Delhi-NCR Continues to Drive Office Space Leasing; Faridabad to Shine

By Jatin Goel, New Delhi, December 26, 2024: Delhi-NCR remains a dominant player in India’s burgeoning office space leasing market, which is witnessing record-breaking activity in 2024. According to a JLL report released in October, India’s gross leasing activity (GLA), marking a 19 per cent year-on-year growth, reached an unprecedented 53.8 million sq. ft. for the first three quarters of 2024. Driven by strong demand from both global and domestic occupiers, this robust performance graph is expected to reach a historic milestone of 70 million sq. ft. by the end of the year, as mentioned by JLL in its report.

What is most remarkable about this data is the growing prominence of Delhi-NCR, and its emergence as a force to reckon with, accounting for 14 per cent of the leasing activity between January and September. In the third quarter alone, Delhi-NCR recorded a 23.1 per cent share of GLA, cementing its position as a key driver in the market alongside Bengaluru. Global Capability Centres (GCCs) led the leasing activity, contributing 36.2 per cent, while flexible office spaces accounted for 22 per cent, their highest-ever share. Much of it could be ascribed to the construction of Noida Airport.

Coincidentally, along with other infrastructural developments, Noida Airport was also instrumental in catalyzing the rise of Faridabad, one of NCR’s rapidly growing cities. As a result, it is now poised to carve a niche in this booming market. A region that witnessed its eclipse with the growth of Gurgaon and Noida, Faridabad, today is entirely on a different track and is leveraging its strategic location, enhanced connectivity, and affordability to attract investors and businesses alike.

Faridabad: A Rising Star on NCR’s Commercial Map

Market analysts believe that Faridabad’s commercial real estate market has undergone a transformative shift over the past few years. Much of it is underpinned by large-scale infrastructure development. The Delhi-Mumbai Industrial Corridor (DMIC), Eastern Peripheral Expressway (EPE), the Faridabad-Noida-Ghaziabad (FNG) Expressway, and the rapid construction of Jewar-Faridabad Expressway have significantly boosted the city’s accessibility, making it an attractive destination for corporates and investors.

These factors have not only boosted the city’s real estate prospects, propelling the residential, commercial, and office real estate development but also led to a significant rental appreciation in Faridabad’s office and commercial spaces, clocking an average annual growth of 8-10 per cent. This trend is expected to continue, and rental values, supported by an influx of professionals, enhanced connectivity to key NCR hubs, and the city’s affordability compared to Gurgaon and Noida, are projected to grow by 12-15 per cent over the next five years, as per conservative estimates.

The other key factor elevating Faridabad’s prominence is the healthcare sector. Establishments such as Amrita Hospital are massively boosting medical tourism, which, in turn, is increasing the demand for commercial spaces. Moreover, the city’s strategic location, offering seamless connectivity to South Delhi, Greater Noida, and the upcoming Jewar Airport, is further enhancing its lure for investors. The city’s upcoming master plan for 2031, which seeks to create a balanced ecosystem for residential, commercial, and infrastructural growth, also promises to transform it into a real estate hotspot.

Undoubtedly, with its robust growth trajectory and strategic advantages, Faridabad is well on its way to becoming a critical player in Delhi-NCR’s commercial real estate landscape, contributing to the region’s sustained dominance in India’s office space leasing market.

The author is Executive Director, Omaxe Group