Spotlight on Success: Hyderabad and Bengaluru Lead Office Space Demand in India

Mar 25, 2024


The real estate landscape in India has been a dynamic arena, constantly evolving with changing trends and economic landscapes. However, the first quarter of 2024 has set a new precedent, showcasing a remarkable surge in commercial office space demand, particularly in the southern cities of Bengaluru and Hyderabad. In this blog, we delve into the intricacies of this real estate boom, examining the factors driving the growth, analyzing major deals, and projecting the future trajectory of these burgeoning markets.

Bengaluru's Emergence as a Frontrunner:

Historically, Bengaluru has been hailed as the Silicon Valley of India, housing a plethora of technology giants and startups. However, the first quarter of FY24 witnessed a significant shift in the real estate paradigm, with Bengaluru emerging as a frontrunner in commercial office space demand. This shift can be attributed to several factors, including the city's robust infrastructure, skilled workforce, and favorable business environment.

Moreover, the surge in major real estate deals in Bengaluru underscores its growing prominence in the commercial real estate sector. Companies like Tablespace, Samsung, ANSR, and TATA Agratas have leased large floor spaces, signaling confidence in the city's potential as a commercial hub.

Related: Navigating the World of Commercial Real Estate for Investors and Entrepreneurs

Hyderabad's Growing Prominence:

While Bengaluru has long been the flagbearer of India's tech industry, Hyderabad has been quietly making strides, carving a niche for itself in the commercial office space market. In Q1 FY24, Hyderabad continued to strengthen its position as a prominent commercial office market, attracting occupiers from diverse sectors such as Healthcare & Pharma and Technology.

The city's considerable price arbitrage compared to other markets, coupled with proactive government policies and continuous infrastructure upgrades, has made Hyderabad an attractive destination for investors and occupiers alike. The trifecta of Hi-Tec City, Gachibowli, and Madhapur emerged as key drivers of leasing activity, further solidifying Hyderabad's position as a burgeoning real estate hotspot.

Also Read: Investing in Hyderabad's Expensive Housing Market: A Blend of Prestige and Financial Wisdom

Government Policies and Infrastructure Upgrades:

One of the driving forces behind the real estate boom in Bengaluru and Hyderabad is the proactive approach of the respective state governments towards policy formulation and infrastructure development. In recent years, both Karnataka and Telangana have implemented investor-friendly policies aimed at fostering a conducive business environment. Furthermore, continuous infrastructure upgrades, including the expansion of metro networks, development of IT parks, and improvement of connectivity, have played a pivotal role in attracting investors and driving demand for commercial office space in these cities. The synergy between government initiatives and private sector investments has created a fertile ground for sustainable growth in the real estate sector.

Office Market Absorption Across Top Cities:

The first quarter of 2024 witnessed a surge in office market absorption across major cities, with Bengaluru and Hyderabad leading the pack. Bengaluru recorded a staggering 4 million sqft absorption, followed closely by Hyderabad with 2.9 million sqft. Delhi-NCR and Mumbai also experienced notable leasing activity, reflecting the overall bullish sentiment in the market. Mumbai, in particular, witnessed a remarkable 90% year-on-year rise in leasing activity, signaling renewed investor confidence in the city's commercial real estate sector. However, it is Bengaluru and Hyderabad that stole the spotlight in Q1 FY24, underscoring their growing significance in India's real estate landscape.

Real Estate Activity in Hyderabad's Key Localities:

The trifecta of Hi-Tec City, Gachibowli, and Madhapur emerged as the epicenter of real estate activity in Hyderabad during Q1 FY24. These localities witnessed over 80% of the Grade A space uptake, showcasing the concentrated demand in key commercial hubs.

The strategic location of these areas, coupled with robust infrastructure and proximity to major IT parks and business districts, has made them highly sought-after destinations for occupiers. As Hyderabad continues to expand its footprint on the global stage, these key localities are poised to play a pivotal role in driving the city's commercial real estate market forward.

Sector-wise Leasing Activity:

The surge in leasing activity in Bengaluru and Hyderabad was driven by key sectors such as Technology, Engineering & Manufacturing, and BFSI. Collectively, these sectors accounted for 58% of total leasing activity across the top 6 cities, underlining their importance in shaping the commercial real estate landscape.

Additionally, the resurgence in demand from Global Capability Centers (GCC) further fueled leasing activity, signaling a renewed focus on expansion and growth among multinational corporations. The robust performance of these sectors bodes well for the future trajectory of the real estate market, laying a solid foundation for sustained growth in the coming years.

Future Outlook and Implications:

As we look ahead, the future of the real estate market in Bengaluru and Hyderabad appears promising. The strong start witnessed in Q1 FY24, coupled with upbeat occupier sentiment and continued infrastructure development, sets the stage for continued growth and expansion.

However, it is essential to remain cognizant of potential challenges, including regulatory changes, economic uncertainties, and geopolitical factors, which could impact market dynamics. Nevertheless, with proactive government policies, burgeoning sectors, and a favorable business ecosystem, Bengaluru and Hyderabad are poised to remain at the forefront of India's real estate boom, driving innovation, growth, and prosperity in the years to come.


In conclusion, the real estate boom witnessed in Bengaluru and Hyderabad during the first quarter of 2024 signifies a paradigm shift in India's commercial office space market. Bengaluru's emergence as a frontrunner, coupled with Hyderabad's growing prominence, underscores the dynamic nature of these cities as hubs of innovation and economic growth. The surge in leasing activity, fueled by proactive government policies, infrastructure upgrades, and sectoral momentum, sets a positive tone for the future trajectory of the real estate sector. As occupier sentiment remains upbeat and key sectors continue to drive demand, Bengaluru and Hyderabad are poised to remain at the forefront of India's real estate landscape.

However, it is imperative to remain vigilant and adaptable in the face of evolving market dynamics and external factors. By fostering collaboration between government, industry stakeholders, and the private sector, we can capitalize on the opportunities presented by this real estate boom and pave the way for sustainable growth and development in Bengaluru, Hyderabad, and beyond.


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