Hyderabad Real Estate Leads in Vacant Office Space with 28 Mn Sq Ft in Q1 2025

Hyderabad has emerged with the highest vacant office space among India’s top seven cities, holding 28 million square feet (mn sft) of unoccupied stock as of Q1 2025. Despite steady demand, the city’s new completions have consistently outpaced absorption over the past five years, resulting in a significant buildup of vacant office inventory.

Since 2020, Hyderabad recorded 59 mn sft of new completions and 48.5 mn sft of office space absorption. In the first quarter of 2025, the city reported 2.6 mn sft of space absorption, a 43% decline compared to the previous quarter. Its share in the national absorption also fell from 21% in Q4 2024 to 15% in Q1 2025.

At the national level, office space absorption rose by 34% year-on-year in Q1 2025, totaling 17.96 mn sft, despite global economic uncertainties. This growth was mainly driven by higher real estate activity in western cities like Mumbai and Pune, whose combined share jumped from 24% in Q1 2024 to 37% in Q1 2025.

Meanwhile, construction of new office spaces slowed down, with new completions falling by 39% quarter-on-quarter and 12% year-on-year, reaching 9.50 mn sft. The slowdown is attributed to limited new supply in Hyderabad and minimal additions in cities such as Chennai, Mumbai, and Kolkata.

Among the major cities:

The IT-ITeS sector remained the top contributor to office space absorption, accounting for 34% of the total national absorption in Q1 2025. The sector’s growth continues to be influenced by the rise of artificial intelligence, while other active sectors include GCCs, BFSI, and flexible workspaces.

Although demand for office space remains strong, Hyderabad’s growing pipeline of new supply may further add to its vacant stock through 2025. The trend highlights the need for more strategic planning to align future supply with actual demand and avoid long-term imbalances in the commercial real estate market.