Delhi NCR’s Grade-A office market continues to gain strength, with occupancy levels projected to cross 80% by FY2027. Gurugram is leading regional demand, driven by strong leasing momentum, limited new supply in key micro-markets, and consistent absorption from IT-BPM and consulting occupiers, according to ICRA’s latest market analysis.
The Grade-A office market in Delhi NCR continues to show strong fundamentals, backed by sustained leasing demand that is outpacing new supply. According to a recent ICRA market analysis, occupancy levels are steadily improving and are expected to reach 80.5–81.0% by March 2027. This marks a sharp recovery from earlier lows, reinforcing the region’s importance within India’s commercial office landscape.
Occupancy Rises on Healthy Absorption
Since March 2023, Delhi NCR has recorded a notable turnaround, with occupancy climbing by nearly 600 basis points to 78.6% as of September 2025. The improvement has been driven by consistent net absorption exceeding fresh supply. In FY2025 alone, the market added 7.4 million square feet (msf) of new supply, while net absorption reached a stronger 11.4 msf. The trend continued into the first half of FY2026, with absorption of 8.0 msf against new supply of 7.3 msf, highlighting a tightening market.
Leasing Momentum to Absorb Future Supply
Looking ahead, Delhi NCR is expected to see around 14 msf of new supply in FY2026 and nearly 11 msf in FY2027. Despite this pipeline, leasing momentum is projected to remain robust. Occupancy is expected to improve further to 78.5–79.0% by March 2026 and cross 80% by March 2027. A key stabilising factor is pre-commitment: about 31% of the 17.5 msf supply expected between H2 FY2026 and FY2027 is already pre-leased, reducing near-term vacancy risk.
Gurugram Anchors Regional Demand
Delhi NCR accounts for roughly 20% of the total Grade-A office stock across India’s top six cities, with about 204 msf of space. Gurugram dominates the regional market, holding a 60% share, followed by Noida and Delhi. Key micro-markets such as Sector 24 (Cyber City), Sector 62 (Noida), and Sector 48 (Gurugram) together contribute 17% of NCR’s office supply. Vacancy levels are expected to remain low in Sector 24 due to the absence of new supply, while Sectors 62 and 48 are likely to see further vacancy reduction driven by steady absorption and limited additions.
Vacancies Persist in Peripheral Zones
Despite its strengths, Delhi NCR continues to report the highest vacancies among India’s top six office markets. This is largely due to lower occupancy levels of 50–55% in Gurugram’s peripheral business districts, where older office assets experience only moderate demand. The market also remains fragmented, with the top 10 developers accounting for about 40% of Grade-A office stock, suggesting the presence of multiple regional players.
Rentals and National Outlook Remain Positive
Between FY2018 and FY2025, Delhi NCR’s office stock grew at a compound annual rate of nearly 6%, slightly below the national average of 7% across top cities. ICRA expects average rentals in the NCR Grade-A office market to grow by 3–4% in FY2026, supported by favourable demand-supply dynamics. At a national level, office leasing has remained resilient despite global headwinds, positioning Delhi NCR as a preferred destination for occupiers seeking scale, connectivity, and long-term value.
