New Delhi: Demand for commercial space in Delhi-NCR is estimated to reach around 11 million sq ft in 2023, driven by the return of working professionals to offices, according to international property consultant Savills.
As per reports, the IT-BPM sector is expected to drive the city’s commercial market this year as well. The second largest contribution to leasing activity is expected to come from flexible workspaces.
Emerging sectors such as e-commerce, edtech, media & advertising, and travel & tourism are expected to account for a significant share of the overall leasing.
“NCR is a major economic hub in India and is home to a large number of IT companies, leading to a high demand for office space in the region. The return of working professionals to offices has led to an increase in the demand for office space, resulting in leasing There has been high transaction activity in the U.S. However, the slowdown in the global market may have an impact on the leasing activity among global corporates in the near term,” said Rajat Johar, MD, Delhi-NCR, Savills India.
Vacancy levels are likely to remain range-bound in 2023, while average rentals are expected to remain stable, except in a few pockets where limited fresh supply could see an increase.
A robust supply of 9.4 million sq ft is expected to inflow in the city by 2023. Around 70% of the new completions will be concentrated in the micro-markets of Gurugram and Noida Expressway.
According to Savills, the sector is slated to record 11.3 million sq ft of gross absorption in 2022, with a YOY growth of 46% and the IT-BPM sector, with a 24% share, to continue to be the largest contributor to leasing activity in 2022.
Large size deals of over 100,000 sq ft fueled the leasing activity in the Delhi-NCR region, which accounted for 39% of the total office space absorption in 2022. Mid-sized deals (25,000-99,999 sq ft) and small-sized deals (<25,000 sq ft) contributed 37% and 24% share respectively
The overall vacancy level in Delhi-NCR is set to decline from 23.0% in 2021 to 21.9% in 2022, as leasing activity outpaced new completions during the year.
“The average rental in the NCR region has seen an annual growth of 8%. MG Road and Noida Expressway micro-markets witnessed the highest growth in rentals with 23% and 14% YOY growth, respectively,” it said.
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