Hyderabad’s office real estate market recorded a seven per cent year-on-year growth in 2024, with total office space absorption reaching 7.5 million square feet, according to Anarock’s latest India Office Market Update CY 2024 report. The surge was driven mainly by Grade-A micro-markets such as Hitec City and Banjara Hills, which saw annual increases of six and five per cent, respectively.

The city also witnessed steady rental appreciation, with average office rents rising by five per cent year-on-year to ₹67 per square foot per month—a remarkable 20 per cent increase since 2019. While the IT-ITeS sector remained dominant, its share of total office transactions contracted slightly to 40 per cent. Meanwhile, the Banking, Financial Services, and Insurance (BFSI) and coworking sectors expanded their presence, each increasing by two per cent to reach 23 and 18 per cent, respectively.

However, Hyderabad faced supply-side constraints as new office supply declined by four per cent year-on-year to 12.9 million square feet, compared to 13.4 million square feet in 2023. The imbalance between supply and demand contributed to an all-time high vacancy rate of 26.5 per cent—the highest among the top seven cities in India.

“The rise in vacancy rates can be attributed to several factors—new supply addition of 43.4 million square feet during 2022-24, cautious expansion strategies by IT-ITeS firms amid global economic uncertainties, and the maturation of the market with an enhanced focus on Grade-A properties,” said Peush Jain, Managing Director – Commercial Leasing, Anarock Group.

Despite these challenges, the city’s commercial real estate market remains resilient, supported by consistent absorption levels and increasing sectoral diversification. Hyderabad continues to cement its position as a key business hub, attracting enterprises seeking premium office spaces.

Meanwhile, the National Capital Region (NCR) emerged as the top-performing market among major Indian cities, recording a 61 per cent year-on-year increase in net office space absorption to 9.5 million square feet. This growth was primarily fueled by robust demand from Global Capability Centers (GCCs) and the technology sector.

With evolving sectoral dynamics and sustained demand, Hyderabad’s office market is poised for long-term stability, even as developers navigate shifting economic and corporate expansion trends