Office rentals in Delhi-NCR have increased by an average of 8 percent in the first six months of 2022, according to property consultant Savills India. The latest report from Savills, titled ‘India Market Watch Office – H1 2022’, states that gross absorption in Delhi-NCR during this period reached 5.6 million square feet, which is a 194 percent increase compared to H1 2021.

The report highlights that the leasing activity in Gurugram and Noida differed in the first half of 2022 compared to the previous year. Gurugram accounted for approximately 64 percent of the overall absorption in Delhi-NCR, while Noida only contributed 34 percent. In terms of specific locations, absorption in Delhi decreased from 4 percent in H1 2021 to 2 percent in H1 2022.

The report also mentions that average rentals in Delhi have increased by 8 percent year-on-year. MG Road and the Gurugram micro markets experienced the highest rental appreciation, with 20 percent and 15 percent year-on-year growth respectively.

Shweta Sawhney, MD of Delhi-NCR at Savills India, believes that after the challenges faced during the pandemic, the Delhi-NCR area is now seeing a positive trend in commercial leasing activity. She expects this momentum to continue in 2022 as companies across sectors emerge and review their workplace strategies.

However, the supply of office spaces did not keep up with the growth in leasing activity. Supply in Delhi-NCR declined by 44 percent annually to 2.2 million square feet.

Pankaj Pal, Group Executive Director of Gurugram-based AIPL, which is involved in the development of various commercial projects in the IT city, noted that there was a high demand for Grade-A offices in the first half of 2022. In many locations in Gurugram, the demand surpassed the available supply.

Pal attributed this increased demand to sectors such as IT and business process management, which are expanding their workforce and have robust expansion plans. Additionally, there has been an influx of multinationals establishing their headquarters and global capability centers (GCCs), further driving the demand for quality office spaces in Gurugram.