While checking the statistics it is evident that NCR region has seen steady increase in office space requirements. The office space requirement got increased to 96 mn sqft in august 2017 from 47 mn sqft in 2010.
City of Noida, a part of NCR is most sought out destination for office space rentals because of its affordability according to the report presented by JLL consultants. Shortage of land parcels in Delhi is another factor that has influenced the fresh commercial office space in noida.
IT / ITES occupiers have chosen Noida / Gurgaon micro markets because their rentals are comparatively lesser than Delhi, told Manish Aggarwal, MD – North & East, JLL India. This difference in rental amount in Noida is the reason that will keep the city as favorite destination for people who wish to have their offices in big campuses and in places with SEZ facilities.
Builders of Delhi – NCR are very meticulously working towards providing new office spaces with good quality to fulfill the requirements of their clients. The buildings are getting constructed to have large floor plates to serve the big corporate and with smaller floor places to serve it companies and emerging startups. JLL report further adds that there is rental appreciation in office space segment of Delhi – NCR market in 1st quarter of 2017 when compared with 1st quarter of 2016. The rental figured increased by an average 1% amounting to rs 78 per sft per month in third largest office market of India, i.e Delhi – NCR (office assets across sbd, Delhi’s cbd, Gurgoan and Noida areas have been considered in arrival of this average). Gurgaon having high stock – weight of office stock, has influenced the average number to increase more.
Average rental percent in Delhi-SBD (secondary business district) have seen a 6 percent decline, But commercial areas of Noida saw an appreciation of 4 per cent. In the same way, rents of Delhi-CBD (central business district) decreased by 1.4 per cent (y-o-y), but rental in areas of Gurgaon got increased by 1.3 per cent in same period. Delhi CBD and SBD’s average rental went down to RS. 246 and RS. 138, respectively. Nevertheless commercial rental in cities of Gurgaon and Noida of went up to Rs. 76 and Rs. 44, respectively.
For the reason that there is lack in quality assets, the commercial leasing in Delhi – CBD areas got muted in first quarter of 2017. Only selected occupiers who are desperate took the spaces in cbd. With the exit of existing tenants and non arrival of new, Delhi micro market recorded worse performance in q1, 2017 when compared to last 13 quarters. Conversely, the net absorption in office space saw improvement in delhi-sbd areas because of availability of few quality projects as per the report. In Gurgaon, the rents of older strata-titled properties are likely to correct, Whereas established DLF Cyber city area as well as upcoming and existing quality it and other commercial projects are expected to have a demand hence there will be increase in rents over current prevailing rates. Gurgaon’s micro market will be driven by the above said two themes.
Occupancy demand for strata-titled projects is less in Delhi-sbd areas. Developers in city of Delhi have often done projects with strata sale model. Suburban areas in Delhi have leasing model in commercial properties in general. This model attracts a good number of occupants in these areas. Rental rates in few areas of Gurgaon have touched three digits in 2016 because of healthy demand, in particular DLF cyber city.
Central business district and secondary business districts in city of Delhi will be yielding ground for suburbs like Noida and Gurgaon to grow faster because of availability of cost effective and quality office facilities. Gurgaon and noida office markets have started attracting traditional and non it occupiers also. The absorption levels in these areas are very much higher and will be revolving without gap.
Gurgaon city heads the way with its grade-a office stock, followed by commercial office in noida and then delhi-sbd. The stock of grade-a office space in delhi-cbd is very minimal and also can be told as nil encouraging occupiers to look for office in noida and Gurgaon. Inadequate land for developing new office space in delhi is another reason for the fast development of commercial office in noida and Gurgaon.