Delhi–NCR Office Market Report 2022

Annual review of leasing, supply, vacancy, rents, occupier sectors and major transactions

Reporting date: January 2023
Coverage: Delhi, Gurugram and Noida | Period-authentic year-end assessment

Executive summary

Delhi–NCR’s office market moved decisively beyond the pandemic interruption in 2022. Savills recorded 11.3 million sq ft of gross absorption, 46% above 2021 and marginally ahead of the 10.9 msf pre-pandemic benchmark. Leasing was unusually balanced: 5.6 msf in H1 and 5.7 msf in H2. Colliers’ narrower Grade-A series had already reached 8.8 msf by September, 160% above the comparable 2021 period. These figures use different definitions and should not be combined.

Demand outpaced 6.5 msf of new supply, allowing Savills’ market vacancy to decline from 23.0% to 21.9% even as total Grade-A stock increased from 131.2 to 137.7 msf. Average rents increased approximately 8%; MG Road and Noida Expressway recorded the strongest quoted-rent growth.

Gurugram generated 69% of absorption, Noida 29%, and Delhi approximately 2%. The geographic story was more specific than a simple Gurugram lead: 71% of Gurugram’s take-up occurred outside its traditional CBD, while 68% of Noida demand concentrated on the Expressway.

IT-BPM remained the largest sector at 24%, but its volume declined to about 2.7 msf from 3.3 msf in 2021. Flexible workspaces rose from 4% to 10% of leasing. BFSI and e-commerce each contributed 10%, engineering and manufacturing 9%, and research and consulting 8%.

Headline indicators

01 · Demand through the year

H1 absorbed 5.6 msf despite the Omicron interruption and delayed workplace re-entry. The second quarter accelerated sharply: Colliers measured 2.7 msf, more than double Q2 2021. H2 added 5.7 msf as occupiers executed deferred decisions, enterprise return-to-office programmes broadened and pre-leased buildings became operational.

The balance between halves matters. 2022 was not a single-quarter rebound driven by one exceptional transaction; it reflected sustained execution across large conventional leases, flex-operator commitments and relocations into newer Grade-A projects.

Deal-size distribution

Large transactions concentrated on Noida Expressway and in Gurugram’s secondary and peripheral business districts, where contiguous floor plates and newer projects were available.

02 · Supply, absorption and vacancy

New completions totalled approximately 6.5 msf, compared with 11.3 msf of gross absorption. Gross absorption is not the same as net absorption, but the demand-supply relationship was strong enough to reduce reported vacancy.

Approximately 75% of supply was delivered in Gurugram’s wider peripheral market. By project type, commercial buildings represented 65% of completions, IT non-SEZ projects 21%, and IT-SEZ projects 14%. The year showed increasing preference for non-SEZ formats as occupiers sought operational flexibility and the policy advantages of older SEZ structures became less decisive.

Vacancy remained a two-speed statistic. Prime institutional campuses and well-connected projects tightened, while fragmented or peripheral stock continued to carry much larger availability. Market-wide vacancy therefore overstated the practical choice available to occupiers seeking large, compliant, single-owner Grade-A buildings.

03 · Geographic performance

Gurugram

Gurugram absorbed approximately 7.8 msf, or 69% of NCR demand. Only about one-fifth of Gurugram activity occurred in the traditional CBD; 71% was recorded in the broader “Gurugram Others” basket. Golf Course Extension Road, Sohna Road, Udyog Vihar, NH-8 and emerging southern corridors offered larger blocks and more competitive occupancy costs than Cyber City or Golf Course Road.

Major commitments by Air India, Zomato/Blinkit, Reliance and IndiGo demonstrated that domestic corporates and aviation-linked businesses were meaningful demand drivers alongside technology and outsourced services.

Noida

Noida contributed approximately 3.3 msf, or 29% of absorption. Noida Expressway captured 68% of the city’s demand, supported by modern campuses, lower rents and access to a large technical workforce. Sector 62 ranked second with 17%.

HDFC’s 400,000 sq ft Ace Capital commitment and sizeable education, technology and flex requirements strengthened the Expressway’s position as the principal alternative to Gurugram for large occupiers.

Delhi

Delhi proper contributed only around 2%. Limited new stock and high rents constrained volume. Connaught Place, Aerocity, Jasola, Saket and Nehru Place continued to serve occupiers that valued address, airport access or proximity to government and professional-services clients over large-scale campus economics.

04 · Rental map

Regional average rents increased around 8%. MG Road rose approximately 23% and Noida Expressway 14%, reflecting tightening availability in selected quality buildings and comparison with pandemic-discounted 2021 levels.

These are representative quoted ranges, not achieved effective rents. Fit-out contributions, rent-free periods, escalation structures and lock-ins could materially change effective occupancy cost.

05 · Sectors in motion

The flex expansion was structural. Enterprises increasingly used managed offices for project teams, distributed workforces and faster occupation without large fit-out expenditure. Conventional demand nevertheless remained dominant, particularly among occupiers securing headquarters or large operating centres.

06 · Largest identifiable office transactions

The public record supports fewer named deals than the annual transaction universe. This appendix deliberately excludes unidentified transactions, warehouse leases, expressions of interest and deals whose signing year could not be confirmed. Webhelp India’s One Qube transaction is excluded because the underlying lease-document report dates it to January 2023.

Complete sourced transaction register

This expanded register contains 28 separately identified occupier commitments. Areas marked undisclosed form part of a sourced multi-tenant announcement and are not estimated.

The downloadable CSV additionally contains the source URL and transaction notes for every row.

07 · Workplace and portfolio strategy

Hybrid work altered space design more than it eliminated demand. Occupiers reduced fixed workstation density, increased collaboration areas, improved air quality and access systems, and favoured buildings capable of supporting employee experience. Portfolio reviews produced both consolidations and expansions: some companies surrendered secondary space while committing to larger, higher-quality hubs.

Flight to quality became measurable through leasing velocity. Single-owner projects with institutional maintenance, sustainability credentials and transit access captured disproportionate demand. Older strata buildings competed through rent, fitted space and shorter commitments.

08 · Outlook as of January 2023

The market entered 2023 with substantial momentum but new risks. Global technology hiring slowed, recession concerns affected outsourcing decisions and large occupiers were scrutinising portfolios. Against this, return-to-office mandates, domestic corporate growth, GCC expansion and managed-space adoption supported demand.

Savills projected approximately 11.0 msf of 2023 absorption against a 9.4 msf supply pipeline. Around 70% of prospective completions were expected in Gurugram Others and Noida Expressway. Vacancy was therefore expected to remain broadly range-bound, with rental growth concentrated in tight prime buildings rather than spread evenly across NCR.

09 · The flexible-workspace expansion

Flexible offices became a distinct demand engine rather than a minor alternative format. WeWork’s 660,000 sq ft Alphathum transaction was exceptional in scale, while Awfis, Venture X, Springhouse, The Office Pass and Space Creattors widened the operator base. The spectrum ranged from neighbourhood centres of 20,000–30,000 sq ft to complete towers.

Enterprise customers were central to this growth. National Australia Bank’s managed-office requirement illustrates how an end user could occupy space through an operator rather than execute a conventional landlord lease. This complicates market measurement: the operator’s head lease and the enterprise’s managed-space agreement must not both be added to conventional absorption without identifying the overlap.

10 · Grade-A buildings versus the headline vacancy rate

The 21.9% vacancy figure did not mean that one-fifth of every office district was equally available. Cyber City, Golf Course Road and selected institutional Noida projects had much tighter usable vacancy. Much of NCR’s headline availability sat in peripheral, strata-owned or operationally weaker buildings.

For occupiers seeking 100,000 sq ft or more, the practical shortlist was constrained by ownership structure, floor-plate continuity, power resilience, fire and life-safety compliance, parking, metro access and expansion rights. This explains why rents could rise in selected buildings even while the regional vacancy rate remained above 20%.

11 · Workplace design and return-to-office

The office was increasingly planned as a collaboration and culture asset rather than simply a container for desks. Typical briefs placed greater emphasis on meeting rooms, informal collaboration, food and wellness amenities, touchless access and indoor-air systems. Lower workstation density sometimes offset headcount growth, but occupiers also required more shared and social space.

Return-to-office policies varied widely by sector. Domestic corporates and aviation-linked businesses moved faster toward regular attendance. Technology and professional-services companies retained hybrid schedules, although many still committed to long leases because fit-out, hiring and consolidation decisions operated over multi-year horizons.

12 · Infrastructure and emerging corridors

Noida Expressway benefited from road connectivity, modern campuses and access to residential catchments across Noida and Greater Noida. In Gurugram, Golf Course Extension Road, SPR and NH-8 non-prime locations attracted occupiers requiring large floor plates at a discount to Cyber City and Golf Course Road.

Infrastructure did not erase location risk. Last-mile access, peak-hour congestion, staff transport and the depth of nearby amenities continued to affect employee acceptance and therefore leasing velocity. Buildings located near established residential and transit networks generally performed better than similarly priced projects with weaker last-mile connections.

13 · Landlord and occupier negotiating positions

Occupiers retained leverage in high-vacancy buildings through rent-free periods, fit-out contributions and expansion options. In tight prime assets, landlords were better positioned to protect face rents and longer lock-ins. Effective rent therefore varied more than published asking rent suggested.

The most consequential commercial clauses included commencement linked to occupation certificates, fit-out periods, escalation, security deposits, restoration obligations, flexibility to sublease, contraction rights and options on adjacent floors. Large transactions increasingly combined a firm initial commitment with future expansion rights.

14 · Market risks entering 2023

The principal risks were a global technology slowdown, delayed outsourcing decisions, high construction and financing costs, and a potential mismatch between new peripheral supply and occupier-preferred locations. Startup funding conditions also weakened during the year, creating uncertainty for a demand segment that had expanded rapidly in 2021.

Balanced against these risks were enterprise flex adoption, domestic corporate expansion, GCC activity and a continuing flight to quality. The market entered 2023 stronger than it began 2022, but future performance was likely to diverge sharply by building quality and ownership structure.