Hyderabad’s office market closed 2025 with its highest-ever annual gross leasing, reaching 12.44 million square feet (msf), according to Cushman & Wakefield report. The city’s strong Q4 performance of 5.42 msf nearly doubled Q3 levels and was 25 percent higher year-on-year, reflecting robust occupier demand and confidence in Hyderabad’s IT-led commercial corridors.
Large Deals and GCC Tenants Drive Momentum
Net absorption for the year reached 9.11 msf, up 15 percent from FY2024. Large transactions dominated activity, accounting for 79 percent of Q4 leasing and 59 percent annually. Mid-sized deals contributed 19 percent in Q4 and 36 percent over the year. Gulf Cooperation Council (GCC) tenants played a significant role, representing 34 percent of total leasing in 2025, alongside strong domestic IT-BPM and BFSI demand.
IT-BPM Leads, Flexible Workspaces and BFSI Diversify
Sector-wise, IT-BPM led demand with a 44 percent share in Q4, followed by BFSI at 35 percent and flexible workspaces at 12 percent. Over the full year, IT-BPM accounted for 39 percent of total leasing, while BFSI, flexible workspaces, and healthcare & pharma contributed 20 percent, 15 percent, and 10 percent respectively, highlighting a diversified occupier profile.
Suburban Hubs Continue Dominance
Madhapur and Gachibowli led leasing activity, with Madhapur accounting for 54 percent of Q4 leases and Gachibowli 45 percent. For the year, Madhapur captured 62 percent, with Gachibowli at 36 percent, underscoring the continued preference for Hyderabad’s established IT corridors offering connectivity, infrastructure, and access to talent.
New Supply Concentrated in Gachibowli
Q4 2025 saw 5.51 msf of completions, 70 percent in Gachibowli and 30 percent in Madhapur. Annual completions totaled 8.82 msf, split 56 percent Madhapur and 44 percent Gachibowli. Strong absorption pushed citywide vacancy down to 22.06 percent, while Grade A+ projects tightened further to just 9.1 percent.
Looking forward, FY2026 is expected to add 10.98 msf of new supply, heavily concentrated in Gachibowli (87 percent). Madhapur, already operating at 10.6 percent vacancy and 6.7 percent in Grade A+, is expected to see further tightening as incremental supply remains limited.
Rents Strengthen, Madhapur Leads Growth
Stock-weighted average quoted rents increased 3 percent quarter-on-quarter and 12 percent year-on-year. Madhapur recorded higher growth at 5 percent QoQ, driven by constrained availability in prime projects and sustained interest from large occupiers. Gachibowli continues to attract occupiers seeking cost-efficient large-scale expansions. Upcoming developments along the ORR–Kokapet corridor, metro expansions, and residential growth are expected to enhance long-term appeal.
Outlook for 2026
Hyderabad’s office market enters 2026 with strong fundamentals: record leasing, disciplined supply growth, tight vacancy, and steady rent appreciation. Large deals, GCC tenants, IT-BPM occupiers, and suburban hubs like Madhapur and Gachibowli will continue to shape growth, reinforcing the city as a leading commercial real estate destination.
