Delhi Commercial Real Estate Market Dynamics
Gurgaon and Noida are key office locations in the Delhi NCR (National Capital Region) and are well differentiated real estate markets. Noida has considerably lesser stock, higher vacancy and lower rents as compared to those in Gurgaon. However, signs of convergence between the two markets are emerging.
Existing stock in Gurgaon is 33 million square feet, which is more than double that of Noida’s 13 million square feet. A relatively large development pipeline in Noida is set to increase its market size to more than 60% of Gurgaon in the next three years. This will help to bridge the gap between the two markets and provide strong impetus to developers and occupiers in Noida.
Alongside the relatively fast pace of growth in total stock, during the past four years, Noida has seen average annual absorption of 1.8 million square feet compared to 4 million square feet in Gurgaon. This trend shall keep vacancy levels in Noida under control.
Special Economic Zones (SEZs) are likely to be well distributed in both markets.
Gurgaon has established itself as a leading Information Technology Enabled Services (ITES) destination and Noida as an Information Technology (IT) destination. Lower rental rates and better infrastructure in Noida are likely to increase the convergence between these two locations going forward.
Based on a rent-revenue analysis of a typical IT/ITES firm, occupiers based in Noida will enjoy 10-12% higher profit margins than those in Gurgaon due to lower rent, power and related costs.
About the author
Scope of Service Experience Prashant comes to NAI with 10 years of commercial real estate experience. In his role at NAI he is responsible for membership and cross border/regional business development growth in India. Education Somaiya Institute of Management Studies and Research (SIMSR) Specialization : Finance B. N. Bandodkar College of Science - Bachelor of Science in Physics St. John The Baptist Junior College of Science & Commerce Background & Experience Prior to joining NAI, Prashant has worked for Inorbit Malls where he planned and executed the leasing strategy for over 3.5 million square feet of real estate assets across India. He also helped to forge strategic alliances with retailers. Prashant has also worked for Debemham Tie Leung (DTZ) International Property Advisers, A Staubach Company where he advised multinational and Indian companies on their Indian real estate development/disposal strategies. Prior to that, Prashant worked for Colliers building land resources for Colliers in Western India. He was involved in local business development, forging long-term relationships with clients and tenant/landlord representation. Professional Affiliations & Designations Recommended by N.C.C (Naval) Mah. Bat. to join the Combined Defense Services, Direct Entry Commissioned Officer through the Services Selection Board – Bhopal, in 1993. Significant Transactions • Signed 150 leases in 12 months, excluding Anchor Transactions across Vashi & Cyberabad projects • Completed over 100 nos of final agreements executions and registrations for Vashi - Navi Mumbai project • Leased approx 80% of the total GLA (0.75 mn sft) for Cyberabad Project in 12 months • Select first time International / National & Local brands signed @ Inorbit : McDonalds, Ives Rocher, Air & Co, Falafel, Bhagat Tarachand, Waterfront, 10 Ds, Chutneys, Lacoste, Estee Lauder, Clinique, Only Shirts, Jumbo Electronics, Westside, Axiom etc. • Valuation & Feasibility study of a 60 acre IT SEZ project in Pune and a 72 acre Multi-product SEZ in Chennai for a Foreign Real Estate Fund. • Buy Side Representation for Two SEZ projects – Pune & Chennai respectively • Industrial Location advisory conducted across North India, Western region & South India for Terex Corporation • Acquisition of 100 acre Industrial Land for a Heavy Engineering Multinational to set up its first manufacturing plant in India. • Sell Side Representation – Private Equity Funding for a Large Indian Developer for his projects across Western India. ( Ongoing, approx. deal size USD 24 Mn ) • Won Exclusive agency mandate of Hindustan Lever, and sold their industrial land admeasuring 120,000 sq.ft in Mumbai in record time for an optimal price • Successfully acquired a 10 acre Industrial site from Govt. Of Maharshtra in Mumbai for OMYA Asia Pacific (World Leader in Calcium Carbonate manufacturing) to set up their first plant in India. • Won exclusive mandate and sold excess Land asset for Asian Paints India Ltd. in Mumbai for highest price • Sold 06 acres Land owned by Marico Industries through Tender bidding process. • Concluded large size office leasing transactions for ABN Amro Bank and Ocwen Financial Corpn. in Mumbai. • Single point of contact for DHL Danzas and Menlo Worldwide as Key Account Manger. Assisting both in • Relocation analysis and site acquisitions to set up new facilities in Mumbai and Pune.
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