Hyderabad: Grade A office leasing in the city witnessed a fall of 41 per cent year-on-year (YoY) in Q1 2025, while supply of Grade A office space plunged by 88 per cent y-o-y, according to a report.
Office leasing across the top seven markets remained strong in Q1 2025 at 15.9 million sft, reflecting a 15 per cent year-on-year increase. Bengaluru and Delhi NCR together drove nearly half of the leasing activity during the quarter, while Hyderabad followed Kolkata in recording highest drop in office absorption.
Grade A office leasing in the city dropped by 41 per cent to 1.7 million sftin Q1 (January – March) 2025, compared to 2.9 million sft office space leased out in Q1 2024. New supply during Q1 2025 declined by 88 per cent to 0.3 million sft, as against 2.6 million new Grade A office space supplied in the first quarter of the previous year, Colliers, a real estate service firm said. Amidst limited new supply, growth in rentals was higher in select high activity micro markets such as SBD (Madhapur, Hitec City, Kondapur and Rai Durg) in Hyderabad.
Speaking on office leasing across top seven markets, Arpit Mehrotra, Managing Director, Office Services – India, Colliers, said: “2025 has started on a positive note, with office leasing witnessing a 15 per cent year-on-year growth at 15.9 million sft in the first quarter. Key markets are seeing strong Grade A space uptake, driven by corporate expansions, rising investments in commercial real estate, amidst promising domestic growth prospects. We anticipate the demand momentum to gain pace throughout 2025, fueled by expansionary plans of leading firms across Technology, Engineering & Manufacturing and BFSI sectors.”
Of the 15.9 million sft of Grade A office space demand in Q1 2025, 86 per cent came from conventional workspaces. Flex space leasing, meanwhile, at 2.2 million sft witnessed a 22 per cent y-o-y growth.
While majority of the markets saw a decline in new supply on an annual basis, Delhi NCR and Pune witnessed multifold growth in new completions, as compared to Q1 2024.
Almost 90 per cent of the new supply during Q1 2025 was concentrated in three cities – Bengaluru, Delhi NCR and Pune, the report mentioned. Overall new supply touched 9.9 million sft during Q1 2025, almost at par with the same period last year.
