Delhi-NCR’s office market had a weak start to the year as lower new supply pulled down leasing activity sharply in the January-March quarter, according to JLL India. The real estate consultant said that gross leasing, which includes all office lease deals during the quarter except renewals, fell 28% to 3 million square feet from 4.2 million square feet a year ago.
Net leasing, which measures occupied office space after subtracting vacated areas, dropped even more sharply by 60 per cent to 1.5 million square feet from 3.7 million square feet last year. One of the main reasons for the decline was lower fresh supply. New office space supply in Delhi-NCR fell to 1.39 million square feet during the quarter, compared to 2.9 million square feet in the same period last year.

Even with the slowdown, JLL said Delhi-NCR’s office market remains strong in the long run and leasing activity is likely to improve in the coming quarters.
Big developers continue to stay active in the region. DLF has a major office portfolio in Delhi-NCR, while Bharti Realty and Max Estates are also important players in the market.

Signature Global has also recently partnered with RMZ Group to develop a large commercial project in Gurugram with an investment of around Rs 7,500 crore. The project will have 55 lakh square feet of leasable space, including around 35 million square feet of prime office space, along with retail areas and two hotels with about 500 rooms each. Gaurs Group is also planning office projects in Noida.

While Delhi-NCR saw weaker numbers, office leasing across India’s seven biggest cities performed better. These cities: Mumbai, Bengaluru, Delhi-NCR, Pune, Hyderabad, Chennai and Kolkata, recorded a 10 per cent rise in gross leasing to 21.5 million square feet during January-March.

Net absorption across these cities also increased 7 per cent to 13.7 million square feet.

JLL said much of this growth came from foreign companies taking office space to set up Global Capability Centres (GCCs).

"Market fundamentals continue to strengthen, with pan-India vacancy dropping to a five-year low of 14.7 per cent," said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

He said India is moving from being mainly a cost centre to becoming a bigger innovation hub, with Bengaluru leading this growth.

Vibhor Jain, Founder & CEO of Carbon Guardians, said, "we believe India's office market is in the middle of a genuine structural shift, not just another cycle. Demand remains strong, but we also have to be realistic, prolonged geopolitical tensions can push up energy, logistics and fit-out costs, even if the world eventually learns to adapt."

He also said AI is changing the traditional IT services model, which is affecting office demand based on employee numbers.

"The opportunity now is to build the right quality of workplace for a more selective and evolving occupier base," Jain said.