Leasing activity records 2.94 million sq ft in Q3 2025

• The Hyderabad office market recorded gross leasing of 2.94 million sq ft in Q3 2025, reflecting the continued strong demand in the market. The Q3 leasing was dominated by IT/ITeS (33.3%), followed by flex operators (30.0%) and consulting businesses (10.7%).
• Net absorption rose 27.6% y-o-y to 1.61 million sq ft, with Hitec City (43.7%) and Gachibowli (39.2%) continuing to dominate the space take-up activity in the city. On a nine-month basis, net absorption was 5.45 million sq ft, up 25.5% y-o-y.

The Hitec City and Gachibowli submarkets witness supply additions in Q3

• With two new completions, 1.24 million sq ft of new supply was added to the market, entirely concentrated in the western IT corridor, with Gachibowli contributing 0.74 million sq ft (59.6%) and Hitec City with 0.5 million sq ft (40.4%).
• The overall vacancy rate in Q3 2025 decreased by 50 bps q-o-q to 25.8%, driven by the strong leasing activity and tenant space take-up that outpaced new supply entering the market during the quarter.

SBD and Hitec City drive rent growth in Q3 2025

• Net effective rents rose 8.9% q-o-q and 26.8% y-o-y to INR 73.9 per sq ft, per month in Q3 2025 on an overall basis, with stronger q-o-q growth seen in the SBD (10.9%) and Hitec City (9.6%) submarkets.
• Capital values at the overall city level kept pace with rents, keeping yields steady.

Outlook: Strong demand to keep vacancy tight in key corridors despite robust supply

• An annual supply of 13-14 million sq ft is anticipated in the near future, driven by Gachibowli, which is also facing potential oversupply. Hitec City is likely to maintain lower vacancy rates due to stronger tenant demand.
• Robust market activity is expected to persist due to ongoing demand from various sectors, including IT/ITeS, BFSI, manufacturing, healthcare and flexible workspace operators.