Why Hyderabad is the Go-To Destination for Commercial Office Spaces?
Hyderabad has emerged as one of India's fastest-growing commercial real estate markets, driven by a combination of business-friendly policies, robust infrastructure, and a thriving talent pool. In 2024, the demand for Grade A office spaces surged to 12.3 million square feet, marking a 21% growth, and the office market saw a 40% rise in gross leasing volume in the first half of 2024, surpassing 5 million square feet, positioning it among the top three leasing destinations in India. This remarkable rise has turned the city into a preferred hub for companies in IT, BFSI, and life sciences.
The city's infrastructure has been a key factor in its transformation into a business hub. Areas like Hitech City, Madhapur, and Gachibowli have emerged as prime business districts, supported by improved connectivity through the Outer Ring Road (ORR) and the expanding metro rail network. Madhapur led leasing activity in 2024, accounting for 83% of transactions due to its proximity to IT parks and well-established social infrastructure. Meanwhile, Gachibowli is fast emerging as the next business hotspot with a 3.6 million square feet increase in leasing activity, fueled by its growing infrastructure and availability of premium office spaces at competitive rates. The Phase 2 expansion of Hyderabad Metro Rail, adding 63 km to the network, will further boost connectivity and enhance Gachibowli's appeal as a commercial destination.
Sectoral growth has also fueled demand for office spaces. While the IT-BPM sector remains dominant with 36% of leasing activity in 2024, the BFSI sector is catching up fast, contributing 29% of total transactions. Meanwhile, the life sciences and pharmaceutical industries accounted for 32% of new office space requirements, highlighting the city's expanding role in healthcare and research. This sectoral diversification reduces Hyderabad's reliance on IT and ensures long-term growth by attracting a broader range of businesses.
Despite rapid growth, Hyderabad's commercial real estate market faces a potential oversupply challenge. By March 2026, office space occupancy could dip to 75.5-76% as the city adds around 40 million square feet of Grade A office space by the end of 2025. While this may create short-term concerns, the long-term outlook remains positive. In 2024, Hyderabad recorded a 10.13% increase in office space absorption-the highest among India's top metropolitan markets-reflecting strong demand and solid economic fundamentals.
Investor-friendly government initiatives have further boosted the city's real estate appeal. Policies like TS-iPASS, which provides single-window clearances, and RERA compliance have enhanced transparency and simplified business setup processes. The average rental rate for Grade A office spaces in Hyderabad is around ₹60-70 per square foot per month, making it comparatively cheaper than other major Indian cities like Bengaluru, where rates can be higher at ₹80-100 per square foot per month. These factors, coupled with Hyderabad's affordability compared to cities like Bangalore and Mumbai, have made it a top choice for domestic and international companies looking to expand in India.
Hyderabad's growing corporate ecosystem, rising FDI inflows, and continuous infrastructure improvements make it a business powerhouse. With its competitive office space offerings, skilled workforce, and supportive policies, the city is poised to remain a preferred destination for commercial real estate investments in 2025 and beyond. If you're considering expanding your business or investing in this fast-evolving market, now is the perfect time to explore the opportunities Hyderabad has to offer.
