Hyderabad Sets New Record for Office Leasing in Q1 2026
According to a recent report by real estate consultancy firm Cushman & Wakefield, Hyderabad has recorded its strongest-ever first-quarter office leasing in 2026, with gross leasing volume touching 3.15 million square feet.
Key Highlights:
- 21.6% year-on-year rise in office leasing during the January-March quarter
- 14% of India's total office gross leasing volume of around 22 million square feet during the period
- 81% of total leasing volume contributed by large transactions of over 100,000 square feet
- 17% of total leasing volume made up by mid-sized deals between 25,000 and 99,999 square feet
Madhapur Micro-Market Dominates Leasing Activity
The report said leasing remained heavily concentrated in the Madhapur micro-market, which accounted for 91% of total office space leased in the city during the quarter.
Strong Demand and Absence of Fresh Supply
Despite no new office completions in the quarter, the city recorded net absorption of 2.21 million square feet, reflecting continued demand from occupiers.
The strong demand and absence of fresh supply pushed vacancy levels down by 260 basis points year-on-year to 20.22%.
Average Office Rentals Rise 11.6%
Average office rentals in the city rose 11.6% year-on-year to Rs 92.2 per square feet, the highest recorded so far.
Sector-Wise Breakdown
- IT-BPM: 36% of leasing activity
- Flexible Workspace Operators: 30% of leasing activity
- BFSI Firms: 23% of leasing activity
Hyderabad's Growing Role as a GCC Hub
Global Capability Centres (GCCs) accounted for 0.83 million square feet of office leasing, or 26% of Hyderabad's total leasing volume, reinforcing the city's growing role as a key GCC hub.
"Hyderabad has seen a strong start to 2026, with gross leasing volumes reaching a new high for the first quarter. The city continues to hold a strong position within India's office market and stands out for its ability to accommodate large occupier requirements, even as availability tightens across several key markets," said Veera Babu, Executive Managing Director, Cushman & Wakefield.
Future Outlook
The report said Hyderabad is expected to receive around 11 million square feet of fresh office supply in the remaining months of 2026, with another 20 million square feet expected between 2027 and 2028.