Hyderabad Strengthens Its Status as India’s Commercial Hotspot; Premium Housing Demand Gains Momentum: Knight Frank India

Varahi media.com online news,Hyderabad, July 3, 2025: According to Knight Frank India’s flagship report India Real Estate: Residential and Office (January–June 2025), Hyderabad continues to emerge as one of India’s most vibrant and fast-evolving real estate markets. The first half of 2025 has showcased a city in transformation, with commercial activity thriving and the residential market witnessing a decisive shift toward premium living.

Hyderabad Office Market Performance (H1 2025):

Hyderabad’s office market kicked off 2025 on a high, with transaction volumes growing by 16% year-on-year to reach 5.9 million sq ft. A key highlight was the dramatic comeback of third-party IT services firms, whose share of total office absorption soared from 11% in H1 2024 to 45% in H1 2025 — an astonishing 396% year-on-year jump. TCS led the way, taking up 1.05 million sq ft, while HCL, Wipro, and Infosys also committed significant new spaces, reaffirming Hyderabad’s appeal as a premier global tech hub.

Other sectors also showed strong presence. Global Capability Centres (GCCs) accounted for 40% of total transactions, ranking Hyderabad third nationally for GCC activity behind Bengaluru and Chennai. Electronics and pharmaceuticals led GCC demand with 46% of deals, while healthcare services (28%) and BFSI (18%) were also prominent. Top names like Apple, Lloyds Bank, McDonald’s, Johnson & Johnson, Amazon, and Salesforce continued to invest and expand in the city.

Meanwhile, new office supply contracted sharply by 72% YoY, with only 1.4 million sq ft of completions during H1 2025, pushing vacancy rates down to 14.4% from 15.1% last year. This supply shortage pushed up rents by 10% across the city, with the Secondary Business District (SBD) seeing an even sharper 11% rise. SBD accounted for 97% of leasing activity, driven by the continued dominance of HITEC City, where Grade A buildings posted the city’s lowest vacancy rates.

Hyderabad Office Market Snapshot (H1 2025):

• Completions: 1.4 mn sq ft (↓ 72% YoY)
• Transactions: 5.9 mn sq ft (↑ 16% YoY)
• Average Rent: INR 75 per sq ft per month (↑ 10% YoY)
• Vacancy Rate: 14.4% (down from 15.1%)

Joseph Thilak, National Director – Occupier Strategy and Solutions (Hyderabad & Chennai), Knight Frank India, noted:

“Hyderabad’s incredible performance reflects its ability to adapt to shifting market dynamics. The 396% surge in third-party IT services absorption proves Hyderabad is not just growing — it is maturing into a sophisticated market that continues to attract global corporations.”

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Hyderabad Residential Market Performance (H1 2025):

On the residential front, Hyderabad maintained its growth path with 19,048 units sold in H1 2025, a modest 3% increase from last year. However, the bigger story lies in the premiumisation trend reshaping the sector. Properties priced above INR 10 million now account for 67% of total sales, up from 62% last year. The INR 10–20 million segment alone captured 45% of sales, posting an 8% annual growth, while the INR 20–50 million segment expanded from 15% to 18% of total sales, an impressive 23% jump.

Average residential prices rose 11% YoY to INR 6,326 per sq ft. While launches dipped by 6% YoY to 20,962 units, premium segments showed robust absorption with significantly shorter sales cycles. For example, homes in the INR 20–50 million bracket averaged just 5.3 quarters to sell, while ultra-luxury homes priced between INR 100–200 million achieved the fastest turnover at only 2.2 quarters thanks to tight inventory and strong demand.

Hyderabad Residential Market Snapshot (H1 2025):

• Launches: 20,962 units (↓ 6% YoY)
• Sales: 19,048 units (↑ 3% YoY)
• Average Price: INR 6,326 per sq ft (↑ 11% YoY)
• Unsold Inventory: 54,458 units (↑ 11% YoY)

Joseph Thilak added:

“Hyderabad’s residential market is evolving in line with the city’s broader economic growth. Buyers are prioritizing quality, viewing their homes as lifestyle investments rather than just shelter. The growth in the INR 20–50 million segment, in particular, shows that affluent buyers want premium amenities and smart features. While recent regulatory checks from HYDRAA have created short-term uncertainty, they are enhancing long-term market health by filtering out questionable projects and protecting serious homebuyers.”

Hyderabad’s real estate market is clearly on an upward path. The city’s commercial sector is benefiting from sustained corporate confidence and a robust IT ecosystem, while residential demand is shifting decisively toward premium offerings. With a thriving economy, growing infrastructure, and world-class employment opportunities, Hyderabad is well-positioned to remain one of India’s leading real estate destinations in the coming years.

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