Delhi net office absorption hits a record 4.68m sq ft in H1 2024

Net absorption in Q2 alone was at 2.41m sq ft.

In a report, JLL said gross leasing in Delhi’s office market grew strongly by 10% y-o-y, recording 7.84 million sq ft in H1 2024. The first half of the year witnessed the highest net absorption ever recorded in a first half at 4.68 million sq ft.

The report added that net absorption for Q2 2024 recorded 2.41 million sq ft, marking a 7% rise compared to the previous quarter and a substantial 78% surge compared to the same period last year. Gurgaon led with 69% of the net absorption, followed by Noida with 28%.

Here’s more from JLL:

During the quarter, Noida and Gurgaon submarkets combined added 0.99 million sq ft of new supply. This included two projects in Gurgaon: The Masterpiece on Golf Course Road and Capital 402 on NH8. Also, the Wave One project was completed in Noida.

By end-2024, approximately 6.9 million sq ft of new supply is projected to be completed, of which 69% of the total is projected to be completed in Gurgaon, while the remaining 30% is expected to be in Noida.

With strong demand, rents rise in prime buildings

Demand is strengthening for office space, driven by a wide array of occupiers, including flex space operators. As a result, rents in quality office buildings in Gurgaon, Noida and Delhi have seen an uptick in Q2 2024.

The flight-to-quality trend is expected to drive rents up further. Therefore, it is expected that rents will increase in prime office corridors and quality office buildings backed by established developers and institutional investors.

Outlook: A new benchmark in leasing activity is forecast for 2024

The upcoming surge of top-notch Grade A office projects is expected to drive significant leasing activity in the near and medium term. The leasing activity is expected to be driven by flex operators, IT/ITeS, Manufacturing and BFSI.

The period from 2024 to 2028 will witness the addition of approximately 38–39 million sq ft of new supply to the market, with an estimated net absorption of around 33–34 million sq ft during that time.

Note: Financial indicators are for the SBD, while physical indicators are for the Grade A office market. Data is on a GFA basis.