Hyderabad Sees Record Office Leasing in Six Months, GCCs Lead Demand

Hyderabad: Hyderabad recorded its strongest-ever first-half office leasing performance in H1 2026, with transactions touching 7.5 million sq ft, up 29 per cent year-on-year, according to a report by Knight Frank, an international property consultant. The city also saw a sharp decline in vacancy levels despite a robust new supply of office space, reflecting healthy demand-supply dynamics.

Global capability centres (GCCs) remained the biggest demand drivers, leasing 3.4 million sq. ft and accounting for 45 per cent of office absorption. Flex space operators followed with a 27-per cent share, while average office rentals increased seven per cent to Rs 80 per sq ft per month.

Vacancy declined by 296 basis points year-on-year to 11.5 per cent, even as 3 million sq ft of new office space was added during the period, the report said.

On the residential front, Hyderabad maintained steady momentum with the sale of 19,249 housing units, up one per cent year-on-year, while new launches moderated two per cent to 20,466 units. Average residential prices rose seven per cent to Rs 8,258 per sq ft, with Banjara Hills registering the highest appreciation among key micro-markets.

"Hyderabad continues to offer one of the deepest office ecosystems, combining a large skilled talent pool with comparatively competitive occupancy costs,” according to said Joseph Thilak, national director, occupier strategy and solutions (Hyderabad & Chennai), Knight Frank India. “The timely addition of high-quality Grade A office stock will be essential to accommodate future expansion and maintain the city's attractiveness as a leading destination for global and domestic occupiers."