Delhi's Office Market Poised for Revival: A Decade of Limited Supply Ends

After almost a decade of muted supply, Delhi’s office real estate market is preparing for a revival. A new report by CBRE South Asia Pvt. Ltd., in collaboration with the Confederation of Indian Industry (CII), projects that the national capital will see nearly 5 million sq. ft. of fresh office space by 2027. The pipeline, unveiled in the report Delhi 2041: Shaping the Future of Real Estate at the 2nd CII Delhi Real Estate Summit 2025, is expected to restore balance to a market constrained by land shortages since 2016.

The report also shed light on Delhi-NCR’s housing dynamics, which reflect a shift towards the higher end of the market. For context, homes in the region are grouped by price: affordable (up to ₹45 lakh), budget (₹45–75 lakh), mid-end (₹1–1.5 crore), high-end (₹1.5–3 crore), premium (₹3–6 crore), luxury (₹6–50 crore), and ultra-luxury (₹50 crore and above). Put simply, while budget and affordable homes cater to first-time buyers, Delhi’s growth is now powered by families and professionals seeking premium lifestyles, with most sales in 2025 coming from the high-end, premium, and luxury categories.

Delhi’s resurgence is particularly significant when seen against the backdrop of India’s overall office market. In H1 2025, India witnessed nearly 31 million sq. ft. of gross office leasing, led by Bengaluru (12 mn sq. ft.), Hyderabad (6.5 mn sq. ft.), and Pune (4.2 mn sq. ft.). In comparison, Delhi’s absorption of 400,000 sq. ft. may seem modest, but experts note that its core business district (CBD) demand is far more niche, driven by consulting firms, global think tanks, BFSI players, and embassies—sectors that rely on the capital’s unique ecosystem rather than scale.

“Delhi’s strong economic potential has helped its property market not just to bounce back, but also start on a path of steady, high-quality growth,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE. “New homebuyers and business owners are looking beyond just location and are now focused on amenities, sustainability and design. This change shows that the city is becoming more affluent and that people want a better quality of life. The market is also becoming more mature, thanks to strong and clear regulations. This has given people a lot of confidence and attracted significant investment. With the Delhi Master Plan 2041 guiding future growth, the city is ready to play a pivotal role in India’s real estate story.”

Delhi’s leasing momentum in H1 2025 was led by research, consulting, and analytics firms (39%), followed by flexible workspace operators (23%) and BFSI (18%). Analysts believe that while Delhi cannot compete with Bengaluru or Hyderabad on raw numbers, its appeal lies in being the seat of government, diplomacy, and policy, attracting occupiers that require a Delhi presence regardless of cost.

Policy clarity has also been a key factor. Regulatory oversight from Delhi RERA (DLRERA) has injected transparency into the market, while the Delhi Master Plan 2041—which integrates rural zones and prioritises affordable housing—provides a roadmap for orderly growth. Upcoming infrastructure projects, such as metro network expansions and new expressways, are expected to open new corridors for both commercial and residential development.

Beyond offices, retail demand in the capital has remained healthy. In H1 2025, 230,000 sq. ft. of retail space was absorbed, with high streets contributing nearly three-fourths of this activity. Fashion and apparel led the way with 35% share, followed by homeware (20%) and food & beverage operators (17%). Analysts say the entry of global luxury brands has sharpened the appetite for high-street retail, reinforcing Delhi’s image as a lifestyle and shopping hub.

On the housing front, 21,000 units were launched and sold in H1 2025, up 35% year-on-year. Three-fourths of the demand came from high-end to luxury categories, a clear signal that Delhi-NCR’s buyers are willing to pay more for quality and location. This demand-supply mismatch has already driven capital values higher in South-East and South-West Delhi, areas considered among the most desirable.

While Delhi may not match Bengaluru or Hyderabad in sheer leasing volumes, its evolving office market is carving out a distinct identity, fuelled by premium occupier demand, regulatory clarity, and urban planning vision. With 5 million sq. ft. of office space in the pipeline by 2027, alongside strong residential and retail momentum, the capital is poised to reaffirm itself as a strategic node in India’s real estate growth story.