Hyderabad office market soars 35% as 10 mn sqft leased in 2023

Office Boom in Hyd

• Tech absorbed 24% of new spaces, followed by consulting (15%) and life sciences (14%)
• PepsiCo, Sanofi, and PrimEra secured significant leases
• Surge in smaller leases (<50,000 sq ft) signifies varied demand across different scales
• IT took 66% share, but SEZ (20%) and non-IT (14%) showed growing presence

Hyderabad: Hyderabad’s office market skyrocketed in 2023, fueled by a remarkable 35 per cent surge in space absorption compared to 2022. CBRE South Asia’s Q4 report reveals a staggering 10.1 million sqft leased, marking a significant leap from the previous year’s 7.4 million sqft.

This explosive growth showcases Hyderabad’s robust commercial real estate expansion, with the final quarter alone witnessing a healthy 3.5 million sqft absorption. The city’s vibrant dynamics are further underscored by a thriving supply of 4.5 million sqft office spaces, keeping pace with the insatiable demand.

The report highlights key sectors that played pivotal roles in driving this surge in absorption. The technology sector led the absorption rates with a substantial 24 per cent followed closely by research consulting & analytics at 15 per cent and life sciences contributing 14 per cent.

The report also spotlights notable transactions during Oct-Dec 2023, showcasing significant leases secured within the city. Major corporations such as PepsiCo, Sanofi, and PrimEra Medical Technologies secured substantial spaces, marking significant expansions in Hyderabad’s commercial landscape.

PepsiCo leased an impressive 4,19,300 sqft in Laxmi Infobahn - Block 2 & 4, Sanofi secured 2,80,000 sqft in The Spire - Tower 100, while PrimEra Medical Technologies expanded into 1,48,000 sqft in Capital Park, underlining the diverse and expanding interests of key players in the city’s real estate market.

It’s noteworthy that the surge in Hyderabad’s office space uptake predominantly stemmed from smaller-sized deals, primarily encompassing spaces less than 50,000 sqft, showcasing a varied demand spectrum across different scales within the city.

Further analysis within the report delineates the dominance of the IT segment in absorption, claiming a significant 66per centshare. Additionally, the SEZ segment captured a notable 20per centwhile the non-IT sector secured a commendable 14per centdepicting a well-diversified pattern in Hyderabad’s office space occupancy trends.

This pronounced growth in office space leasing in Hyderabad underscores the city’s robust commercial real estate market, characterized by diversified sectoral interests, a surge in smaller-sized deals, and a strong focus on technology-driven sectors. The findings of the CBRE report highlight Hyderabad’s continued ascent as a preferred destination for businesses seeking dynamic and diverse office spaces in India’s evolving corporate landscape.

The city’s increasing allure in the commercial real estate sector not only reflects its potential for varied industries but also portrays a promising landscape for further expansion and investment, solidifying its position as a key player in India’s thriving corporate ecosystem.