Hyderabad Sets New Record in Office Market in Q1 2026, GCCs Power Growth

Hyderabad, India – Q1 2026: Hyderabad’s commercial real estate sector witnessed an all-time high in the first quarter of 2026, with office space transactions reaching a record 5.86 million square feet. This marks a significant 48% increase year-on-year from 4 million sq ft recorded in Q1 2025, according to Knight Frank India.

The strong performance places Hyderabad as the second-largest office market in India for the quarter, following Bengaluru, which led with 9.2 million sq ft of office absorption.

Rising Rents and Fresh Supply

Driven by robust demand, office rental values increased by 8% year-on-year, averaging ₹77.5 per sq ft per month. Additionally, the market saw the completion of 2.3 million sq ft of new office space, further strengthening supply.

GCCs Continue to Dominate Demand

Global Capability Centres (GCCs) remained the backbone of Hyderabad’s office market, contributing 43% of total leasing activity. These firms leased 2.5 million sq ft, reflecting a 53% growth compared to the previous year.

Despite global uncertainties, GCCs have maintained steady expansion, reinforcing Hyderabad’s appeal as a key global business destination.

IT Firms and Flexible Workspaces Surge

Third-party IT services companies ranked as the second-largest contributors, accounting for 29% of total leasing, or 1.7 million sq ft—the highest among major Indian cities for this segment.

Flexible workspaces also saw explosive growth, with leasing activity rising 457% year-on-year to 1.42 million sq ft, up from 0.26 million sq ft in Q1 2025. Large corporates, especially GCCs, played a major role in driving this trend.

Industry expert Joseph Thilak of Knight Frank India highlighted that Hyderabad’s growth is broad-based, with multiple sectors contributing rather than reliance on a single industry. He also noted that strong demand has pushed rental values upward.

Residential Market Shows Stability

On the residential front, Hyderabad maintained steady performance during the quarter:

• Total sales: 9,541 units (up 1% year-on-year)
• New launches: 9,975 units
• Average price: ₹8,211 per sq ft (up 9% year-on-year)

Premium Housing Drives Growth

The ₹1–2 crore segment led the market with 4,061 units sold, accounting for 43% of total sales.

However, premium housing segments recorded the fastest growth:

• ₹2–5 crore segment: 2,192 units (36% growth)
• ₹5–10 crore segment: 415 units (46% growth)

Meanwhile, the affordable housing segment (below ₹50 lakh) saw a decline, with sales dropping 29% to 335 units, reflecting a nationwide trend.

Changing Buyer Preferences

Hyderabad continues to show resilience compared to other major housing markets in India, supported by consistent end-user demand. However, there is a noticeable shift toward premium housing, which has reduced demand in the affordable segment.

Conclusion

Hyderabad’s real estate market has demonstrated strong momentum in Q1 2026, with record-breaking office leasing and steady housing demand. The continued expansion of GCCs, rising rental values, and growing preference for premium housing underscore the city’s evolution into a leading real estate and business hub in India.