Hyderabad has maximum vacant office space among major Indian cities

According to the Vestian report, Hyderabad holds 28 mn sft of vacant stock, the highest among the top seven cities and the stock is expected to rise further in 2025 due to a strong pipeline of upcoming supply in the city

Hyderabad: Hyderabad reported 59 mn sft of new completions and 48.5 mn sft of absorption since 2020. However, the trend of new completions surpassing absorption for five consecutive years has led to a significant rise in vacant office stock.

This was revealed in a report released by Vestian, an occupier-focused workplace solutions firm specialising in commercial, residential, industrial, retail and hospitality sectors.

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As of Q1 of 2025, according to the Vestian report, Hyderabad holds 28 mn sft of vacant stock, the highest among the top seven cities.

Despite robust demand, the stock is expected to rise further in 2025 due to a strong pipeline of upcoming supply in the city.

However, pan-India construction activities slowed down by 39 per cent quarter on quarter and 12 per cent over the previous year, reaching 9.50 mn sft in Q1 2025. This slowdown can be attributed to the absence of new supply in Hyderabad and minimal supply additions in Chennai, Mumbai, and Kolkata during Q1 2025.

Conversely, the first quarter of 2025 witnessed sustained leasing activities across the top seven cities amid global macroeconomic uncertainty. As a result, absorption rose 34% in Q1 2025 compared to the same period a year earlier, reaching 17.96 mn sq ft. This can be attributed to the significant increase in real estate activities in the western cities (Mumbai and Pune), with the share rising from 24% in Q1 of 2024 to 37% in Q1 of 2025, Vestian said.

Moreover, the sudden rise of artificial intelligence altered the growth trajectory of the IT industry. This could be substantiated by the continuous dominance of the IT-ITeS sector in the absorption. The sector accounted for 34% of the pan-India absorption in Q1 of 2025 and 36% in the previous quarter.

Shrinivas Rao, CEO, Vestian, said, “India’s office market maintained its growth momentum in Q1 2025, driven by sustained demand across the major office markets in India. Even though the absorption decreased over the previous quarter, demand for office spaces by GCCs, IT-ITeS, BFSI, and Flex Spaces is expected to swell in the forthcoming quarters.”

City-wise Analysis (Q1 2025)

• Bengaluru dominated pan-India absorption with 4.08 mn sft

• Mumbai closely followed with 3.99 mn sft

• Kolkata reported the lowest absorption of 0.23 mn sft

Hyderabad:

• Reported absorption of 2.6 mn sft

• Share decreased by 43% over previous quarter

• Accounted for 15% of pan-India absorption, drop from 21% in Q4 2024