Microsoft India (R&D) Pvt Ltd has inked one of Hyderabad’s largest office lease deals in 2025, acquiring 264,000 sq ft of prime commercial space in the city’s acclaimed Phoenix Centaurus complex located in Gachibowli. The fresh five-year lease signals a significant expansion for Microsoft’s Hyderabad footprint, reinforcing the city’s status as a key technology and innovation hub. The monthly rent commitment stands at Rs 5.4 crore, encompassing base rent and additional operating expenses.
Key Aspects of the Lease Deal
The lease covers approximately 2.64 lakh sq ft across the 3rd and 4th floors of Phoenix Centaurus, Hyderabad’s prominent commercial building in the IT corridor.
Monthly base rent is fixed at Rs 1.77 crore, which amounts to Rs 67 per sq ft, while total monthly outgoing costs, including maintenance, operating expenses, capital expenditure, and management fees, sum up to Rs 5.4 crore.
The lease began in July 2025 and is set for five years with an annual rent escalation of 4.8%.
Microsoft provided a security deposit of Rs 42.15 crore as part of the lease agreement’s terms.
Tablespace Technologies Limited is the sub-lessor who has taken on the primary lease from Phoenix Tech Zone and in turn sub-leases the space to Microsoft.
Strategic Importance Of The Hyderabad Expansion
This lease deal highlights Microsoft’s strategic pivot to deepen its research and development capabilities in Hyderabad. Established in the city since 1998, Microsoft already operates one of its largest R&D centers here, known for its focus on engineering, cloud computing, artificial intelligence, and innovation. The additional office space in Phoenix Centaurus is expected to accommodate new and expanding technology teams, fueling product development and innovation efforts.
Hyderabad’s appeal to global tech giants remains strong, driven by its rich talent pool, state-of-the-art infrastructure, cost advantages, and quality of life. Microsoft’s move also confirms Hyderabad’s growing reputation as a preferred destination for large-scale office expansions alongside industry peers.
Financial Breakdown and Lease Details
In addition to the base rent of Rs 67 per sq ft, Microsoft pays an effective outgoing rate of Rs 204 per sq ft when factoring in:
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Common area maintenance (Rs 16.28 per sq ft)
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Operating expenses (Rs 39 per sq ft)
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Capital expenses (Rs 74.73 per sq ft)
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Management fees (Rs 7 per sq ft)
This comprehensive rental package ensures Microsoft’s occupancy of a fully maintained, premium Grade-A office environment suited for high-tech operations.
Context Within Hyderabad’s Commercial Real Estate Market
The deal is among the largest office leasing transactions recorded in Hyderabad this year. It closely follows other major leases such as:
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Tata Consultancy Services (TCS) leasing 10.18 lakh sq ft in Hyderabad’s financial district at Rs 4.3 crore monthly rent.
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Meta (Facebook) renewing its lease for 3.7 lakh sq ft in Hyderabad for Rs 2.8 crore monthly rent.
These moves collectively reinforce the strong demand for commercial office spaces in Hyderabad’s IT corridors like Gachibowli and Hitech City, underscoring the city’s robust position within India’s technology ecosystem.
Outlook for Hyderabad’s Real Estate and Tech Industry
The influx of major tech companies like Microsoft continues to elevate Hyderabad’s profile as a premier tech hub. With a steady rise in demand for premium office spaces, the city is witnessing infrastructural enhancements including metro connectivity, road expansions, and green office environments.
Experts suggest that Microsoft’s investment in expanding office space in Hyderabad will catalyze further growth in employment opportunities and technology innovation clusters, cementing the city’s position as a globally competitive tech destination.
Conclusion
Microsoft’s 2.64 lakh sq ft office lease at Phoenix Centaurus with a monthly commitment of Rs 5.4 crore is a landmark deal reflecting its strategic growth aspirations in India’s tech capital. The lease aligns with Hyderabad’s evolution as a preferred base for leading technology enterprises and signals confidence in the city’s business climate and talent landscape.
Source: Economic Times, Hindustan Times, Electronics For You, Propstack, Newsbytes
