NCR Office Market Sees 60% Decline in Net Leasing: JLL India

NEW DELHI: The office market in Delhi-NCR faced a significant slowdown during the first quarter of the year, with net leasing of workspaces plummeting by 60% to 1.5 million square feet. This decline is attributed to lower new supply, as reported by JLL India, a leading real estate consultant.

Real estate consultant JLL India's data revealed that the gross leasing of office spaces in Delhi-NCR decreased by 28% in January-March to 3 million square feet, down from 4.2 million square feet in the same period last year. Net leasing, which measures the new floor space occupied minus the floor space vacated, fell from 3.7 million square feet to 1.5 million square feet, a 60% drop.

Gross leasing refers to all lease transactions recorded during the period, including confirmed pre-commitments. It does not account for term renewals. Net absorption, on the other hand, is calculated by subtracting the floor space vacated from the new floor space occupied. Pre-committed spaces are not considered absorbed until they are physically occupied.

JLL India noted that the fresh supply of office spaces in the region fell by 1.39 million square feet during January-March, compared to 2.9 million square feet in the corresponding period of the previous year. Despite the current downturn, JLL India remains optimistic about the long-term fundamentals of the Delhi-NCR office market, predicting that leasing activities will pick up in the coming quarters.

Realty major DLF has a substantial office portfolio in Delhi-NCR, while Bharti Realty and Max Estates are also significant players in the NCR office market. Recently, Signature Global entered into a joint venture with RMZ Group to develop a commercial project in Gurugram, with a total investment of around Rs 7,500 crore. The project will feature 55 lakh square feet of leasable area, including 35 million square feet of prime office space, retail spaces, and two hotels with a combined 500 rooms.

Gaurs Group also has plans to develop office space in Noida, further contributing to the region's commercial real estate landscape.

Across the seven major cities—Mumbai, Bengaluru, Delhi-NCR, Pune, Hyderabad, Chennai, and Kolkata—the gross leasing of office space grew by 10% to 21.5 million square feet in January-March, up from 19.5 million square feet in the year-ago period. Net absorption or leasing of office space rose by 7% to 13.7 million square feet from 12.8 million square feet. The increase in gross leasing across these cities was driven by foreign firms establishing Global Capability Centres (GCCs).

Rahul Arora, Head of Office Leasing & Retail Services and Senior Managing Director (Karnataka, Kerala), India, at JLL, stated, 'Market fundamentals continue to strengthen, with pan-India vacancy dropping to a five-year low of 14.7%.' He added that India is evolving from a cost center to an innovation epicenter, with Bengaluru leading this transformation.

Vibhor Jain, Founder & CEO of Carbon Guardians, commented, 'We believe India's office market is undergoing a genuine structural shift, not just another cycle. Demand remains strong, but prolonged geopolitical tensions can push up energy, logistics, and fit-out costs. AI is also reshaping the traditional IT services model, impacting headcount-led office demand in India.'

Jain emphasized the need to build high-quality workplaces that cater to a more selective and evolving occupier base. The office market in Delhi-NCR, while currently facing challenges, is expected to recover and continue its growth trajectory in the coming quarters.