M A R K E T B E AT

DELHI NCR
Office Q4 2023

3.7 msf GROSS LEASING (Q4 2023)
2.9 msf NEW COMPLETIONS (Q4 2023)
Lease momentum continues during Q4; Flex, IT-BPM and E&M dominate leasing
Delhi NCR saw gross leasing volume (GLV) of 3.7 msf during Q4, highest volume recorded in year 2023. The GLV was ~10% higher on a q-o-q basis,
and marginally lower than the healthy volumes recorded last year same quarter. Bulk of this GLV comprised of fresh space take-up with a share of 83%,
followed by pre-commitments that acquired 11% share. Interestingly, flex space sector was the biggest consumer of space in fourth quarter with a 24%
share, piping the usually dominant IT-BPM sector that had a 23% share in leasing. Engineering & manufacturing (E&M) was closely following with a 22%
share in leasing. Once again, prime markets of Gurgaon, in particular areas such as NH-8 Prime, SPR and Cybercity, accounted for a dominant 62%
share. Noida secured 34% share during the quarter, contributed heavily by the Expressway and Sector-62 markets. In terms of net absorption, Delhi
NCR recorded 1.6 msf during Q4-23, marking a 34% increase from Q3-23, but a 28% decrease compared to the strong Q4 2022.

The annual gross leasing activity reached 13.6 msf which was merely 5% lower than the record volumes seen in 2022. IT-BPM sector led the annual
19.34 msf UPCOMING SUPPLY
(2024 – 2026) demand with a 27% share, followed by Engineering & Manufacturing sector and Flexible Workspaces with 17% and 15% share, respectively. The annual
net absorption for 2023 stood at 5.4 msf, nearly 24% lower than last year.
Vacancy rates inch-up marginally in Q4 as heavy supply enter
Delhi NCR market received an influx of approx. 2.9 msf during the quarter taking the total annual launches for 2023 to 4.9 msf. Owing to a heavy supply
MARKET INDICATORS OVERALL entering the city in Q4, which was nearly 1.2X higher than the average of past 6 quarters supply, vacancy rate have increased slightly by 50 basis points
Q4 2023 on a q-o-q basis. However, a notable drop of 1.2% can be observed when compared to Q4-22 vacancy. Prime submarkets such as Cyber city, NH8
Prime and Golf Course Road in Gurugram, Noida city 2 in Noida and Aerocity region in Delhi continue to boast of tight vacancies and steady demand.
12 month There is visibility of over 19 msf of supply coming-up from 2024 until 2026, with nearly 44% of that coming in prime submarkets of Gurgaon and Noida.
Q4 2022 Q4 2023 This is likely to push vacancy rate higher, although a strong demand is anticipated to act as a counterforce to some extent.
Forecast

Overall
25.57% 24.39% Rentals rise marginally in Q4
Vacancy
During Q4-23, Delhi NCR witnessed an increase of 1% q-o-q and a notable annual rental growth of 4%. This growth in rentals may be attributed to a
Weighted Average
Net Asking Rents 62.5 64.8 consistent leasing activity during the quarter as well as the year despite heavy supply entering. Also, given the influx of superior grade office supply in
(INR/sf/month) upcoming quarters, the rentals may witness a further uprise.
YTD Net 7,089,616 5,403,357 NET ABSORPTION & NEW SUPPLY OVERALL VACANCY & WEIGHTED AVERAGE ASKING RENT
Absorption (sf)
70 30%
14
60 25%
12
50 20%
10
40
8 15%
30
6 20 10%
4 10 5%
2 0 0%

Q3 2018

Q1 2022
Q1 2018
Q2 2018

Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021

Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
2024F
0
2018 2019 2020 2021 2022 2023 2024F
NET ABSORPTION (MSF) NEW SUPPLY (MSF) WEIGHTED AVERAGE RENTS (INR/SF/MONTH) OVERALL VACANCY(%)
M A R K E T B E AT

DELHI NCR
Office Q4 2023
MARKET STATISTICS
PLANNED & UNDER GRADE A WTD. AVG. RENT*
INVENTORY YTD LEASING YTD CONSTRUCTION YTD NET
SUBMARKET VACANCY CONSTRUCTION
(SF) ACTIVITY# (SF) COMPLETIONS (SF) ABSORPTION (SF) INR/SF/MO US$/SF/YR EUR/SF/YR
(SF)^

Delhi CBD 1,483,547 20.75% 15,819 50,000 0 15,500 280 40.34 37.50
South-East Delhi 7,092,653 15.98% 438,469 0 267,000 294,472 102.3 14.74 13.70
Delhi International Airport (DIAL) 1,366,825 4.99% 128,900 3,445,000 0 68,900 194.3 27.99 26.02
Cyber City 15,712,813 3.70% 2,780,171 2,000,000 0 84,589 119.5 17.21 16.00
MG Road 3,331,886 13.37% 595,450 0 0 81,106 120.6 17.37 16.15
NH8 – Prime 15,516,763 13.63% 2,114,817 2,359,993 0 -128,590 93.2 13.43 12.48
Golf Course Road 5,757,262 4.87% 473,731 962,000 0 38,359 93.8 13.51 12.56
Gurugram Others 47,306,218 37.56% 2,772,475 3,132,714 2,264,527 1,525,628 59.32 8.55 7.94
Noida 40,324,165 27.11% 4,246,059 7,387,500 2,389,211 3,423,392 53.04 7.64 7.10
Total 137,892,132 24.39% 13,565,891 19,337,207 4,920,738 5,403,357 64.8 9.33 8.68

The report highlights Grade A details only. Certain indicators are historically corrected by addition / deletion of older / refurbished projects as per grade A classification and accounting for
changes in built-up / leasable area besides adjusting tenant leases to reflect accurate market conditions.
^ Includes planned & under construction projects until 2026
Net absorption refers to the incremental new space take-up Nikita Sharma
#YTD gross leasing activity includes pre commitments and term renewals
Assistant Manager, Research Services
*Weighted average rental rates for vacant spaces that provide core facility, high-side air conditioning and 100% power back up
IT-BPM – Information Technology – Business Process Management +91 124 4695555 / Nikita.Sharma@cushwake.com
Key to submarkets:
Delhi CBD – Includes Connaught Place Suvishesh Valsan
South-East Delhi – Includes Saket, Jasola, Malviya Nagar, Vasant Kunj, Nehru Place, Shastri Park, New Friends Colony, Okhla, Munirka and Parts of Shalimar Bagh and Shivaji Marg Director, Research Services
Delhi International Airport (DIAL) – Includes Aerocity
Gurugram Others – includes Sohna Road, Golf Course Extension Road, Udyog Vihar, NH-8 Non Prime, Gurgaon-Faridabad Road and Southern Peripheral Road and excludes Manesar +91 22 67715555 / Suvishesh.valsan@cushwake.com
Noida – excludes Greater Noida
US$ 1 = INR 83.3 € 1 = INR 89.6
Numbers for the fourth quarter are based on market information collected until 20 th December 2023

KEY LEASE TRANSACTIONS Q4 2023

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