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Hyderabad real estate: Office spaces over 1 lakh sq ft account for 81% of total office leasing in Q1 2026
Hyderabad recorded 3.15 mn sq ft office leasing in Q1 2026, up 21.6% YoY, driven by large deals exceeding 1 lakh sq ft
Hyderabad’s gross leasing volume (GLV) in the first quarter of 2026 has crossed 3.15 million sq ft, up 21.6% year-on-year from 2.59 million sq ft of leasing last year. The surge was driven largely by large office transactions, with deals exceeding 1 lakh sq ft accounting for 81% of the city's total leasing activity during the quarter, according to a Cushman and Wakefield report.
Hyderabad accounted for 14% of India’s total office GLV of about 22 mn sq ft, underscoring its position as one of the country’s key office markets. Leasing activity during the quarter was led by large-sized transactions (over 100,000 sq ft), which accounted for 81% of total GLV, while mid-sized deals (25,000–99,999 sq ft) contributed a further 17%, the report said.
Madhapur remained the dominant office micro-market, attracting 91% of all leasing recorded during the period, it said.
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Vacancy falls as demand outpaces supply
Despite no new office completions in the quarter, Hyderabad's net absorption stood at 2.21 million sq ft, reflecting sustained occupier demand and continuing the momentum seen through 2025, which was the city's strongest post-pandemic year for office space absorption, the report said.
The absence of fresh supply, coupled with healthy absorption levels, pushed citywide vacancy down by 260 basis points year-on-year to 20.22%. Madhapur witnessed particularly tight market conditions, with overall vacancy at 7.5%, while Grade A+ office assets reported a vacancy rate of 4.8%.
Rents continued to rise across key office locations. Hyderabad's average stock-weighted rent increased 11.6% year-on-year to ₹92.2 per sq ft per month, the highest level recorded so far. Madhapur commanded the highest rents at ₹105.5 per sq ft, supported by limited availability and sustained demand. Gachibowli, meanwhile, remained a comparatively cost-effective destination with average rents of ₹72.3 per sq ft, it said.
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Sector-wise, IT-BPM firms led leasing activity with a 36% share, followed by flexible workspace operators at 30%. Banking, financial services and insurance (BFSI) companies accounted for 23% of total leasing as global financial institutions expanded their presence in the city.
Global Capability Centres (GCCs) leased 0.83 MSF during the quarter, representing 26% of total office leasing, reinforcing Hyderabad's position as a major GCC hub. The report attributed the trend to the city's talent pool and mature office ecosystem.
Looking ahead, Cushman and Wakefield said that Hyderabad is expected to add around 11 million sq ft of new office supply during the remainder of 2026, largely concentrated in Gachibowli, with selective additions in Madhapur. A further 20 million sq ft is expected to be delivered between 2027 and 2028, providing capacity for future expansion as occupier demand remains strong.
Veera Babu, executive managing director, Tenant Representation – India at Cushman & Wakefield, said Hyderabad's office market remains well-positioned to sustain leasing momentum, supported by an active demand pipeline of 12–15 MSF currently under discussion, along with growing GCC activity and a steady supply pipeline.
“Sustained absorption has contributed to a steady decline in vacancy levels, with the current quarter marking the lowest level recorded over the past 15 quarters, reflecting continued strength in underlying occupier demand. Incremental supply expected over the coming quarters, along with Hyderabad’s strong talent base and growing GCC presence, should continue to support demand across the market,” he said.
