Hyderabad’s commercial real estate sector witnessed a strong start to 2025, with office space transactions soaring in the first quarter. According to Knight Frank India’s latest report, India Real Estate: Office and Residential (January – March 2025), the city recorded 4 million square feet of office space transactions, marking a 31% year-on-year (YoY) growth—the highest quarterly volume in the past five years.
IT Services Lead Office Space Demand
The surge was largely fuelled by the expansion of third-party IT services, which accounted for 49% of the total office leasing activity. This growth highlights Hyderabad’s increasing prominence as a technology hub and the growing demand for outsourced IT services across global markets.
GCCs Strengthen Presence
Following the IT sector, Global Capability Centres (GCCs) emerged as another major contributor, leasing 1.6 million square feet and capturing a 41% market share. The increasing footprint of GCCs reflects the city’s strategic appeal for multinational corporations seeking efficient and skilled talent pools.
Residential Market Sees Minor Dip Amidst Rising Prices
While commercial real estate soared, Hyderabad’s residential market experienced a slight slowdown in Q1 2025. The city saw 9,459 units sold, reflecting a 1% YoY dip in sales. New project launches also declined by 4% YoY, with 10,661 units introduced during the quarter.
Price Growth Despite Sales Dip
Despite the moderation in volume, housing prices continued on an upward trend. The average weighted price rose by 9% YoY, reaching ₹6,164 per square foot. The ₹1 to 2 crore price segment remained the most popular, accounting for 4,257 units sold, while the ₹2 to 5 crore segment witnessed a 14% YoY growth, indicating increased interest in premium homes.
Expert Insights: Resilience and Momentum
Commenting on the findings, Joseph Thilak, National Director, Occupier Strategy and Solutions at Knight Frank India, stated:
“Hyderabad’s commercial market demonstrated remarkable strength in Q1, fuelled by strong leasing activity from third-party IT firms and GCCs, placing the city among the top transaction hubs. While the residential segment saw a marginal slowdown, the premium housing category exhibited strong momentum, underscoring resilient buyer confidence and the city’s evolving real estate dynamics.”
