Hyderabad recorded its strongest-ever first-quarter office leasing in 2026, with gross leasing volume touching 3.15 million square feet, driven by sustained demand from large occupiers, according to real estate consultancy firm Cushman & Wakefield.

The report said Hyderabad posted a 21.6 per cent year-on-year rise in office leasing during the January-March quarter.

The city accounted for 14 per cent of India's total office gross leasing volume of around 22 million square feet during the period.

Large transactions of over 100,000 square feet dominated leasing activity, contributing 81 per cent of the total leasing volume, while mid-sized deals between 25,000 and 99,999 square feet made up another 17 per cent.

The report said leasing remained heavily concentrated in the Madhapur micro-market, which accounted for 91 per cent of total office space leased in the city during the quarter, underlining its continued dominance.

Despite no new office completions in the quarter, the city recorded net absorption of 2.21 million square feet, reflecting continued demand from occupiers.

The strong demand and absence of fresh supply pushed vacancy levels down by 260 basis points year-on-year to 20.22 per cent.

In Madhapur, vacancy stood at 7.5 per cent, while Grade A+ office assets saw vacancy tighten further to 4.8 per cent.

Average office rentals in the city rose 11.6 per cent year-on-year to Rs 92.2 per square feet, the highest recorded so far.

Sector-wise, IT-BPM remained the biggest occupier, accounting for 36 per cent of leasing activity, followed by flexible workspace operators at 30 per cent and BFSI firms at 23 per cent.

Global Capability Centres (GCCs) accounted for 0.83 million square feet of office leasing, or 26 per cent of Hyderabad's total leasing volume, reinforcing the city's growing role as a key GCC hub.

"Hyderabad has seen a strong start to 2026, with gross leasing volumes reaching a new high for the first quarter. The city continues to hold a strong position within India's office market and stands out for its ability to accommodate large occupier requirements, even as availability tightens across several key markets," said Veera Babu, Executive Managing Director, Cushman & Wakefield.

He added that sustained absorption has brought vacancy to its lowest level in the past 15 quarters and that the city remains well-positioned to sustain leasing momentum, supported by a demand pipeline of 12-15 million square feet under discussion.

The report said Hyderabad is expected to receive around 11 million square feet of fresh office supply in the remaining months of 2026, with another 20 million square feet expected between 2027 and 2028.

Published on May 19, 2026