Delhi–NCR Office Market Report 2023

Annual review of leasing, supply, vacancy, rents, flex growth and major transactions

Reporting date: January 2024
Coverage: Delhi, Gurugram and Noida | Period-authentic year-end assessment

Executive summary

Delhi–NCR sustained an exceptionally high level of office demand in 2023 despite slower global technology hiring. Savills recorded 11.3 million sq ft of gross absorption, matching 2022. JLL’s broader gross-leasing series placed NCR at approximately 13.2 msf, or 22.1% of India’s seven-city total. The difference reflects transaction definitions and coverage rather than an error.

Leasing again exceeded new completions. Savills’ Grade-A stock increased from 137.7 to approximately 143.0 msf, while vacancy declined from 21.9% to 19.8%. Rental values were broadly stable, with modest growth in Noida Sector 62 and Gurugram’s secondary business districts.

Demand composition shifted. Flexible workspace operators became one of the most visible sources of large commitments. IT-BPM remained important, while manufacturing, BFSI, consulting, healthcare and domestic companies diversified demand. The largest disclosed transaction was TCS’s approximately 550,000 sq ft commitment at Assotech Business Cresterra on Noida Expressway.

Headline indicators

01 · Leasing trajectory

H1 gross absorption reached 6.0 msf, 7% above H1 2022. Q1 recorded 3.4 msf and Q2 2.6 msf on Savills’ series. A broader market measure placed Q2 at 3.6 msf, the highest among India’s major cities that quarter. H2 remained active enough to bring the year to 11.3 msf.

The unchanged annual total concealed a change in occupier mix. Technology companies became more selective amid global cost controls, but flex operators, domestic businesses, manufacturing-linked R&D, BFSI and consulting requirements filled much of the gap. NCR therefore demonstrated greater sectoral breadth than in earlier technology-led cycles.

02 · Stock, supply and vacancy

The Grade-A stock basket rose to approximately 143.0 msf. Fresh leasing exceeded completions, driving vacancy down to 19.8%. The decline was not uniform: high-quality buildings in established districts tightened faster than older or fragmented assets.

Noida Expressway was the main completion corridor in H1, accounting for 78% of supply; 64% of that new space was intended for IT occupiers. Developers remained disciplined because financing costs were higher and occupiers increasingly preferred completed or near-complete assets. The resulting balance between supply and demand helped vacancy compress without producing widespread rent spikes.

03 · Geographic market structure

Gurugram CBD

Cyber City, MG Road, Golf Course Road and NH-8 Prime remained the preferred address for headquarters, professional services and multinational occupiers. Limited immediate availability protected rents, although large requirements increasingly looked beyond the CBD.

Gurugram SBD and PBD

Golf Course Extension Road, Udyog Vihar, Sohna Road, SPR and the wider southern sectors captured flex operators, manufacturing-linked occupiers and cost-sensitive corporate users. Incuspaze’s 345,000 sq ft and Maruti’s 300,000 sq ft transactions illustrate the scale available outside the core.

Noida Expressway

Noida Expressway strengthened its position as NCR’s large-campus technology corridor. TCS’s 550,000 sq ft transaction and Synopsis/Simpliwork’s 250,000 sq ft commitment demonstrated both conventional and managed-space demand. New supply, lower occupancy costs and access to engineering talent remained the principal advantages.

Noida Sector 62 cluster

Sector 62 benefited from limited availability in quality buildings and recorded the region’s strongest rental growth, approximately 4%. Smartworks’ 350,000 sq ft Logix transaction underlined the cluster’s importance to flex and IT-enabled occupiers.

Delhi and Aerocity

Delhi continued to be a small-volume, high-rent market. Aerocity remained strategically important for aviation, hospitality, consulting and international businesses requiring airport access. Connaught Place and South Delhi business districts served smaller premium requirements but offered little scalable new supply.

04 · Rental ranges at year-end

Quoted rents were broadly stable. Sector 62 grew about 4% and Gurugram SBD approximately 3%. Effective rents depended on fit-out condition, rent-free periods, escalation and security deposits.

05 · Occupier sectors and flexible workspace

Flexible workspace shifted from a tactical pandemic product to a mainstream enterprise channel. Operators leased entire buildings or large blocks and provided fitted, managed environments to corporate clients. Smartworks alone announced approximately 530,000 sq ft across Gurugram and Noida during the year.

IT-BPM remained a core demand source but no longer determined the entire market direction. Engineering and manufacturing occupiers expanded corporate, digital and R&D functions. BFSI activity benefited Gurugram and Noida; consulting and research occupiers preferred institutional buildings; healthcare and consumer-internet firms continued targeted expansion.

This diversification reduced NCR’s dependence on a single outsourcing cycle, although global technology and financial-sector caution remained important risks.

06 · Largest identifiable office transactions

The Smartworks combined announcement overlaps with at least one individually reported transaction and must not be added to the individual rows when calculating a total. The table is a disclosure register, not an additive market total.

Complete sourced transaction register

This expanded register contains 25 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 · Capital, buildings and occupier preferences

Flight to quality deepened. Occupiers prioritised single ownership, strong building management, ESG performance, power resilience, air quality and employee amenities. Sustainability moved closer to a leasing criterion as multinational companies aligned property decisions with carbon commitments.

Large contiguous blocks in completed projects gained value. Strata-owned buildings remained competitive for smaller requirements but faced disadvantages in consistent services, expansion options and institutional compliance. Managed-office partnerships provided some landlords with a route to faster occupancy.

08 · Outlook as of January 2024

Savills expected 12–13 msf of 2024 demand against approximately 7.0 msf of new supply. Around 60% of completions were expected in Noida and 30% in Gurugram. If realised, this imbalance could reduce vacancy toward 15–16%, particularly in high-quality stock.

The principal demand supports were service exports, domestic economic growth, manufacturing investment, GCC expansion, five-day office policies and flex adoption. Risks included global growth weakness, delayed corporate decisions and a mismatch between available peripheral stock and occupiers’ preferred institutional buildings.

09 · Flexible workspace becomes institutional demand

The year’s flex transactions were no longer dominated by small coworking centres. Smartworks committed to large buildings in both Gurugram and Noida, Incuspaze took approximately 345,000 sq ft, and Simpliwork-linked space supported a major Noida Expressway requirement. Operators increasingly competed on enterprise-grade security, dedicated branding, customised fit-outs and multi-city contracts.

This created a layered leasing market. A landlord could lease a complete asset to an operator, which then contracted with several enterprise users. Transaction databases must distinguish the operator head lease from downstream managed-office occupation to avoid double counting.

10 · GCCs and the diversification of demand

Global capability centres increasingly combined technology, finance, analytics, engineering and business operations within the same Indian hub. NCR’s large professional workforce, international airport, corporate ecosystem and competitive rents supported this demand, although Bengaluru and Hyderabad remained powerful competitors.

The implications extended beyond transaction volume. GCCs generally sought resilient power and connectivity, stronger sustainability performance, sophisticated security, larger collaboration areas and the ability to expand within the same campus. These requirements favoured institutional assets and accelerated the quality divide within the vacancy stock.

11 · The flight-to-quality premium

Regional vacancy fell, but building selection became more exacting. Occupiers differentiated assets by ownership, maintenance, air quality, energy efficiency, parking, amenity density, transit access and landlord execution. A nominally cheaper building could carry a higher effective cost if it required extensive upgrades, staff transport or operational compromises.

Prime rent resilience therefore coexisted with substantial vacancy elsewhere. Noida Sector 62 and selected Gurugram SBD projects recorded rental growth because immediately usable Grade-A options were limited, not because every building in those districts had become tight.

12 · Sustainability moves into leasing decisions

Energy use, water management, waste systems and green-building certification moved closer to the centre of multinational property decisions. Occupiers with corporate carbon commitments increasingly requested building-level consumption data and renewable-energy options. Efficient buildings also offered a direct operating-cost advantage during a period of higher utility and fit-out costs.

Landlords responded through certification, HVAC upgrades, smart metering and improvements to common areas. The strongest assets positioned sustainability as part of employee experience and business continuity rather than a standalone badge.

13 · Infrastructure and location effects

Noida Expressway continued to gain from campus supply, road infrastructure and access to technical talent. Sector 62 offered established connectivity and a deep office ecosystem but had fewer large, immediately available institutional options. Gurugram’s SBD and peripheral corridors offered scale and rental arbitrage, while the CBD retained advantages in address, amenities and access to senior talent.

Aerocity remained a specialised premium district. Its airport connectivity supported aviation, consulting, international business and hospitality-linked requirements, but rents and limited availability constrained broad-based take-up.

14 · Landlord strategies and effective rents

Landlords used fitted solutions, managed-office partnerships and phased commitments to accelerate leasing. Occupiers negotiated rent-free fit-out periods, capex contributions, expansion rights and protection against project delays. As a result, headline rent was only one part of the economic package.

In high-vacancy or fragmented buildings, occupiers retained significant leverage. In tight single-owner projects, landlords could insist on stronger covenants, longer lock-ins and firmer escalations. The market was increasingly asset-specific rather than governed by one NCR-wide rent trend.

15 · Indicators to watch in 2024

The most useful forward indicators were active large requirements, pre-commitment levels in projects nearing completion, flex-operator occupancy, technology and GCC hiring, and the pace at which employees returned to offices. New supply required particular scrutiny: a large headline pipeline would affect vacancy only when projects received approvals and became operational.

The central market question was whether demand could continue to exceed completions. If it did, prime vacancy would tighten further and rental growth would broaden. If global corporate decisions slowed, secondary buildings would bear most of the adjustment while the best institutional assets remained comparatively resilient.