Gross leasing activity in Q2 reached 1.77 million sq ft, up 4.7% y-o-y

• Hyderabad’s gross leasing of 1.77 million sq ft in Q2 2026 was up 4.7% y-o-y. The H1 2026 figure stood at 5.38 million sq ft, up 17.6% y-o-y. Flex dominated Q2 leasing activity with a 41.1% share, followed by BFSI and Tech with 26.6% and 13.4%, respectively.
• Net absorption in Q2 2026 stood at 1.95 million sq ft, up 17.9% y-o-y. The half-yearly figure was 5.04 million sq ft, up 31.5% against the same period last year. Gachibowli led in Q2 2026 with a 49.9% share, followed by Hitec City with a 35.3% share.

New supply totalling 1.33 million sq ft added in Q2

• The addition of 1.33 million sq ft from three project completions in Q2 2026, combined with the removal of select existing stock, brought the city’s total inventory to 144.4 million sq ft.
• With net absorption continuing to outpace supply addition, overall vacancy declined to a 13-quarter low of 22.9%, dropping 70 bps q-o-q. Except for Suburbs Others, all other submarkets witnessed a q-o-q drop in vacancy levels.

Premium grade projects continue to drive rental value growth

• Driven by a robust 5.3% q-o-q and 15.9% yearly increase in Hitec City rents, overall city rents climbed 3.8% q-o-q and 12.4% y-o-y to reach INR 76.3 per sq ft per month in Q2 2026.
• Capital values at the overall city level kept pace with rents, with yields in select submarkets witnessing a marginal drop of 5 bps q-o-q.

Outlook: The city’s prime office corridors to spearhead near-term demand momentum

• While a near-term annual supply pipeline of 16–17 million sq ft poses potential oversupply risks for Gachibowli, where the majority of upcoming supply is concentrated, Hitec City is expected to sustain lower vacancies, driven by continued demand for premium spaces.
• Market activity is expected to remain robust, driven by ongoing demand from key sectors such as GCCs, IT/ITeS, BFSI, healthcare and flexible workspace operators.