Hyderabad: Hitech Hyderabad notched the highest growth in Grade A office space absorption among the top six markets in the country at 56%, with 12.5 million square feet (msft) of space being leased in 2024 as against 8 msft in 2023.
The city accounted for 19% of the total 66.4 msft Grade A space leased in the country during the year, as per realty consulting firm Colliers.
However, Bengaluru clocked the highest space absorption in 2024 with 21.7 msft being leased as compared to 15.6 msft in 2023, marking a 39% increase.
“Grade A office space demand in India broke all past records in 2024, with three out of the six major cities witnessing more than 10 million square feet of annual leasing. New supply also remained above the 50 million square feet mark and kept vacancy levels rangebound. Demand in 2025 can potentially stabilise at elevated levels, and annual space uptake exceeding 60 msft is likely to be the new norm over the next few years,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.
According to Colliers, Hyderabad saw double-digit annual leasing for the first time in 2024, with technology and healthcare sectors together accounting for nearly half the Grade A leasing.
While technology accounted for 33% (4.1 million square feet) of the total Grade A office space leased in the city during the year, healthcare and pharma accounted for 16% (2 million square feet), and flex players took up 14% (1.8 million square feet) of the space in Hyderabad.
According to Joseph Thilak, national director for occupier strategy & solutions (Hyderabad & Chennai), Knight Frank India, Hyderabad’s commercial market is expected to conclude 2024 with one of the highest absorption levels since the pandemic.
“GCCs have remained active, leasing large office spaces throughout the year. Healthcare & Pharma, followed by BFSI, have been the dominant end-use occupiers for GCC-oriented transacted office spaces in Hyderabad, which remains favorable for other segments such as India-facing businesses, flex space operators, and third-party IT services with large office spaces of 1 lakh sq ft and above contributing to over 60% of overall leasing volumes,” Thilak said.
In fact, during Q4 2024, technology and consulting drove nearly 57% of the total Grade A office demand in Hyderabad, as office demand rose 41% to 4.1 million square feet compared to 2.9 msft in Q3 of 2024.
Colliers said the surge in demand saw vacancy levels of Grade A office space dip by 90 basis points (BPS) on a sequential basis in the city while all-India vacancy levels also slid by 80 BPS in 2024.
Hyderabad (13.7 msft) along with Bengaluru (15.2 msft) cumulatively accounted for 54% of the new supply of 53.3 msft in the top six markets during 2024.
