
- Madhapur Dominates Office Market: Activity remained highly concentrated in Madhapur, which accounted for 91 per cent of total leasing, highlighting its dominance within the city's office market.
Net Absorption Remains Robust
Despite the absence of new completions during the quarter, net absorption remained robust at 2.21 million square feet, sustaining momentum from 2025.
Grade A+ Vacancy Tightens
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.
Rental Rates Increase
The city's average stock-weighted rent increased 11.6 per cent YoY to Rs 92.2, the highest level recorded to date.
Sectoral Share:
- IT-BPM: Remained the largest contributor, accounting for 36 per cent of leasing activity.
- Flexible Workspace: 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.