Hyderabad records 50% rise in office leasing, crosses 13.1 million sq ft in nine months of 2026: Knight Frank

Hyderabad recorded 13.1 million square feet of office leasing during the first nine months of 2026, registering a 50% year-on-year increase and surpassing the full-year leasing volumes recorded in every year since 2018, according to a report by Knight Frank India.

The city recorded transactions covering 8.8 million square feet during the corresponding period in 2025. The leasing volume between January and September 2026 also exceeded the previous full-year high of 12.8 million square feet recorded in 2019.

GCCs account for 47% of Hyderabad total office space transactions

According to the report, global capability centres (GCCs) continued to drive demand, leasing 6.2 million square feet during the nine-month period, a 70% increase over the corresponding period last year. GCCs accounted for 47% of the city’s total office transactions, compared with 42% in the same period in 2025. Hyderabad’s share of India’s GCC leasing also increased to 23% from 15%.

Flexible workspace make for 26% of Hyderabad office space transactions

Flexible workspace operators expanded their presence, with leasing rising 2.5 times year-on-year to 3.5 million square feet. They accounted for 26% of the city’s total office transactions, compared with 16% in the corresponding period last year.

Drop in third-party IT services companies’ leasing

Third-party IT services companies leased 2.9 million square feet, accounting for 22% of the total, down from a 36% share in the first nine months of 2025. India-facing businesses accounted for 0.5 million square feet, or 4% of total leasing.

Leasing activity remained strong through the third quarter of 2026. Hyderabad recorded 5.9 million square feet of transactions in the first quarter, its highest quarterly volume since 2018, followed by 1.7 million square feet in the second quarter and 5.6 million square feet in the third quarter. Leasing in the July-September quarter increased 92% year-on-year, accounting for 30% of transactions across the eight major office markets in the country during the period.

New office space supply also increased substantially. Completions reached 9.7 million square feet during the first nine months of 2026, more than three times the 3 million square feet delivered in the corresponding period last year. The third quarter alone accounted for 6.7 million square feet of new supply.

Despite the increase in new supply, the vacancy rate declined to 11.8% in the third quarter of 2026, from 13.3% a year earlier, indicating continued absorption of available office space.

Average transacted office rents rose 9% year-on-year to ₹82 per square feet per month in the third quarter, compared with ₹75.50 in the corresponding period last year. Grade A office space accounted for 97% of all transactions during the first nine months, reflecting the preference for premium-quality office premises.