Delhi to see almost 7m sq ft of office supply by year-end

Most of the new stock will be in Noida and Gurgaon.

JLL analysts have a bright long-term outlook for Delhi NCR's overall Grade A office market given the stable macroeconomic conditions and the quality supply pipeline.

By end-2023, around 6.5-7.0 million sq ft of supply will come online, mostly in the suburban markets of Noida and Gurgaon. In a report, JLL said the flight-to-quality trend is expected to continue generating healthy demand in upcoming supply by established developers who have focused on developing green and sustainable workspaces.

Here’s more from JLL:

There was a substantial uplift in quarterly gross leasing volumes, led by a diverse range of occupiers such as BFSI, IT/ITeS, Flex, Telecom and Healthcare, among others. Delhi NCR recorded the highest gross leasing volume amongst all major cities in 1Q23.

Buoyant leasing demand was witnessed in 1Q23, with net absorption of 1.96 million sq ft, which increased by 3.8% q-o-q and 47% y-o-y. Gurgaon led with a 54% share of net absorption as it recorded some large-size transactions. Noida accounted for a 37% share with healthy traction from IT/ITeS and flex space operators.

Supply additions of 1.80 million sq ft in 1Q23

Six projects were completed in 1Q23 across Delhi NCR. Two projects were completed in Gurgaon, including Magnum City Centre and a refurbished project at Udyog Vihar. The completed buildings in Noida included NSL Techzone Tower 2 and Max Square.

One project was completed in Delhi CBD, Commercial Tower – Plot No. 2 & 3. Delhi SBD also witnessed one supply addition, Eldeco Centre at Malviya Nagar. By end-2023, 6.92 million sq ft is expected to become operational across Delhi NCR. Noida is expected to lead with 61% of this supply, with Gurgaon accounting for 32%.

Rents increase in quality office projects

Overall rents in Delhi NCR increased marginally in 1Q23. Rents rose in CBD and SBD as there were new completions with higher rents as compared to the market average. In Noida, a rent increase was seen in quality office projects and institutionally-owned buildings.

Superior quality assets and institutional landlords are expected to drive rent growth across key submarkets. Submarkets with a significant supply pipeline may see a stable rent trend.

Note: Delhi Office refers to Delhi NCR's overall Grade A office market.