Hyderabad Real Estate: Office Rents Increase by 9% in 2025 Q1

Hyderabad’s commercial real estate sector experienced strong growth in the first quarter of 2025, with office space transactions reaching 4 million square feet, a 31% year-on-year increase. This marks the highest quarterly transaction volume in the last five years. Additionally, office rents rose by 9% to Rs 72 per square foot per month.

The demand for office space was primarily driven by third-party IT services, which accounted for 49% of the leasing activity. Global Capability Centers followed with 41%, leasing 1.6 million square feet. Flexible workspaces made up 6% of the leasing activity, while India-facing businesses accounted for 4%.

In contrast, the residential sector saw a slight decline. Residential sales decreased by 1% year-on-year to 9,459 units. There was also a 4% drop in new project launches, with 10,661 units introduced in the first quarter. Despite the drop in sales and launches, housing prices continued to rise by 9%, reaching an average of Rs 6,164 per square foot.

The mid-to-premium housing segment (Rs 10-20 million) saw the most sales, with 4,257 units sold. The premium housing market (Rs 20-50 million) saw a 14% increase in sales, reflecting strong demand for high-value properties. On the other hand, the below Rs 5 million category saw a sharp 38% drop in sales, while the Rs 5-10 million segment saw a slight 3% increase. The Rs 10-20 million range declined by 1%, and the Rs 50-100 million segment saw a 6% decrease.

Experts noted that Hyderabad’s commercial real estate market showed strong momentum, especially with increased leasing activity from IT service providers and Global Capability Centers. While the residential sector faced slight setbacks, demand for premium housing remained robust.