The office market in Delhi is experiencing a significant boost, with net absorption projected to hit 8.3-8.4 million square feet by the end of 2025, according to a new report by JLL. The growth is primarily attributed to the influx of high-quality office spaces developed by leading developers and institutional owners in key locations across the city. Along with improving connectivity and a steady rise in tenant demand, these spaces are expected to continue driving both leasing momentum and rent increases in the region.

“Positive market trends, high-quality upcoming inventory, solid tenant uptake, and improving connectivity are enhancing the attractiveness of various submarkets,” the report notes, adding that these factors will likely attract more investors to the Delhi NCR office sector. As the market becomes increasingly favourable, tenants are taking advantage of the growing number of flexible workspaces and modern office buildings in prime locations.

In 2024, office leasing activity surged to 17.7 million square feet, with flexible workspace operators accounting for 35.9% of the total leased area. IT/ITeS sectors followed closely at 19.6%, while manufacturing and BFSI (banking, financial services, and insurance) sectors made up 12.7% and 11.5%, respectively, marking a 27.2% increase compared to 2023, reflecting the growing demand for flexible and hybrid workspaces.

Net absorption in 2024 reached 9.4 million square feet, a 30% increase year-over-year. Gurgaon and Noida dominated the leasing activity, with these submarkets collectively capturing 96% of the total absorption. Key areas such as the GCR Extension and the Noida-Greater Expressway saw heightened occupier interest during the year. The fourth quarter alone accounted for 2.84 million square feet of net absorption, underscoring the continued momentum in the market.

The supply of office space in Delhi NCR stands at 5.6 million square feet, with 1.9 million square feet added in Q4 2024. This new supply has boosted the total Grade A office stock to nearly 155 million square feet. Gurgaon remains the dominant submarket, accounting for 74% of new completions, followed by Noida at 21% and SBD Delhi at 5%. Quality office spaces from major developers are expected to further fuel growth in the coming years, with developers focusing on delivering modern, high-demand properties.

In addition to increased leasing activity, the Delhi NCR office market has seen an annual rental increase of 5%. The rent rise is primarily driven by strong pre-commitments from tenants throughout the year, encouraging developers to raise prices for upcoming office phases. As the demand for office space grows, the region is poised for further rent hikes soon.

Delhi’s thriving office leasing landscape is supported by a diverse mix of tenants, including flexible workspace providers, technology companies, and financial institutions. This dynamic demand, along with the steady increase in supply, is set to position Delhi as a key player in the flexible office space market, ensuring its continued growth in the years ahead.