Gurugram emerges as NCR’s growth engine as commercial market consolidates

Office leasing hit record highs in 2025, led by GCCs and IT firms, while retail vacancies tightened amid rising demand for Grade-A offices and organised retail.

Across the National Capital Region (NCR), the commercial real estate market moved from recovery to consolidation, with Gurugram emerging as the region’s growth engine. Strong leasing numbers, tightening vacancies and sustained occupier confidence translated into much-needed impetus for the office and retail segments, positioning Gurugram as NCR’s most resilient commercial ecosystem.

Knight Frank and CBRE data show strong office and retail absorption, with Cyber City and NH-8 driving leasing and rentals firming amid limited prime supply. (HT Archive)

According to Knight Frank, a global real estate consultancy firm, Delhi-NCR recorded its highest-ever office leasing of around 7.2 million square feet in the first half of 2025.Gurugram alone accounted for nearly 65% of this absorption, marking a rise of about 900 basis points compared to the same period last year. The surge was driven largely by strong demand from global capability centres (GCCs), IT services firms and domestic corporates for Grade-A office spaces, which refer to premium-quality commercial buildings typically located in prime business districts, with modern infrastructure, including large floor plates, advanced HVAC systems, high-speed elevators, 24/7 power backup, robust security, ample parking and strong digital connectivity.

Retail real estate mirrored this momentum. A report by CBRE, a global real estate consultancy firm, showed organised retail leasing in NCR rose nearly 25% in H1 2025, signalling a clear return of consumption-led growth. Fashion and apparel brands drove about 35% of leasing activity, while homeware and departmental stores together accounted for around 30%. Vacancy levels in Grade-A retail spaces in Gurugram dropped below 3%, tightening supply.

The momentum broadened in the third quarter. Cushman & Wakefield data showed NCR recorded 5.1 million sq ft of gross office leasing in Q3 2025, a 10% quarter-on-quarter rise and a 56% year-on-year jump. Gurugram dominated activity with a 72% share, led by NH-8 (Prime) and Cyber City. IT–BPM firms accounted for 35% of leasing, followed by engineering and manufacturing at 19% and BFSI at 9%.

Retail leasing also accelerated in Q3, touching 0.5 million sq ft – up 70% quarter-on-quarter and 88% year-on-year. Gurugram led with a 68% share. Food and beverage operators accounted for about 40% of leasing, with main streets outperforming malls and capturing nearly 58% of F&B demand, reflecting a shift towards experience-led, high-visibility retail.

Ajay Malik, chief strategy officer at Rise Infraventures Ltd, said, “If there was one takeaway from 2025, it’s that India’s commercial real estate moved from reaction to strategic planning… As 2026 begins, the sector looks less volatile, more predictable, and ready for long-term capital.”

Harinder Singh Hora, founder chairman of Reach Group, said that 2025 settled the debate between formats. “Retail performance is increasingly being defined by catchment depth, location advantage, visibility, design discipline, and tenant curation rather than format alone,” he said.

Yashank Wason, managing director of Royal Green Realty, added that 2025 reaffirmed Gurugram’s leadership. “Strong office absorption driven by GCCs, IT services and flexible workspace operators, along with rising organised retail demand, reinforced the importance of well-located, future-ready assets.”

Industry experts, however, cautioned that certain challenges could act as headwinds going forward. Rising land and construction costs, delays in approvals, pressure on civic infrastructure and traffic congestion remain concerns, particularly in high-demand micro-markets. Limited availability of Grade-A office and retail supply in prime locations has also begun pushing rentals higher, which could test affordability for some occupiers. Additionally, global economic uncertainties and geopolitical risks may influence expansion timelines of multinational firms, even as India continues to remain structurally attractive for long-term investment.

Sachin Gawri, founder and CEO of Rise Infraventures, said, “Gurugram’s journey from recovery to market leadership in 2025 highlights the maturity of its commercial ecosystem. However, sustaining this momentum will depend on how effectively infrastructure gaps, approval timelines and supply constraints are addressed. Demand is strong and visible, but execution, last-mile connectivity and policy efficiency will be critical as the market scales further into 2026.”