In the first quarter of 2026, Hyderabad emerged as a significant player in India's commercial real estate landscape, accounting for 14% of the nation’s total office Gross Leasable Value (GLV) of approximately 22 million square feet. A striking feature of this quarter was the dominance of larger office transactions, specifically those exceeding 100,000 square feet, which constituted a remarkable 81% of total office leasing activity. Meanwhile, mid-sized transactions ranging from 25,000 to 99,999 square feet added another 17% to the leasing figures. This trend underscores Hyderabad's growing importance as a hub for large corporations and reflects a robust demand for expansive office spaces.
The Madhapur micro-market continued its reign as the preferred destination for office leasing, attracting an impressive 91% of the total leasing activity during this period. The limited availability of new office spaces, coupled with a healthy absorption rate, has resulted in a notable decrease in citywide vacancy rates, which fell by 260 basis points year-on-year to 20.22%. Particularly, Madhapur experienced constrained market conditions, with an overall vacancy rate of just 7.5%. Grade A+ office spaces in this area reported even lower vacancies at 4.8%, indicating a high demand for premium office real estate.
As demand for office spaces escalated, rental rates in Hyderabad also saw a significant rise. The average stock-weighted rent increased by 11.6% year-on-year, reaching ₹92.2 per square foot per month, marking the highest level recorded to date. Madhapur commanded the highest rents at ₹105.5 per square foot, driven by its limited availability and sustained demand. In contrast, Gachibowli offered more competitive pricing, with average rents at ₹72.3 per square foot, appealing to companies looking for cost-effective solutions without compromising on location.
Sector-wise, IT-BPM firms were the frontrunners in leasing activity, accounting for 36% of the transactions, closely followed by flexible workspace operators at 30%. The banking, financial services, and insurance (BFSI) sector contributed 23% to the total leasing, with many global financial institutions expanding their footprint in the city. Additionally, Global Capability Centres (GCCs) leased approximately 0.83 million square feet, representing 26% of total office leasing, further establishing Hyderabad as a vital GCC hub. According to Cushman and Wakefield, the outlook remains optimistic, with around 11 million square feet of new office supply anticipated throughout the remainder of 2026, predominantly in Gachibowli, and an additional 20 million square feet expected between 2027 and 2028. This projected influx of space will cater to the ongoing demand from occupiers and bolster Hyderabad's position as a key player in the commercial real estate sector.