Hyderabad has emerged as one of India’s most resilient office markets in 2025, riding on the back of strong technology leasing, robust Grade A absorption, and surging demand for flexible workspaces. Let’s break down the key highlights from the first half of this year.

Surging Tech Leasing

In the first half of 2025, the tech sector drove 2.3 million sq ft of office leasing in Hyderabad, contributing 21% of India’s total tech-sector absorption (10.8 million sq ft across top cities).

While Bengaluru led with 3 million sq ft (28%), Hyderabad firmly held second place—outpacing Delhi-NCR and Chennai. This momentum underscores Hyderabad’s growing stature as a Global Capability Centre (GCC) hub, powered by its strong talent pool, cost advantage, and infrastructure readiness.

Record Grade A Absorption

Q1 2025 was a landmark quarter for Hyderabad, with 4 million sq ft of Grade A office space absorbed. That’s a 30% increase over Q1 2024 and the highest quarterly leasing in the past five years.

Clearly, corporates are doubling down on Hyderabad for long-term expansion, with large-scale occupiers locking in premium space across IT corridors and the Financial District.

Q1 Leasing Snapshot

• Gross leasing volume (GLV): 2.62 million sq ft (111% YoY growth)
• Net absorption: 1.82 million sq ft, led by healthcare, BFSI, and IT
• Madhapur dominance: 55% of all leasing (1.4 million sq ft) concentrated in this submarket
• Vacancy trends: City-wide at 23.1%, but sharply lower in Madhapur (14.4%) compared to peripheral areas (41.8%)

This polarization between core and peripheral markets shows how occupiers continue to prioritize connectivity, ecosystem advantages, and quality of Grade A+ assets.

Q2 Market Highlights

• Gross leasing volume: 1.74 million sq ft
• Net absorption: 1.3 million sq ft
• Demand drivers: Flexible workspace operators led with 47% share, followed by IT-BPM (27%) and BFSI (12%)
• New supply: 0.85 million sq ft added
• Vacancy: Dropped slightly to 22.9% overall
• Tight submarkets: Madhapur at just 11.2% vacancy, while Grade A+ tech parks ran at under 5%
• Rentals: Grew 2% quarter-on-quarter, reflecting sustained demand.

What This Means for Occupiers & Investors

• Occupiers: Core hubs like Madhapur and the Financial District are increasingly tight, pushing rentals upward. Early decision-making and long-term lock-ins are critical to secure quality spaces.
• Investors/Developers: Strong GCC-driven demand and low Grade A+ vacancies highlight opportunities in premium developments. However, peripheral areas need differentiated positioning to attract tenants.
• Flex Space Operators: The segment’s 47% share of Q2 leasing reflects how hybrid models are reshaping Hyderabad’s office market.

The OA View

Hyderabad’s office market is at an inflection point—balancing strong occupier demand with rising rentals and selective supply pipelines. For businesses, the challenge is navigating availability while optimizing costs.

At Office Advisor (OA), our goal is simple: to help you stay ahead of these trends with transparent insights and the best-fit office solutions for your business needs.

Think Office. Think OA.

Aakash Jain

Director