Highest Grade-A Office Space Vacancy in Hyderabad Amongst India’s Top
Hyderabad city has the highest amount of vacancy in Grade-A office space amongst India’s top 4
IT hubs – Hyderabad, Bengaluru, Pune & Chennai. According to a report published by Anarock,
a real-estate consultancy firm, the city of pearls has the highest vacant Grade-A office space of
any of the 4 IT-hub cities of India. Other city markets of Delhi NCR, Mumbai Metropolitan
Region (MMR) & Kolkata have more than 16% office vacancies despite high office space
demand from non-IT firms, especially those in BFSI (Banking, Financial Services & Insurance)
as well as the manufacturing & industrial sectors.
The report published by Anarock shows that Bengaluru has the highest Grade-A office stock of
16.8 crore sq. ft. & an office space vacancy of 11.25%. Hyderabad has the highest office space
vacancy of 15% (of the 4 IT hubs) but it only has around 8 crore sq. ft. of Grade-A office stock.
Pune has around 6 crore sq. ft. of Grade-A commercial space and has the lowest vacancy level of
the 4 IT cities at 8.5% vacancy. Chennai has around 5.5 crore sq. ft. of Grade-A office space
with vacancy levels around 10.35%.
The relatively low percentage of Grade-A office stock being vacant in most cities can be
attributed to most leasing companies continuing or renewing their leases during the pandemic as
their business was not severely impacted or even grew during Covid-19. Anarock’s report
summarised it as “The cost of re-establishing or taking up new office space is costlier than
holding on to existing leased spaces. Also, real estate costs are largely factored in IT/ITeS
companies’ billing rates, so letting spaces go can lead to a significant change in top-line
projections.”
The IT/ITeS sector thrived during the worst pandemic years of 2020 & 2021. Most companies
operated using work-from-home models, many large & mid-sized companies decided to hold on
to their office leases or renewed them even. The average monthly office rental in India’s top-4 IT
cities is around ₹58 to ₹78 per sq. ft. which is significantly lower than in MMR or Delhi NCR,
where the average monthly office rental ranges between ₹80 to ₹126 per sq. ft.
The other non-IT centric cities in India’s top-7 cities have a vacancy of more than 16% of Grade-
A office space. MMR has around 10.8 crore sq. ft. Grade-A office space stock with 16%
vacancy. Delhi-NCR has the highest vacancy of Grade-A office space stock with 28.5% of its
total 12.8 crore sq. ft. being vacant. Kolkata meanwhile has 2.5 crore sq. ft. of office space of
which 23.5% stock is vacant.
