Hyderabad emerged as a standout performer in India’s Grade A office space leasing market in 2024, achieving an impressive 56% growth. According to realty consulting firm Colliers, the city leased 12.5 million square feet (msft) of Grade A office space, compared to 8 msft in 2023, accounting for 19% of the 66.4 msft total leasing activity across the country.

“Grade A office space demand in India broke all records in 2024, with three of the six major cities witnessing more than 10 million square feet of annual leasing,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers. Despite Bengaluru leading overall leasing volumes with 21.7 msft, Hyderabad’s growth trajectory remains remarkable, driven by its booming technology and healthcare sectors.

Key Drivers of Growth

Technology companies and the healthcare sector were major contributors to Hyderabad’s leasing boom, accounting for 33% (4.1 msft) and 16% (2 msft) of the total leased space, respectively. The flex space sector also gained significant traction, occupying 14% (1.8 msft) of the city’s leased Grade A office space.

“GCCs have remained active, leasing large office spaces throughout the year. Healthcare and pharma, followed by BFSI, have been the dominant end-use occupiers,” said Joseph Thilak, National Director for Occupier Strategy & Solutions, Knight Frank India. Hyderabad’s large-scale office spaces, typically exceeding 1 lakh square feet, contributed to over 60% of the total leasing volume, underlining the city’s strategic importance for multinational corporations and large enterprises.

Rising Demand and Falling Vacancy Levels

Hyderabad’s demand for office space surged further in Q4 2024, with technology and consulting sectors driving 57% of the total Grade A leasing activity. The city saw a 41% quarter-on-quarter growth in leasing, with demand reaching 4.1 msft compared to 2.9 msft in Q3 2024. This robust growth sequentially reduced vacancy levels by 90 basis points (bps), while all-India vacancy levels dropped by 80 bps.

New supply also kept pace with demand, with Hyderabad and Bengaluru collectively accounting for 54% of India’s 53.3 msft of new Grade A office supply in 2024. Hyderabad’s contribution was 13.7 msft, reinforcing its position as a key market for office real estate.

Future Outlook

With demand for office spaces stabilising at elevated levels, Colliers projects that annual space uptake exceeding 60 msft could become the new normal for India over the next few years. Hyderabad’s commercial market is expected to flourish, and active GCCs, healthcare, BFSI, and tech-driven growth support it.

Hyderabad’s impressive growth underscores its potential to remain a major player in India’s office space market, with its dynamic ecosystem attracting both global and domestic players seeking strategic locations for expansion.