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Office leasing activity in Delhi-NCR declined significantly during the January–March quarter, with net absorption falling 60% year-on-year to 1.5 million sq ft, according to JLL India. Gross leasing also dropped 28% to 3 million sq ft, primarily due to reduced new supply, which declined to 1.39 million sq ft from 2.9 million sq ft a year earlier. Despite the subdued performance in the region, overall office leasing across seven major Indian cities rose, driven by demand from global capability centres. Delhi-NCR continues to attract major commercial developments, including a planned INR 7,500 crore project in Gurugram. While near-term activity remains constrained, long-term fundamentals of the NCR office market are expected to support recovery in leasing volumes over the coming quarters.
Office leasing activity in Delhi-NCR remained subdued during the January–March quarter, with net absorption of workspaces declining 60% year-on-year to 1.5 million sq ft, primarily due to a reduction in fresh supply, according to data released earlier in the past week by JLL India. Advertisement
Gross leasing of office spaces in the region fell 28% to 3 million sq ft during the quarter, compared with 4.2 million sq ft in the corresponding period of the previous year. Net absorption, which measures actual occupied space after accounting for vacated areas, dropped from 3.7 million sq ft to 1.5 million sq ft.
The decline in leasing activity was largely attributed to lower new supply entering the market. Fresh supply during the quarter stood at 1.39 million sq ft, significantly lower than the 2.9 million sq ft recorded a year earlier. Limited availability of new Grade A office stock constrained transaction volumes, despite underlying demand.
Gross leasing figures include all lease transactions during the period, including pre-commitments, while net absorption reflects space that has been physically occupied. The divergence between the two metrics indicates that a portion of leased space has yet to translate into actual occupancy.
Despite the near-term slowdown, JLL India indicated that the long-term fundamentals of the Delhi-NCR office market remain stable, with leasing activity expected to improve in subsequent quarters as supply conditions normalise.
The region continues to witness development activity from major real estate players. DLF Limited maintains a significant office portfolio in the NCR market, while developers such as Bharti Realty and Max Estates Limited are also active in commercial development. Additionally, Signature Global has recently entered into a joint venture with RMZ Group to develop a commercial project in Gurugram with an estimated investment of around INR 7,500 crore. The project is planned to include a leasable area of approximately 55 lakh sq ft, comprising office, retail and hospitality components.
Across India’s seven major office markets—Mumbai, Bengaluru, Delhi-NCR, Pune, Hyderabad, Chennai and Kolkata—gross leasing rose 10% to 21.5 million sq ft during the quarter, while net absorption increased 7% to 13.7 million sq ft. The growth was driven largely by demand from foreign companies establishing Global Capability Centres (GCCs).
Market participants indicated that vacancy levels across major cities have declined, reflecting tightening supply conditions in key micro-markets. At the same time, evolving workplace requirements and global economic conditions are influencing leasing decisions.
Industry stakeholders noted that while demand for office space remains supported, factors such as geopolitical tensions and rising input costs could impact occupier strategies. Additionally, technological shifts, including the adoption of artificial intelligence, are influencing traditional office demand patterns, particularly in sectors reliant on large workforce deployments.
The data reflects a mixed outlook for the office sector, with regional variations in performance even as overall demand across major cities remains stable.
Source - PTI
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