Office Rents in Hyderabad Rise 9 Per Cent in Q1 2025: Knight Frank
Hyderabad’s office rents jumped 9% YoY in Q1 2025, with total transactions reaching 4 mn sq ft. The residential market saw mixed trends, says Knight Frank.
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The commercial real estate sector in Hyderabad witnessed substantial growth in the first quarter of 2025, with office space transactions reaching 4 million square feet, reflecting a 31 per cent year-on-year increase, according to Knight Frank India’s latest report, India Real Estate: Office and Residential (January - March 2025) Q1 2025. This marks the highest quarterly transaction volume recorded in the last five years. The report also noted a 9 per cent year-on-year rise in average transacted office rents, reaching Rs 72 per square foot per month.
The report highlights the dominance of third-party IT services in Hyderabad’s office market, accounting for 49 per cent of total leasing activity. Global Capability Centers followed closely, occupying 1.6 million square feet and representing 41 per cent of total office space transactions.
Third-party IT services led the leasing activity with 1.9 million square feet, securing 49 per cent of the market. Global Capability Centers leased 1.6 million square feet, taking up 41 per cent of the transactions. Flexible workspaces accounted for 6 per cent with 0.26 million square feet, while India-facing businesses occupied 0.1 million square feet, making up 4 per cent of total transactions.
The residential segment in Hyderabad experienced a slight dip in sales, declining 1 per cent year-on-year to 9,459 units in the first quarter of 2025. New residential project launches also recorded a 4 per cent year-on-year decrease, totaling 10,661 units. However, housing prices continued to rise, with the average weighted price increasing by 9 per cent year-on-year to Rs 6,164 per square foot.
The mid-to-premium housing segment in the Rs 10-20 million range emerged as the leading category, with 4,257 units sold. Additionally, the premium housing segment in the Rs 20-50 million category saw notable growth, recording a 14 per cent year-on-year increase, reflecting strong demand for high-value residential properties.
Sales in the below Rs 5 million category declined by 38 per cent. The Rs 5-10 million category saw a marginal increase of 3 per cent. The Rs 10-20 million segment recorded a 1 per cent decline, while the Rs 20-50 million category rose by 14 per cent. Sales in the Rs 50-100 million range decreased by 6 per cent, and the Rs 100-200 million category declined by 4 per cent.
Joseph Thilak, National Director, Occupier Strategy and Solutions, Knight Frank India, stated that Hyderabad’s commercial real estate sector exhibited strong momentum in the first quarter of 2025, driven by high leasing activity from IT service providers and Global Capability Centers. While the residential sector showed marginal declines in sales and new launches, demand for premium housing remained robust.
