Delhi NCR saw 2.8 million sq ft of leasing and strong net absorption of 3.1 million sq ft. Noida Expressway led demand. Vacancy declined to 21.06%, while rents rose 3–5% QoQ, particularly in Gurgaon CBD. With 13.9 million sq ft under construction, supply will shape the coming quarters.
Delhi NCR’s office market saw 2.8 million sq ft of gross leasing in Q1 2025—a 7% quarter-on-quarter dip—marking a relatively modest start to the year. However, net absorption was robust at 3.1 million sq ft, thanks to strong tenant movement into pre-committed spaces. While vacancy continues to trend downward, rental rates saw a notable increase, especially in prime Gurgaon CBD locations.
Leasing Activity Softens but Remains Diverse
Gross leasing volume (GLV) was driven by a mix of sectors, led by IT-BPM, professional services, and manufacturing.
- Sector contributions:
- IT-BPM: 21%
- Professional services: 15%
- Engineering & manufacturing: 13%
- Submarket distribution:
- Noida Expressway: 27% of GLV (highest)
- Gurgaon: 26%
- Noida City and Delhi CBD also contributed
Noida Expressway continues to perform well, benefiting from improved infrastructure, relative affordability, and tenant-friendly supply. Leasing here grew 17% QoQ.
Strong Net Absorption Brings Vacancy Down
Net absorption of 3.1 million sq ft nearly doubled on a YoY basis. This was primarily driven by the handover of pre-leased spaces and fewer completions during the quarter.
- City-wide vacancy: Dropped 48 bps QoQ to 21.06%
- Submarket vacancies:
- Gurgaon CBD: 8.3% (tightest)
- Noida Expressway: 25.6% (highest)
The vacancy compression trend is expected to continue, especially in CBD and established suburban markets where demand remains stable and new supply is limited.
Rents See Quarterly Uplift in Prime Markets
Delhi NCR saw rents rise by 3–5% quarter-on-quarter on average in Q1 2025. The Gurgaon CBD submarket led the increase, with some buildings seeing rental jumps of 10–12% year-on-year.
- Highest rents:
- Gurgaon CBD: ₹132.4/sq ft/month
- Delhi CBD: ₹123.4/sq ft/month
Rents remained stable in peripheral submarkets, while Grade A properties in high-demand areas continued to command premiums.
Key Transactions Reflect Strong Demand for Quality Space
Significant transactions this quarter included:
- Tata Consultancy Services – 550,000 sq ft at DLF Downtown, Gurgaon
- NatWest Group – 100,000 sq ft in Noida Expressway
- Publicis Sapient – 70,000 sq ft in One Horizon Centre, Gurgaon
All leases were for premium properties, reflecting occupiers’ focus on employee-centric, scalable, and well-connected spaces.
Outlook
Delhi NCR has 13.9 million square feet under construction, with a notable portion set to complete within the next 12–24 months. While this will gradually balance the vacancy situation, demand is expected to remain strong in the Gurgaon and Noida corridors, thanks to superior infrastructure and tenant flexibility. With over 13 million sq ft in the pipeline, supply is expected to increase through 2025–26, particularly in Noida and Gurgaon. However, demand for core assets will continue to put pressure on rents and occupancy in key hubs, such as Gurgaon CBD, where vacancies remain extremely tight.
