Hyderabad Has Highest Vacant Office Stock of 28 Mn sq ft

New Delhi, May 1, 2025: Hyderabad reported 59.0 Mn sq ft of new completions and 48.5 Mn sq ft of absorption since 2020. The trend of new completions surpassing absorption for five consecutive years has led to a significant rise in vacant office stock.

As of Q1 2025, the city has 28 Mn sq ft 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 by 39 per cent in the quarter and 12 per cent over the previous year, reaching 9.50 Mn sq ft 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 per cent 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 per cent in Q1 2024 to 37 per cent in Q1 2025.

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 per cent of the pan-India absorption in Q1 2025 and 36 per cent in the previous quarter.

According to Shrinivas Rao, FRICS, CEO, Vestian, “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.”

Office Market Summary: Q1 2025

Source: Vestian Research

City-wise Analysis

• Bengaluru dominated pan-India absorption with 4.08 Mn sq ft in Q1 2025, closely followed by Mumbai with 3.99 Mn sq ft. Kolkata reported the lowest absorption of 0.23 Mn sq ft during Q1 2025. However, it increased by 44 per cent on year and 289 per cent over the previous quarter.
• Despite a quarterly decline of 3% in value terms, the share of Bengaluru in pan-India absorption increased to 23 per cent in Q1 2025 from 19 per cent a quarter earlier. Similarly, the share of Mumbai also rose marginally by one percentage point to 22 per cent in Q1 2025 despite an 11 per cent decline in value terms.
• Pune reported an annual increase of 276 per cent in absorption with its pan-India share rising from 5 per cent in Q1 2024 to 15 per cent in Q1 2025. Conversely, Chennai witnessed the highest annual drop of 52 per cent with its share declining from 25 per cent to 9 per cent during the same period stated above.
• Bengaluru led the absorption by GCCs among the top seven cities with a 39 per cent share in Q1 2025, registering a 39 per cent QoQ and 119 per cent YoY increase in value terms.
• While Bengaluru led new completions in Q1 2025 with 37 per cent share, Pune followed with 31 per cent share. Bengaluru’s share increased from 21 per cent in the previous quarter whereas Pune’s share rose from 15 per cent.
• New completions in NCR doubled to 2.6 Mn sq ft in Q1 2025 compared to the same period a year ago. It also increased by 44 per cent over the previous quarter.