Hyderabad commercial Grade-A absorption hits 9.4 msft — what buyers want now

Hyderabad's commercial story is no longer one of headline supply. Roughly 11.2 msft of fresh Grade-A inventory came online in the past four quarters; 9.4 msft was leased, leaving the city with a vacancy compression problem rather than the abundance problem it had two years ago. The squeeze is most visible in the IT corridor.

The numbers in one frame

Rentals in Madhapur — which a year ago hovered between ₹72 and ₹78 per square foot — are now routinely transacting above ₹85, with prime towers asking ₹92. Gachibowli has moved from ₹65 to ₹74. Even the secondary nodes (Pocharam, Uppal, Manikonda) have begun to register single-digit rental growth that they last saw in 2019.

The tenant mix is shifting

Five years ago, Hyderabad's tenant base was 70% pure-play IT services. That cohort still leases space, but its share of new absorption has fallen to 32%. The slack — and then some — has been picked up by Global Capability Centres (GCCs) and BFSI back-office expansion. GCCs alone accounted for 47% of new deals in FY26.

“The market that absorbs 9.4 msft in a year is not a market deciding whether to commit to Hyderabad. It's a market that has already committed.”

What buyers ask for has changed

The brief has narrowed. GCC tenants want larger contiguous floor plates (40,000+ sqft), LEED Platinum certification, and within ten minutes of the closest metro station. Three years ago, those were nice-to-haves; in 2026 they are filters. Developers who can deliver this triad command 12–18% rental premiums; those who can't are signing extended free-rent periods to close.

What to watch

Two things. First, the supply pipeline for FY27 — currently 14.7 msft under construction — is back-loaded into H2. Expect rental growth to continue through Q1 2027 before easing. Second, the Madhapur–Kondapur–Raidurg axis is now functionally saturated. The next wave of demand will spill west toward the ORR Gachibowli-W node — which makes Phase III ORR delivery (covered in our other briefing) the single most important infrastructure event for commercial absorption in 2027.