Office Space Absorption Up 11 Percent in Delhi-NCR

"Multinationals based out of Europe accounted for 60 per cent of demand over the quarter, which was 16 per cent in the previous quarter. Multinationals based out of U.S. and India contributed 10 per cent and 11 per cent respectively," DTZ said.

Gurgaon witnessed a 5 per cent q-o-q increase in demand for space, primarily from the IT/ITES domain. Noida and Delhi saw a q-o-q decline. "There was, however, an increase in enquiries for leasing space which are expected to close in the coming quarter."

Rentals remained stable in all the micro-markets in Q2 due to new supply.

DTZ noted that rentals are not expected to see significant growth due to the currently high vacancy levels and robust development pipeline despite expected growth in demand during the second half of this year.

On supply, DTZ said Delhi-NCR witnessed a 75 per cent rise in project completions in Q2 over the previous quarter.

"New supply of 5.3 million sq. ft. became operational in Q2 across thirteen projects in the PBD and SBD regions," the consultant said.

Vacancy in Q2 stood at 32.6 per cent, an increase from 28.9 per cent in Q1 due to addition of new space in the market. In absolute terms, vacancy in Q2 was 28.9 million sq. ft. compared to 24 million sq. ft. in the previous quarter.

Noida contributed 37 per cent to overall vacancy; Gurgaon contributed 32 per cent, while Delhi's secondary business district (SBD) contributed 30 per cent.