Hyderabad Office Space Market 2025

Hyderabad’s office space market in 2025 is a vibrant hub of opportunity, showcasing the city’s rise as a global business powerhouse. With office stock approaching 140 million square feet and a record-breaking absorption of 4 million square feet in Q1 2025, Hyderabad ranks as India’s second-largest office leasing market, just behind Bengaluru. This blog offers an in-depth analysis of the trends, data, and projections shaping this dynamic commercial landscape, from demand drivers and rental patterns to infrastructure impacts and future growth prospects.

The Hyderabad office market roared into 2025 with 4 million square feet absorbed in Q1, a 30% surge from Q1 2024 and the highest quarterly volume in five years. This growth builds on a robust 2024, when the city’s total stock hit 136 million square feet—up from 46 million in 2014—and absorption reached 12.1 million square feet, a 52% leap from 8 million in 2023. By year-end 2025, stock is expected to exceed 150 million square feet, with 40 million square feet of new Grade A supply in the pipeline. Hyderabad now accounts for 15% of India’s office space and over 18% of its green-certified stock, blending scale with sustainability.

Technology and Global Capability Centres (GCCs) propel Hyderabad’s office demand. In Q1 2025, third-party IT services led with 49% of transactions (1.9 million square feet), followed by GCCs at 41% (1.6 million square feet). This mirrors 2024’s trends, where tech firms took 31% of leases (3.8 million square feet) and GCCs claimed 43% (5.3 million square feet). Large deals over 100,000 square feet dominated 67% of Q1 2025 leasing, underscoring the city’s appeal for expansive operations. Flexible workspaces contributed 6% (260,000 square feet), while life sciences and BFSI sectors added 21% and 14% of 2024 uptake, diversifying the tenant mix.

The western corridor—HITEC City, Madhapur, Gachibowli, and Kokapet—hosts 80% of Hyderabad’s office stock, fueled by land availability and connectivity. Gachibowli, with 42% of new completions, faces a 24% vacancy rate, hinting at oversupply, while HITEC City’s Grade A rents climbed 9% to ₹72 per square foot per month in Q1 2025 from ₹65.9, driven by a tight 6% vacancy. City-wide, rents span ₹55-120 per square foot, with premium areas like HITEC City and Raidurg at the top end, offset by affordable fringes like Shamshabad at ₹40-60. Madhapur and the Financial District remain GCC hubs, while Kokapet’s pipeline promises 5-7 million square feet by 2027.

Hyderabad’s ₹10,000 crore infrastructure investments bolster its office market. The Hyderabad Metro Phase II, adding 70 kilometers by 2027, will enhance access to Gachibowli and Kokapet, lifting property values by 18-22%. The Outer Ring Road and Shamshabad Airport upgrades streamline logistics, while 99.9% power uptime and 1 Gbps internet in 85% of Grade A spaces cater to tech demands. Multi-modal logistics parks (MMLPs), part of a national push to reduce logistics costs from 13% to 10% of GDP by 2030, will contribute 5 million square feet of hybrid office-warehouse space, expanding the commercial ecosystem.

A 5,000-square-foot Grade A office in Hyderabad ranges from ₹33-72 lakh annually—₹72 lakh in HITEC City at ₹120 per square foot versus ₹33 lakh in Patancheru at ₹55. Fit-out costs are ₹1,500-2,500 per square foot, with deposits at ₹5-10 lakh. SEZs, leasing 1.5 million square feet in 2024, save 30% on taxes, cutting ₹50-70 lakh yearly for mid-sized spaces. Investment inflows reached ₹231.5 billion in Q2 2024, with 56% targeting logistics-adjacent offices, reflecting a 12% CAGR toward a 200-million-square-foot market by 2030.

Hyderabad’s 24% vacancy rate in 2025, up from 21% in 2023, stems from a 40-million-square-foot supply wave by year-end. Gachibowli’s oversupply may cap rent growth at 3% in HITEC City, with stagnation elsewhere, while global economic uncertainties could slow GCC expansion. Yet, the city’s 9-10 million square feet annual absorption capacity signals resilience, provided developers align supply with demand.

By 2030, Hyderabad’s office stock is projected to hit 200 million square feet—a 1.5x increase—driven by AI, robotics, and EV sectors, alongside Telangana’s infrastructure push. With 60% of 2025 leases pre-committed and a 500,000-strong tech workforce (15% lower attrition than metros), the city offers 24% lower rents and 30% cheaper living costs than Bengaluru. Green leasing (18% of stock) and flexible workspaces will define future growth, making Hyderabad a sustainable, scalable commercial hub.

Hyderabad’s office space market in 2025 shines with 4 million square feet absorbed in Q1, a tech-GCC-driven surge, and a 150-million-square-foot horizon. Balancing premium rents (₹72-120) in HITEC City with affordability elsewhere, and leveraging infrastructure like Metro Phase II, the city offers scale, talent, and value. As it eyes 200 million square feet by 2030, Hyderabad stands as a prime destination for businesses seeking a strategic, future-ready base.