Hyderabad’s growing role as a Global Capability Centre (GCC) hub is changing its commercial real estate market, with rents for new Grade A+ offices in Madhapur reaching Rs. 130-180 per sq ft per month. This is now higher than Bengaluru’s Outer Ring Road (ORR), where rents range from Rs. 85-150 per sq ft.
The rise is being driven by Hyderabad’s talent pool, infrastructure and lower operating costs. CBRE data showed quoted office rents increased 2-6% across key IT corridors during the April-June quarter. Cushman & Wakefield expects rents to rise another 7-10% over the next 6-9 months.
“Hyderabad always has been a dollar or sub-dollar kind of a market. This is the first time in the city’s real estate history that rentals have gone beyond the dollar,” said Gipson Paul, managing director, Hyderabad, Cushman & Wakefield.
The rental increase is concentrated in Hyderabad’s western corridor, which remains the city’s most sought-after office location. New GCCs are looking to operate in areas where global companies such as Apple, Microsoft, Amazon, McDonald’s, Sanofi and Warner Bros have already established centres.
Demand for premium office space is keeping the rental growth strong. New supply in these areas is being quickly absorbed. Vacancy is currently around 3%, compared with about 30% across the extended corridor that includes the financial district.
The trend also raises questions about how long Hyderabad can remain a cost-competitive alternative to Bengaluru and other established office markets as GCC expansion continues.
Rental pressure could remain strong, with Anarock estimating 50-70 additional GCCs across sectors over the next year. The city could also see 8-12 million sq ft of additional office demand over the next 3-5 years.
The growing number of companies and employees is also putting pressure on Hyderabad’s infrastructure. Traffic congestion is increasing around prime office areas, creating greater demand for stronger transport infrastructure.
“If infrastructure doesn’t keep pace with Hyderabad’s rapid economic and office-market growth, that could become a challenge,” Gipson said.
Transport authorities have also acknowledged rising congestion and the need to expand roads, junctions and public transport capacity as the metropolitan region grows.
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