Hyderabad Leads Office Leasing in Q3 with 5.6 Million Sq Ft as GCC Demand Strengthens
Hyderabad led quarterly office leasing in the July-September period, recording 5.6 million sq ft, a 92 per cent year-on-year increase and 30 per cent of the national total, the report revealed.
The city’s leasing volume during the first nine months reached 13.1 million sq ft, up 50 per cent from 8.8 million sq ft in the same period last year, making it the second-largest office market after Bengaluru.
National office leasing transactions in the third quarter stood at 18.7 million sq ft, registering a 5 per cent year-on-year increase and a 3 per cent rise over the preceding quarter.
Bengaluru remained the largest office leasing market during the January-September period, recording 16.7 million sq ft, accounting for 25 per cent of transactions across the eight cities.
Mumbai followed with 9.9 million sq ft, while Pune recorded 8.8 million sq ft.
The report highlighted the growing contribution of GCCs, flexible workspace operators and India-facing businesses, which offset a decline in leasing by third-party IT and IT-enabled services companies.
GCCs accounted for 41 per cent of total office leasing transactions during the first nine months of 2026, compared with 37 per cent in the corresponding period last year and 31 per cent in 2024. Their transaction volumes rose 10.4 per cent year-on-year to 27.4 million sq ft.
Bengaluru remained the leading destination for GCCs, with 9.8 million sq ft, while Hyderabad recorded 6.2 million sq ft, a nearly 70 per cent increase year-on-year.
Hyderabad accounted for 42 per cent of GCC leasing across the eight markets during the third quarter, when national GCC leasing rose 19 per cent to 6.8 million sq ft.
Flexible workspace operators accounted for 16.1 million sq ft, or 24 per cent of overall leasing, during the nine-month period, registering 14 per cent growth year-on-year.
Hyderabad led this segment with 3.5 million sq ft, followed by Bengaluru with 3.3 million sq ft.
India-facing businesses accounted for 14.3 million sq ft, representing 21 per cent of total transactions, up 3.5 per cent from the previous year.
Mumbai led this segment with 4.6 million sq ft, followed by the National Capital Region (NCR) with 3.3 million sq ft.
In contrast, third-party IT and ITeS companies leased 9 million sq ft, down 36 per cent from 14.1 million sq ft in the corresponding period last year.
Hyderabad recorded the highest leasing volume in this category at 2.9 million sq ft.
New office supply across the eight markets rose 50 per cent to 48.6 million sq ft during the first nine months of 2026, compared with 32.5 million sq ft a year earlier.
Bengaluru accounted for 19.4 million sq ft of completions, while Hyderabad added 9.7 million sq ft. In the third quarter alone, new completions increased 74 per cent year-on-year to 21.5 million sq ft, the report stated.
Office rents rose across all eight markets, with annual growth ranging from 3 per cent to 13 per cent in the third quarter.
Hyderabad recorded an average transacted rent of ₹82 per sq ft per month, up 9 per cent year-on-year and 3 per cent quarter-on-quarter while Kolkata recorded the highest annual rental growth at 13 per cent, followed by NCR at 12 per cent.
The overall office vacancy rate increased marginally to 14.7 per cent in the third quarter from 14.5 per cent a year earlier, reflecting the timing and location of new completions.
Hyderabad’s vacancy rate declined by 150 basis points to 11.8 per cent, while occupied office stock across the country rose 6.8 per cent year-on-year to 917.7 million sq ft.
Shishir Baijal, international partner, chairman and managing director of Knight Frank India, said the market was witnessing a shift in the composition of demand, with GCCs, flexible workspace operators and India-facing businesses expanding their contribution amid global geopolitical uncertainty.
He said rising rents across markets indicated continued strength in underlying demand.
The report said the office market was entering the final quarter of 2026 with sustained leasing activity and a more diversified occupier base.
TNT TS
