M A R K E T B E AT

HYDERABAD
Office Q1 2024

Office leasing was good in Q1 with 125% growth y-o-y

During the first quarter of the year, the Hyderabad office market witnessed a healthy gross leasing of 2.5 msf, recording a significant 125% growth on a
y-o-y basis, although it was a 19% decline q-o-q. The leasing activity observed in Q1 surpassed the average quarterly leasing activity recorded in 2023
by 11%, primarily driven by occupiers expansion initiatives. Notably, more than 60% of deals involved smaller-sized office spaces with area
25.1% VACANCY (Q1 2024) requirements below 50,000 square feet, a trend that remained consistent with the quarterly figures recorded in 2023. Net absorption in the Hyderabad
office market remained relatively stable at 1.6 msf, with a slight y-o-y decline of 2%.

2.8 msf NEW COMPLETIONS (Q1 2024) Demand for office space was primarily fueled by the BFSI sector, commanding a 36% share of gross leasing, followed by IT sector with 23% share.
Flexible workspace operators accounted for a significant 20% of the leasing activity in Q1, nearly doubling from the average quarterly volume recorded
in the previous year. The prime submarket of Madhapur dominated leasing activity, accounting for 89% of quarterly office space leasing.

1.6 msf NET ABSORPTION (Q1 2024) Consistent influx of supply results in vacancy rising in Q1
In Q1, nearly 2.9 msf of new supply came into the market, recording a q-o-q decline of 36%. As a result, the overall vacancy rate saw a minor uptick of
57 basis points during the quarter. With no supply in Madhapur submarket in Q1, its vacancy (12.24%) dropped by 253 bps on q-o-q basis. The
estimated influx of ~7-8 msf of new supply expected in 2024 is anticipated to cater to the growing demand in Madhapur submarket. The entire supply
in Q1 was concentrated towards Gachibowli submarket, leading to a 367 basis points rise in vacancy, which stood at 45.92%. Nearly 5.8 msf of new
MARKET INDICATORS OVERALL supply is expected in Gachibowli for the rest of 2024, thus pushing the vacancy rate to an expected 47% by end of 2024.
Q1 2024
Rental values slightly elevated in key markets
12 month In Q1 2024, weighted average rents in Gachibowli remained stable, while Madhapur saw a slight increase. Overall, city-wide market rentals witnessed
Q1 2023 Q1 2024 Forecast a slight uptick compared to the previous quarter, and also marked a 4% growth compared to the same period last year.
Overall
20.74% 25.18% Over the next three quarters, approx. 13 msf of new supply is anticipated in Madhapur and Gachibowli combined, indicating a further increase in
Vacancy
vacancy rates. In Gachibowli submarket, which is already facing a high vacancy rate of ~45%, tenants enjoy favorable rental terms. On the contrary, in
Weighted Average Madhapur, Grade-A landlords command premium rentals as demand remains active, leading to relatively balanced leasing terms.
Net Asking Rents 61 68
(INR/sf/month)

Gross leasing NET ABSORPTION & NEW SUPPLY OVERALL VACANCY & WEIGHTED AVERAGE ASKING RENT
1,113,736 2,509,316
volume (sf) 16.0
80.0 30.00%
14.0
25.00%
12.0 60.0
20.00%
10.0
8.0 40.0 15.00%

6.0 10.00%
20.0
4.0 5.00%
2.0 0.0 0.00%
0.0
2018 2019 2020 2021 2022 2023 Q1 2024 2024F
NET ABSORPTION (MSF) NEW SUPPLY (MSF) WEIGHTED AVERAGE RENTS (INR/SF/MONTH) OVERALL VACANCY(%)
M A R K E T B E AT

HYDERABAD
Office Q1 2024
MARKET STATISTICS
GRADE A WTD. AVG. RENT*
YTD GROSS LEASING PLANNED & UNDER YTD CONSTRUCTION YTD
INVENTORY
SUBMARKET VACANCY RATE (%) ACTIVITY# CONSTRUCTION COMPLETIONS NET ABSORPTION
(SF)
(SF) (SF)^ (SF) (SF)
INR/SF/MO US$/SF/YR EUR/SF/YR

Madhapur 64,266,064 12.24% 2,241,602 11,572,805 0 1,628,044 77 11.15 10.26

Gachibowli 35,798,085 45.92% 267,714 26,946,829 2,921,073 371,798 66 9.55 8.79

Peripheral East 2,258,000 41.77% 0 0 0 0 41 5.93 5.46

Total ## 104,973,078 25.18% 2,509,316 38,519,634 2,921,073 1,605,953 68 9.84 9.06

The report highlights Grade A details only. Certain indicators are historically corrected by the addition/deletion of older / refurbished projects as per grade A classification and accounting for
changes in built-up/leasable areas besides adjusting tenant leases to reflect accurate market conditions.
^ Includes planned & under-construction projects until 2026 Suvishesh Valsan
Net absorption refers to the incremental new space take-up Director, Research Services
*Weighted average asking rental rates for vacant spaces that provide the core facility, high-side air conditioning, and 100% power backup
+91 22 67715555 [email protected]
## Totals include a smaller portion of grade A properties outside the above-mentioned submarkets.
IT-BPM – Information Technology – Business Process Management, BFSI – Banking, Financial Services, and Insurance
Key to submarkets:
Madhapur includes Madhapur, Kondapur, and Raidurg; Gachibowli includes Gachibowli, Nanakramguda, Manikonda Peripheral East includes Pocharam and Uppal;
US$ 1 = INR 82.9 € 1 = INR 90.1
Numbers for the first quarter are based on market information collected until 20 th March 2024

KEY LEASE TRANSACTIONS Q1 2024

PROPERTY SUBMARKET TENANT SF TYPE

Sattva Knowledge Park Tower 2 Suburban (Madhapur) Cigna Healthcare 586,160 Fresh Lease

Sattva Knowledge Park Tower 2 Suburban (Madhapur) Lloyds Bank 213,166 Fresh Lease
cushmanwakefield.com
RMZ Nexity Tower 30 Suburban (Madhapur) Merilytics 168,405 Fresh Lease
About Cushman & Wakefield
Phoenix Aquila Tower B Suburban (Gachibowli) OpenText 46,635 Fresh Lease Cushman & Wakefield (NYSE: CWK) is a leading global commercial
real estate services firm for property owners and occupiers with
approximately 52,000 employees in nearly 400 offices and 60
SIGNIFICANT PROJECTS PLANNED AND UNDER CONSTRUCTION countries. In 2023, the firm reported revenue of $9.5 billion across its
core services of property, facilities and project management, leasing,
capital markets, and valuation and other services. It also receives
PROPERTY SUBMARKET MAJOR TENANT SF COMPLETION DATE numerous industry and business accolades for its award-winning
culture and commitment to Diversity, Equity and Inclusion (DEI),
sustainability and more. For additional information, visit
BSR Tech Park www.cushmanwakefield.com.
Suburban (Gachibowli) NA 1,300,000 Q2 2024
Tower -II
©2022 Cushman & Wakefield. All rights reserved. The information contained within
Aparna Technopolis Suburban (Madhapur) NA 1,700,000 Q2 2024
this report is gathered from multiple sources believed to be reliable. The information
may contain errors or omissions and is presented without any warranty or
The Spire Tower 110 Suburban (Madhapur) NA 1,020,000 Q4 2024
representations as to its accuracy.