The National Capital Region (NCR) office market recorded a 61 per cent year-on-year increase in net absorption, the highest among the top 7 cities, to reach 9.5 million sq ft in 2024, a report by ANAROCK said.

It said that growth is primarily driven by robust demand from Global Capability Centers (GCCs) and the technology sector.

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The co-working sector accounted for 34 per cent of the total transactions, marking a 6 per cent increase from 2023. Conversely, the IT-ITeS sector’s share decreased by 3 per cent to 29 per cent , while consulting business occupiers contributed 12 per cent to the overall transactions.

According to the report, the city’s market witnessed a reduction in new office completions, declining by 22 per cent to 5.9 million sq ft in 2024 compared to 7.6 million sq ft in 2023.

This controlled new supply addition, coupled with robust absorption, led to a 2.6per cent reduction in average vacancy rates, bringing them down to 22.6per cent.

The moderation in vacancy rates suggests improving market fundamentals, despite NCR maintaining relatively higher vacancy levels compared to other major office markets in India.

Peush Jain, MD-Commercial Leasing and Advisory, ANAROCK Group said, “The year 2024 emerged as a transformative year for the office real estate market, characterized by robust absorption, strategic expansion by diverse sectors, and strong rental growth across major markets.

“A notable highlight was the net office absorption of nearly 50 million sq ft in top 7 cities, with NCR capturing 19 per cent of the total absorption.”

ANAROCK highlighted that the average office rental rates in NCR increased by 5 per cent year-on-year to Rs 86/sq ft./month, reflecting a steady 10 per cent growth since 2019.

Among the key micro-markets, Noida emerged as the most dynamic micro-market with a 6 per cent annual rental growth, although it maintained its position as the most affordable market with rents ranging from Rs 60-130/sq ft/month.

The net office absorption in India’s top 7 cities reached nearly 50 million sq ft, marking a substantial 29 per cent year-on-year increase from 38.64 million sq ft in 2023.

The report further added that the positive absorption trends, especially in the co-working segment, along with consistent rental appreciation across micro-markets, indicate strong occupier confidence in NCR’s office market.

However, the reduced pace of new completions and the still-elevated vacancy rates present both challenges and opportunities for market stabilisation in the coming periods.