Delhi, Gurgaon, Noida property market: Bengaluru on top, but NCR follows in office leasing space

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Updated: January 17, 2018 5:56:14 PM

The National Capital Region witnessed an overall office leasing of ~7.9 million sq ft in 2017, occupying an 18% market share, next only to Bengaluru.

NCR, national capital region, Delhi, noida, gurugram, office space, 18% market share in office leasing, BengaluruPremium buildings in preferred micro markets, such as Aerocity, Connaught Place, Golf Course Road and Cybercity continued to command a premium over the market average.

The National Capital Region (NCR) witnessed an overall office leasing of ~7.9 million sq ft in 2017, occupying an 18% market share, next only to Bengaluru. Overall a rise of ~17 % in the office absorption was witnessed from 2016, when it had leased ~6.57 million sq ft, according to Colliers Research.

“The NCR’s office real estate market remains the second-most preferred destination for occupiers across the country, grabbing 18% market share, only behind Bengaluru. Premium buildings in preferred micro markets, such as Aerocity, Connaught Place, Golf Course Road and Cybercity continued to command a premium over the market average. There is visible tenant appetite for higher quality office, hence ensuring Grade A developments to charge premium over average market rents,” said Sanjay Chatrath, Executive Director, NCR, Colliers International India.

Delhi: The leasing activity remained aggressive in 2017, supplemented by robust gross absorption of 1.31 million sq ft (0.1 million sq m), representing an optimistic surge of 31% YoY. Aerocity emerged as the torchbearer in the overall leasing activity, with about 28% share followed by Connaught Place (CBD) (21%), Jasola (8%), and Okhla (7%). Other Secondary Business Districts (SBDs) micromarkets such as Nehru Place, Saket, Bikaji Kama Place contributed lesser transactions. In 2017, as a direct outcome of preference among occupiers, Aerocity recorded 17% YoY increase in rents. Other traditional SBD micromarkets such as Saket and Nehru Place were impacted negatively and recorded a 3-9% decline in rents in 2017.

Gurugram: The city remained the preferred office destination in the National Capital Region (NCR) with about 57% share in overall leasing. The Gurgaon office market recorded nearly 4.5 million sq ft (0.4 million sq m) of leasing volume in 2017, excluding pre-commitments and renewals, representing a marginal increase of 5.1% YoY. The demand for Grade A office space was primarily driven by technology companies, which contributed 41% in overall demand followed by banking, financial services & insurance (18%), and engineering & manufacturing (12%). Apart from this, media and entertainment, fast moving capital goods (FMCG) and co-working operators leased smaller office spaces that formed rest of the transaction volume.

NOIDA: After witnessing a record year in 2016, Noida’s commercial office market observed softening of leasing activities in 2017. About 44% of the total absorption was recorded in Sector 62-65 micromarket followed by 26% for NOIDA Expressway and the rest in the smaller micromarkets such as Sector 16A and 18. As per Colliers Research, about 2.1 million sq ft (0.1 million sq m) was leased in 2017, excluding pre-commitments and renewals, representing a 22% decline YoY.

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