Hyderabad is seeing unprecedented demand and supply for office space. As per an ICRA report, Hyderabad’s office space market recorded a compound annual growth rate (CAGR) of about 14% between FY18 -FY25. During the same period, India’s top six cities saw an annual 7% growth in the office space market, on a compounded basis.
According to the ICRA report, the city recorded a fresh supply of Grade A 8.4 million square feet of office space in the first three quarters of fiscal year 2025-26. During the same period, the city recorded a net absorption of 8.5 million square feet.
Hyderabad commercial realty momentum to sustain
ICRA said that Hyderabad’s commercial real estate momentum is likely to sustain in the coming years as well. The firm points out that, despite almost 2X supply growth, the city’s real estate market will remain strong, as demand is likely to grow at a similar pace.
ICRA estimates that Hyderabad will see about 18-19 million square feet of new office supply in Q4 FY27. The firm expects the city’s real estate market fundamentals to remain strong in the city, with net absorption likely to be about 83 per cent in Q4 FY27.
Hyderabad outgrows major market
Due to sustained growth over the last 8 years, Hyderabad’s share in the office space market increased to 16 per cent by December 2025, from 13 per cent in March 2021. ICRA says the city’s limited floor space index has enabled developers to build more, boosting office supply in Hyderabad.
Among the key localities of Hyderabad, Hitec City/Madhapur, Gachibowli, and the Financial District are the three major micro-markets, accounting for 63 per cent of the total office supply. The firm said vacancy is set to remain low in Hitech City/Madhapur, with limited new supply in FY27, while Gachibowli and the Financial District are projected to see stable vacancy levels.
Key developer and rental trends
ICRA said that in Hyderabad, absorption was driven by healthy demand from the IT-BPM and BFSI companies. ICRA believes Hyderabad’s strong leasing fundamentals and steady demand outlook should help the market sustain stable operating metrics in the medium term.
Further, ICRA estimates that the top ten developers in Hyderabad collectively hold 58 per cent of the city’s Grade-A office stock as of December 2025.