HYDERABAD: Hyderabad consolidated its position as a leading office market in 2025, driven by strong occupier demand, tightening vacancies and rising rentals, even as new supply remained muted.
According to CBRE, the city saw absorption of about 3.9 million sq ft in Q4 2025 and, along with Bengaluru, accounted for nearly 63% of India’s new office completions during the quarter. Demand was led by technology firms and US-based BFSI companies. Of the 8.5 million sq ft leased by Global Capability Centres (GCCs) in Q4, Hyderabad accounted for 25%, second only to Bengaluru’s 44%.
Hyderabad also contributed 40% of India’s 15.4 million sq ft green-certified office supply in Q4 and held a 20% share of the 16.6 million sq ft of such assets leased nationwide. Knight Frank India said the city recorded about 11.4 million sq ft of leasing in 2025, with over 5.5 million sq ft transacted in the second half. Nationally, office leasing touched a record 82.6 million sq ft, while new completions hit an all-time high of 58.9 million sq ft.
In Hyderabad, Q4 demand was driven by technology (28%), BFSI (21%) and flexible workspaces (18%), with major deals by Tech Mahindra, Hartford Insurance and ADP. New supply stood at just 4.3 million sq ft in 2025, a 72% year-on-year drop, pushing vacancies down in Hitec City, Gachibowli and the Financial District. Rentals rose about 10% year-on-year, among the sharpest increases across major cities, with average rents reaching around `77 per sq ft per month in H2 2025.
City emerging as key AI hub, says Sridhar
IT and Industries Minister D Sridhar Babu on Thursday said Hyderabad is emerging as a leading Artificial Intelligence hub, driven by a strong ecosystem built over the past two years. He was speaking after inaugurating the expansion of the Aiden AI Engineering Centre at Hitec City. He said the supportive policy environment has attracted global companies to Telangana, noting that Aiden AI, which currently employs about 500 professionals, plans to add another 500 jobs over the next two years. Aiden’s HQ is in Princeton, New Jersey.