Developments · Commercial
Hyderabad's office market just had its best half ever
7.5 million square feet leased in six months. Global Capability Centres took nearly half of it. This is the single clearest number in the Hyderabad growth story — and the one with the most riding on it.
Most claims about Hyderabad's rise are hard to verify. Office leasing is not. Somebody signs a lease, somebody records the square footage, and three international property consultancies count it independently. It is about as close to a hard number as this city produces.
The number for the first half of 2026 is 7.5 million square feet — the highest first-half leasing Hyderabad has ever recorded, up 29% on the 5.9 million sq ft of H1 2025.
The first quarter alone was 5.86 million sq ft, the largest single quarter in the city's history and a 48% jump on Q1 2025. That placed Hyderabad second among eight major Indian markets, behind Bengaluru's 9.2 million.
Who is actually taking the space
Global Capability Centres — the offshore engineering, analytics and operations arms of multinationals — absorbed 3.4 million sq ft, or 45% of all leasing, up from 40% a year earlier.
That is the structural story. Hyderabad is not filling buildings with Indian IT services firms the way it did in the 2000s. It is filling them with the in-house technology centres of global corporations, which behave differently: longer leases, deeper local investment, higher salaries, and far less inclination to relocate when costs rise.
| Measure | H1 2026 | Change |
|---|---|---|
| Total leasing | 7.5 mn sq ft | +29% YoY |
| Q1 2026 alone | 5.86 mn sq ft | +48% YoY, record quarter |
| GCC absorption | 3.4 mn sq ft | 45% of total, up from 40% |
| New completions | 3.0 mn sq ft | — |
| Vacancy | 11.5% | Down 296 bps YoY |
The vacancy number is the one to watch
Three million square feet of new supply arrived in the half. Vacancy still fell, by 296 basis points year on year, to 11.5%.
That combination — heavy new supply and falling vacancy at the same time — means demand is outrunning construction. It is the condition that precedes rent increases, and it is a considerably better signal than the headline leasing figure, because leasing can be flattered by a handful of large deals while vacancy cannot.
What it means if you are not in commercial property
Two second-order effects matter more to most businesses here than the leasing itself.
Residential demand follows office absorption, with a lag. 3.4 million sq ft of GCC space is roughly tens of thousands of employees who need somewhere to live within a tolerable commute. That pressure lands on the western and north-western corridors first — Gachibowli, Kokapet, Tellapur, and then outward to Bachupally, Miyapur and Mallampet as pricing pushes people further out.
It changes who your customers are. A GCC employee base spends differently from an IT services base: higher disposable income, more services consumption, different retail and schooling expectations. If you run a business serving professionals in this city, the composition of that group is shifting under you.
The honest caveats
Leasing is a lagging indicator of decisions made twelve to twenty-four months earlier. It tells you what companies committed to in 2024 and 2025, not what they will decide in 2027.
GCC concentration is also a genuine risk, not only a strength. At 45% of absorption, Hyderabad's office market is increasingly exposed to a single occupier category driven by global corporate capex cycles. When those cycles turn — and they do — a concentrated market corrects faster than a diversified one.
And a record half is a record half, not a trend. Two more good halves make a trend.
None of that makes the number less impressive. It makes it a number to understand rather than a number to celebrate.
Sources
- Q1 and H1 2026 leasing volumes, GCC share and vacancy — Knight Frank India and Cushman & Wakefield market reports as reported, 2026.
- Comparison with Bengaluru absorption — Knight Frank India eight-city tracking, Q1 2026.
Property consultancy figures differ slightly in methodology and occasionally in totals. Where sources disagreed we have used the more conservative figure.