NEW DELHI: The office market in Delhi-NCR experienced a downturn in the first quarter of the year, with net workspace leasing plummeting by 60%, reaching 1.5 million square feet, primarily due to a decline in new supply, according to JLL India.
Data from real estate consultant JLL India indicates that gross leasing of office spaces in Delhi-NCR fell 28% from 4.2 million sq ft in the same period last year to 3 million sq ft this year.
Net leasing dropped 60% from 3.7 million sq ft to 1.5 million sq ft.
Gross leasing includes all lease transactions during the period, such as confirmed pre-commitments, but does not account for term renewals. Meanwhile, net absorption is determined by the difference between new floor space occupied and space vacated. Pre-committed space is not counted as absorbed until it is physically occupied.
JLL India reported a decrease in new office space supply, which fell to 1.39 million sq ft in January-March compared to 2.9 million sq ft during the same period last year.
Despite the current dip, JLL asserts that the long-term fundamentals of Delhi-NCR’s office market remain robust, with expectations for increased leasing activity in the upcoming quarters.
DLF, a prominent player in the market, continues to hold a significant office portfolio in Delhi-NCR. Other major participants include Bharti Realty and Max Estates. Recently, Signature Global announced a joint venture with RMZ Group to develop a commercial project in Gurugram, with an investment of approximately ₹7,500 crore. This project aims to provide a leasable area of 5.5 million sq ft, designated for prime office space, retail areas, and two hotels with around 500 rooms each.
Additionally, Gaurs Group has plans to develop office space in Noida.
Across seven major cities, gross leasing of office space grew by 10%, reaching 21.5 million sq ft in January-March, up from 19.5 million sq ft in the previous year. This growth was driven by foreign firms securing spaces for the establishment of Global Capability Centres (GCCs).
Rahul Arora, Head of Office Leasing & Retail Services at JLL, stated, “Market fundamentals continue to strengthen, with national vacancy rates dropping to a five-year low of 14.7%.”
JLL also highlighted India’s transition from a cost center to an innovation hub, with Bengaluru taking the lead in this growth trajectory.
Vibhor Jain, Founder & CEO of Carbon Guardians, commented, “We believe India’s office market is undergoing a genuine structural shift rather than merely cycle changes. While demand remains strong, we must acknowledge that prolonged geopolitical tensions could elevate energy, logistics, and fit-out costs, even if global adaptations occur.” He emphasized that AI is transforming the traditional IT services model, directly affecting headcount-driven office demand in India.
“Now is the time to invest in creating the right quality of workplace for a more discerning and evolving occupant base,” Jain added.
