India's commercial real estate sector witnessed a historic peak in 2025, but the story in Hyderabad was one of powerful growth, narrowly missing its own record. According to the latest findings from global real estate consultancy Knight Frank, the city's office market absorbed 11.4 million square feet of space last year, marking a significant 10% increase compared to 2024.
National Highs and Hyderabad's Stellar Performance
The national office market set a new benchmark by absorbing 86.4 million square feet in 2025, a substantial jump from the 71.9 million square feet recorded in the previous year. In this vibrant landscape, Hyderabad emerged as a clear leader. Its transaction volume of 11.4 million square feet placed it just shy of its 2019 peak of 12.8 million square feet.
This performance secured Hyderabad the position of the second-most active office market in India, trailing only Bengaluru, which dominated with 28.7 million square feet of transactions. Hyderabad outpaced other major metropolitan regions, including the National Capital Region (NCR at 11.3 million sq ft), Pune (10.8 million sq ft), Chennai (10.1 million sq ft), and Mumbai (9.8 million sq ft).
Global Capability Centres: The Primary Demand Engine
The driving force behind Hyderabad's robust office leasing activity was the unprecedented expansion of Global Capability Centres (GCCs). The report highlights that GCCs accounted for a staggering 50% of all office space taken up in the city during 2025. This represents a major surge from their 38% share in 2024, underscoring Hyderabad's growing reputation as a preferred hub for global corporations.
Knight Frank identified several major global players that anchored large transactions in the GCC segment. These included financial and professional services giants like Charles Schwab Corporation, Goldman Sachs, and Randstad, alongside media powerhouse Warner Bros. Discovery and technology firm ServiceNow.
Flex Space and IT Sectors Show Strong Momentum
While GCCs led the charge, other segments also displayed vigorous growth. Third-party flex space operators significantly expanded their footprint, capturing a 25% share of the leasing activity. Within this, the managed office segment contributed 21%.
Concurrently, traditional third-party IT firms staged a strong comeback. This segment witnessed a remarkable 42% jump in transaction volumes, increasing its share of Hyderabad's total office leasing to 16% in 2025.
The intense demand, particularly from GCCs and flex players, coupled with constrained supply, exerted upward pressure on rents. The average transacted office rental in Hyderabad rose by 10% year-on-year to reach Rs 77 per square foot per month. This price increase was fueled by a sharp 72% contraction in new office supply, which dropped to 4.3 million square feet in 2025. As a result, vacancy rates tightened, falling to approximately 12% in the latter half of the year.
The data paints a clear picture of a maturing and high-demand market. Hyderabad's strategic focus on attracting global corporations through its GCC ecosystem has paid rich dividends, positioning it as a critical pillar of India's record-breaking office space absorption story.
