Hyderabad: Hyderabad has seen demand for grade A offices increased to a record high of 12.3 million square feet (msf) in 2024, outpacing the previous highs of 2019 by almost 21 per cent, said real estate services firm Cushman & Wakefield’s latest office data.
Overall, leasing volume has risen by almost 85 per cent from 2022 and 37 per cent from 2023. The record-breaking numbers demonstrate the dynamic growth of business foundations as well as Hyderabad's growing appeal as a city and its conducive ecosystem.
With around 70 per cent of the market, Madhapur led the demand as usual, followed by Gachibowli at 28 per cent. Interestingly, all the space that was leased was for immediate occupation suggesting that companies are actively planning for imminent growth.
Over half of the demand has come from larger deals (above 1 lakh square feet), which suggests that headcounts are increasing, and Hyderabad is gaining significance in their portfolios. GCCs have anchored the growth with nearly 28 per cent of the demand, supported by talent, expanding infrastructure, cost savings, and a better quality of living compared to other tech cities.
On an annual basis, new completions have decreased by 21 per cent to 10.2 msf. By the end of Q4, the (Grade A+ category buildings) vacancy rate had fallen below five per cent, making it hard for companies to find suitable space moving forward. Grade A office rentals in Madhapur have gone up by 10 per cent annually and have reached `90-95 per sqft per month) for prime properties. Rentals are likely to touch Rs 100 level by H1 2025 due to the space shortage.
Office rentals in Gachibowli have been about Rs 60 to Rs 65 per square foot for the last two years. Upcoming properties in the ORR corridor and Kokapet could offer an additional savings.
“Gachibowli has seen 3.6 msf in leasing activity, nearly doubling from 2023 leasing volume. We expect the momentum to double up in 2025 and 2026 driven by growing connectivity and infrastructure improvements in addition to an abundance of space options and cost savings,” said said Sreekanth Reddy, managing director, Hyderabad at Cushman & Wakefield.
