The growth of rentals in the commercial real estate market in Delhi-NCR remained static in the first half of 2016 as compared to first half of 2015, according to a survey by real estate consultant JLL. Among the Delhi-NCR commercial market, while Gurgaon records a slight increase as of 2Q16, Noida sees a decent rise but on a lower base.
“At Rs 77 per sq ft per month (on a stock-weighted basis), the third largest office market in India – in terms of stock – showed no appreciation in city-level average rents. Among micro-markets, Gurgaon and Noida saw a marginal rise in rentals with average rents increasing to Rs 75 in Gurgaon, and Rs 43 (as of 2Q16) in Noida, clocking a y-o-y increase of 1 per cent and 5 per cent, respectively,” Santhosh Kumar, CEO – Operations & International Director, JLL India said.
Amongst the sectors that remain the prominent occupiers in the Delhi-NCR office market are technology, banking, pharmaceutical, real estate & construction, transport, consumer goods and professional services. New age sectors and corporate occupiers prefer office buildings in Gurgaon and Noida whereas banking and financial institutions go for central business district (CBD) and secondary business district (SBD).
IT/ ITeS players prefer Noida and Gurgaon micro-markets as they are relatively affordable in rents. “The profile of tenants has changed in recent years, however, in certain precincts of these micro-markets such as Cyber City, where rents are inching closer to triple digits. From being back offices with strict dependence on cost arbitrage, the tenant profile now includes consulting, high-tech engineering and design firms. Presence of non-IT companies in such traditional IT holdouts has also increased, ” JLL’s Santhosh Kumar added.
Gurgaon has most grade-A offices stocks followed by Noida and secondary business district, while Delhi has very limited supply of grade-A office stock. Gurgaon and Noida are key office corridors as Delhi doesn’t have adequate land to offer . Also, Delhi has often seen developers employ the strata sale model while lease model is more prevalent in the suburban locations, which makes the latter more attractive to large occupiers.