Delhi-NCR's commercial real estate market is gearing up for a substantial supply boost, with projections indicating the addition of approximately 5 million square feet of new Grade-A office space. This surge in supply marks a significant shift after a decade of limited growth in the region.
Factors Driving the Supply Boost
Several factors are contributing to this anticipated increase in commercial real estate supply. Infrastructure development, including expanding expressways and the development of the Noida International Airport in Jewar, is unlocking new economic centers and attracting real estate investment. These developments are enhancing connectivity and creating premium commercial corridors, making the region more appealing to businesses.
Furthermore, government policies and urban planning initiatives, such as the Delhi Master Plan 2041, are fostering a more transparent and attractive investment environment. These initiatives are designed to guide future growth, with a focus on both urban and rural areas, and prioritize affordable housing, contributing to overall economic development.
Market Dynamics and Demand
The expected supply increase comes at a time when global companies are expanding their operations in India, ensuring Delhi-NCR remains a prime destination for corporate growth. Several sectors, including IT-BPM, BFSI, engineering and manufacturing, and research and consulting, are expected to drive demand for office spaces. The rise of Global Capability Centers (GCCs) and multinational firms establishing long-term presences in the region is also fueling the demand for premium, future-ready workspaces.
In the first half of 2025, Delhi recorded an office space absorption of approximately 400,000 sq. ft., reflecting strong business confidence in core business districts. The resilience of the Indian economy, supported by strong GDP growth, is expected to further bolster business confidence and expansion plans.
Micro-Market Analysis
Central Gurugram and Noida currently account for a significant portion (around 57%) of Delhi-NCR's Grade A office space. Sector 24 (Cyber City), Sector 62 (Noida), and Sector 48 (Gurugram) are the top three micro-markets in Delhi-NCR, representing approximately 18% of the city's total office supply. Vacancy levels are expected to remain low in Sector 24 (Cyber City) due to limited new supply and healthy absorption rates.
Rental Trends and Vacancy Rates
Rental rates in key micro-markets like Sector 62 (Noida) and Sector 48 (Gurugram) have been steadily increasing. ICRA expects the average rental rate for the Delhi-NCR market to increase by 3-4% in both FY25 and FY26. While Delhi-NCR has the highest vacancy rates among India's top six cities, largely due to low occupancy in Gurugram's peripheral business district, vacancy levels are expected to decline. Occupancy levels are projected to improve, potentially reaching 77.0-77.5% by March 2026.
Overall Market Outlook
The influx of new Grade-A office space is poised to revitalize Delhi-NCR's commercial real estate market. The region's robust infrastructure, skilled talent pool, and strategic location continue to attract investment and drive demand. This surge in supply reflects confidence in India's economic stability and its growing importance as a global business hub. With increasing demand for office spaces and the projected rise in occupancy levels, Delhi-NCR is expected to solidify its position as a key commercial real estate market in India.
