Delhi's Office Market To Add 5M Sq. Ft by 2027

After nearly a decade of constrained supply, Delhi's office real estate sector is gearing up for a significant rebound, with approximately 5 million square feet of new space expected to hit the market between 2025 and 2027.

This surge marks a departure from the intermittent additions seen since 2016, primarily hampered by limited developable land, according to a joint report by CBRE South Asia Pvt Ltd and the Confederation of Indian Industry (CII).

Titled "Delhi 2041: Shaping the Future of Real Estate", the report was unveiled on September 15, 2025 at the 2nd CII Delhi Real Estate Summit 2025. It underscores the capital's evolving property landscape, propelled by robust economic fundamentals, progressive policies, and strategic urban planning.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, highlighted the market's resilience. "Delhi’s strong economic potential has helped its property market not just to bounce back, but also start on a path of steady, high-quality growth," Magazine said. He noted a shift in buyer preferences towards amenities, sustainability, and design, reflecting rising affluence and a maturing market bolstered by clear regulations.

The report attributes this momentum to government initiatives like the Delhi Master Plan 2041, which envisions integrated urban expansion, including rural areas and affordable housing. Regulatory frameworks from bodies such as Delhi RERA (DLRERA) have instilled transparency, boosting investor confidence and attracting capital inflows. Cutting-edge technology and visionary planning are further catalysing growth, positioning Delhi as a key player in India's real estate narrative.

In the office segment, absorption during the first half of 2025 (January-June) stood at around 400,000 square feet, fuelled by optimism in core business districts. Research, consulting, and analytics firms led the charge with a 39% share, followed by flexible space operators at 23% and banking, financial services, and insurance (BFSI) at 18%. These sectors accounted for nearly 80% of total leasing, signalling a demand for modern, adaptable workspaces amid hybrid work models and digital transformation.

Retail activity also showed vigour, with 230,000 square feet absorbed in H1 2025. High streets dominated, comprising 72% of transactions, as consumers gravitated towards experiential formats. Fashion and apparel retailers topped demand at 35%, with homeware and department stores at 20%, and food and beverage operators at 17%. The influx of global luxury brands, coupled with rising disposable incomes, is expected to sustain this uptick. Premium spaces in key locations are drawing international players, enhancing Delhi's retail ecosystem.

The residential market in Delhi-NCR exhibited even stronger performance, with about 21,000 new launches in the first six months, a 35% year-on-year increase and matching sales of over 21,000 units. Luxury, premium, and high-end segments collectively drove 75% of sales, with high-end at 31%, premium at 26%, and luxury at 18%. This demand-supply dynamic has pushed capital values upward, especially in South-East and South-West Delhi, where appreciation has been notable.

Infrastructure developments are amplifying this growth. Expansions in the metro network and new expressways are unlocking peripheral areas, making them viable for investment and development. These projects not only improve connectivity but also promote balanced urban sprawl, aligning with the Master Plan's goals.

Experts view these trends as indicative of Delhi's maturation into a sophisticated real estate hub. "The city is becoming more affluent, and people want a better quality of life," Magazine added, emphasizing the role of regulations in fostering confidence. With sustained policy support and technological integration, the report projects continued expansion, potentially reshaping the capital's skyline and economic fabric.

As India aims for a $5-trillion economy, Delhi's real estate sector could serve as a bellwether, drawing parallels with global cities like Singapore or Dubai in terms of planned, sustainable growth. Stakeholders anticipate that the upcoming supply infusion will alleviate pent-up demand, stabilizing rents and encouraging further investments. However, challenges like land scarcity and environmental concerns remain, necessitating innovative solutions to ensure long-term viability.