Delhi to see around 9.5m sq ft of new office supply this year | Real Estate Asia
, India

Delhi to see around 9.5m sq ft of new office supply this year

Tech firms, flex operators, and healthcare firms are expected to drive demand.

According to a JLL report, Delhi’s office market made a strong recovery in 2022 as net absorption for the full year recorded at 6.16 million sq ft, increasing 31% y-o-y. 

It has almost reached the five-year pre-pandemic average (2015-2019) of 6.37 million sq ft. Gross leasing for 2022 was 12 million sq ft, driven by pre-commitments and churn deals, and driven primarily by flex operators, followed by tech and manufacturing.

Here’s more from JLL:

On a q-o-q basis, net absorption increased by 17% to 1.88 million sq ft. The majority of net absorption in the quarter was attributable to Gurgaon (58%), followed by Noida with a share of 41%.

Supply of 8.30 million sq ft in 2022

New quarterly supply of 1.84 million sq ft was recorded in Delhi NCR, taking the yearly supply to 8.30 million sq ft for 2022. A majority of the yearly supply was contributed by Gurgaon (62%), followed by Noida with a share of 37%. Just around 13% of the quarterly supply was pre-committed, highlighting the cautious approach adopted by the occupiers in 4Q22.

Vacancy declined by 40 bps q-o-q to settle at 28.1 % in 4Q22. The future supply pipeline is strong, with 9.5 million sq ft of space expected to complete in 2023. A majority of projects in the supply pipeline are in the advanced stages of construction.

Rents remain stable in 4Q22

Rents remained stable in the quarter. However in 2023, rents are expected to increase in key corridors and quality completions, backed by demand from occupiers.

There is a trend of flight-to-quality by occupiers looking at healthy, well-managed buildings. Therefore, rents of such office assets are expected to increase in the coming quarters.

Outlook: Office demand to be robustly driven by quality supply

Due to global headwinds, some delayed decision-making is expected by corporates as they look at macroeconomic signals before committing capital for new offices. However, in the near to medium term, both demand and supply are expected to remain robust.

In 2023, supply of around 9.5 million sq ft and net absorption of more than 5 million sq ft is expected. The demand is expected to be driven by tech firms, flex operators, healthcare, GCCs and manufacturing firms. Strong market fundamentals and a quality supply pipeline will act as catalysts to draw investor attention to office space in Delhi NCR, especially for well-leased assets.

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

 

Follow the link for more news on

Join Real Estate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

How Metland Indonesia deals with weaker residential purchasing power
The real estate firm continues to expand with residences that are attractive to consumers because of pricing, the ‘growing house’ concept, and sustainable features.

Event News

Event News

Real Estate Asia Awards 2023 Winner: Henderson Land Development Company Limited
Henderson Land Development Company Limited wins big at the Real Estate Asia Awards 2023 taking home 3 notable accolades, the Developer of the Year, Mixed-Use Development of the Year, and Residential Development of the Year awards for Hong Kong.
Real Estate Asia Awards 2023 Winner: Henderson Land Development Company Limited
Henderson Land Development Company Limited wins big at the Real Estate Asia Awards 2023 taking home 3 notable accolades, the Developer of the Year, Mixed-Use Development of the Year, and Residential Development of the Year awards for Hong Kong.