The Grade-A office market in Delhi National Capital Region (NCR) continues to display strong fundamentals, supported by sustained leasing demand that is outpacing new supply, according to a recent ICRA market analysis. Occupancy levels are on a steady upward trajectory and are expected to reach 80.5–81.0% by March 2027.
The market has witnessed a remarkable turnaround since March 2023, with occupancy rising by 600 basis points to 78.6% as of September 2025. This improvement has been underpinned by consistent net absorption surpassing fresh supply. In FY2025, while new supply totaled 7.4 million square feet (msf), net absorption stood at a robust 11.4 msf. The trend continued into the first half of FY2026, with 7.3 msf of fresh supply against 8.0 msf of net absorption. Healthy leasing activity from the consulting and IT-BPM sectors has been a key driver of demand.
Looking ahead, the market is expected to face an additional 14 msf of supply in FY2026 and around 11 msf in FY2027. Despite this, robust leasing momentum is likely to keep the market tight. Occupancy is projected to reach 78.5–79.0% by March 2026 and rise further to 80.5–81.0% by March 2027. Notably, a significant portion of upcoming supply is already committed, with approximately 31% of the 17.5 msf expected between H2 FY2026 and FY2027 pre-leased.
Delhi NCR remains a critical hub for office space in India, accounting for 20% of the total Grade-A office stock among the country’s top six cities, roughly 204 msf. Gurugram leads the NCR market with a 60% share, followed by Noida and Delhi. Key micro-markets including Sector 24 (Cyber City), Sector 62 (Noida), and Sector 48 (Gurugram) together hold 17% of the city’s office supply. Vacancy is expected to remain low in Sector 24, which has no new supply, while Sectors 62 and 48 are projected to see further reductions in vacancy due to steady absorption and limited new additions.
Despite the market’s overall strength, Delhi NCR records the highest vacancies among India’s top six office markets. This is largely due to lower occupancy rates of 50–55% in peripheral business districts of Gurugram, where older assets maintain moderate occupancy levels. The market is also fragmented, with the top 10 developers holding 40% of Grade-A office stock, highlighting the presence of numerous regional players. Between FY2018 and FY2025, Delhi NCR office stock recorded a compound annual growth rate (CAGR) of nearly 6%, slightly below the 7% CAGR observed across the top six cities.
ICRA expects average rental rates in the Delhi NCR Grade-A office market to grow by 3–4% in FY2026, supported by positive demand-supply dynamics.
On a national level, despite global headwinds such as policy tightening and trade restrictions in the US, office leasing activities across India have remained resilient in H1 FY2026. Analysts note that macroeconomic and geopolitical factors will be closely monitored in the coming months to assess their potential impact on leasing trends.
Delhi NCR’s Grade-A office market continues to benefit from strong absorption, limited supply in key micro-markets, and healthy sectoral demand, positioning it as a preferred destination for office space in India.
