Delhi NCR MarketBeat Reports

Delhi NCR saw gross leasing volume (GLV) of 3.01 MSF in Q2 2024. Fresh space take-up accounted for a 77% share; pre-commitments remain high at 23%. IT-BPM led the quarterly demand with 31% share, followed by professional services (20% share). Net absorption stood at 1.45 MSF, a 9.5% increase from Q2-23. Gurugram led demand, securing 61% followed by Noida (23% share). 0.31 MSF of supply addition was witnessed this quarter. Close to 1.73 MSF of supply is expected in next six months. City-level rentals witnessed rental increase of almost 2% on a q-o-q basis.

Delhi’s malls and main streets experienced ~ 0.51 MSF leasing activity, nearly 2x from Q1 2024 and a 54% increase compared to Q2 2023. In retail mall spaces, the fashion category dominated with a 38% share, followed by F&B with a 29% share. Main streets were primary drivers of this quarter's activity, with 0.36 MSF of leasing. Fashion dominated the city’s main street markets with a 37% share. City’s overall vacancy rate remained steady at 15.6%. Mall rentals remained stable. Prime main streets of Gurugram saw 5% q-o-q growth. South Delhi markets saw 7% q-o-q growth.

In Q2 2024, Delhi NCR experienced robust supply representing growth of ~1.8 times more than Q1 2024. H1 2024 supply was 40-60% higher than the annual launches seen in 2022 and 2021. Gurugram led quarterly supply (69%) followed by Noida (31%). Noida saw a significant increase, 1.5x the average of the past five quarters. High-end and Luxury segments dominated with 53% market share, an increase of nearly 1.5 times the average launch of the past five quarters. Mid segment comprised 45% of quarterly supply. Capital values grew 3-4% q-o-q. Headline city-wide rentals grew 1-2% q-o-q.

Warehouse leasing in Delhi NCR has declined by 57% on a yearly basis attributed to limited execution of large deals in 2023. Warehousing demand dropped by 52% with engineering and manufacturing sector accounting for 56% of warehouse leasing for the year. Industrial leasing activity for 2023 witnessed a 8% dip from a good year of 2022, but was higher than last 5 year average. The industrial demand in the second half was entirely concentrated in Gurgaon, primarily Manesar (42%). Quoted rentals increased by 5-10% in NCR and quoted land values increased by 12-17% attributed to major land deals closed in 2023. The other submarkets of NCR grew by 5 – 15% on an annual basis.

Q2 2024 witnessed massive investment inflows amounting to INR 231.5 Bn (USD 2.77 Bn), marking a 1.5x q-o-q growth. The Logistics & Industrial (L&I) segment led with 56% share.