Hyderabad's GCC boom is making its office advantage pricier

Hyderabad: Hyderabad’s rapid expansion as a hub for global capability centres (GCCs) is beginning to reshape the economics of its office market, with rents for new-age Grade A+ buildings in the city’s prime office corridor in Madhapur rising to Rs 130-180 per sq ft a month, surpassing Bengaluru’s Outer Ring Road (ORR), where rents are in the Rs 85–150 per sq ft range.

It comes as Hyderabad continues to attract GCCs on the strength of its talent pool, infrastructure and lower operating costs. CBRE data showed quoted office rentals increased 2-6% across key IT corridors in the April-June quarter, while Cushman & Wakefield expects rents to rise another 7–10% over the next six to nine 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 escalation in rents is concentrated in the city’s western corridor, its most sought-after location. This, according to experts, is because new GCCs coming to India want to be housed in the same areas where global firms such as Apple, Microsoft, Amazon, McDonald’s, Sanofi and Warner Bros have already established their centres.

Hyderabad’s rental growth remains demand-backed, with occupiers prioritising premium spaces, said CBRE chairman and CEO for India, Southeast Asia, Middle East and Africa Anshuman Magazine.

As a result, any new supply there is getting instantly absorbed, further pushing up rents. The current vacancy is around 3%, compared with about 30% in the extended corridor comprising the financial district.

However, the increase in rents raises a larger question for Hyderabad about how long the city can continue to be a cost-competitive alternative to Bengaluru and other established office markets as GCC demand accelerates.

The rental pressure could persist as the next wave of GCC expansion takes shape, with Anarock estimating 50–70 additional GCCs across sectors over the next year and 8–12 million sq ft of incremental office demand over the next three to five years.

The influx of companies and employees is also increasingly putting pressure on the city’s infrastructure. The prime office market is already grappling with increasing traffic congestion, putting greater pressure on the city’s transport infrastructure. "If infrastructure doesn't keep pace with Hyderabad's rapid economic and office-market growth, that could become a challenge,” Gipson said

The city’s transport authorities too have acknowledged growing congestion and the need to expand roads, junctions and public transport capacity as the metropolitan region expands.