New Delhi, March 13, 2025: The National Capital Region (NCR) office market recorded a 61% year-on-year increase in net absorption, the highest among the top 7 cities, to reach 9.5 million sq. ft. in 2024 primarily driven by robust demand from Global Capability Centers (GCCs) and the technology sector, said a report by ANAROCK.
The co-working sector accounted for 34% of the total transactions, marking a 6% increase from 2023. Conversely, the IT-ITeS sector’s share decreased by 3% to 29%, while consulting business occupiers contributed 12% to the overall transactions.
Mr. Peush Jain, MD-Commercial Leasing and Advisory, ANAROCK Group said: “The year 2024 emerged as a transformative year for the office real estate market, characterized by robust absorption, strategic expansion by diverse sectors, and strong rental growth across major markets. A notable highlight was the net office absorption of nearly 50 million sq. ft. in top 7 cities, with NCR capturing 19% of the total absorption.”
According to the report, the city’s market witnessed a reduction in new office completions, declining by 22% to 5.9 million sq. ft. in 2024 compared to 7.6 million sq. ft. in 2023.
This controlled new supply addition, coupled with robust absorption, led to a 2.6% reduction in average vacancy rates, bringing them down to 22.6%. The moderation in vacancy rates suggests improving market fundamentals, despite NCR maintaining relatively higher vacancy levels compared to other major office markets in India.
The average office rental rates in NCR increased by 5% year-on-year to Rs 86/sq. ft./month, reflecting a steady 10% growth since 2019.
Among the key micro-markets, Noida emerged as the most dynamic micro-market with a 6% annual rental growth, although it maintained its position as the most affordable market with rents ranging from Rs 60-130/sq. ft./month.
The report further added that the positive absorption trends, especially in the co-working segment, along with consistent rental appreciation across micro-markets, indicate strong occupier confidence in NCR’s office market. However, the reduced pace of new completions and the still-elevated vacancy rates present both challenges and opportunities for market stabilization in the coming periods.
The net office absorption in India’s top 7 cities reached nearly 50 million sq. ft., marking a substantial 29% year-on-year increase from 38.64 million sq. ft. in 2023.