CBRE South Asia has announced the findings of its latestIndia Office MarketView Report – Q3, 2017. While Gurgaon dominated leasingactivity during the review period, Noida recorded a quarterly increase inabsorption. Sustained occupier interest resulted in the micro-markets of NH8,Main Noida and DLF Cybercity driving more than half of the regions leasingactivity. Most of the absorption was in non-IT spaces in developments on NH-8in Gurgaon, Aerocity in Secondary Business District and Main Noida.
On the supply side, quarterly supply addition increased butwas limited to Gurgaon. Most of the new supply entering the market was thanksto the receipt of long pending completion certificates which resulted indevelopment completions across several projects. IT/ITeS corporates dominatedleasing activity, followed by engineering and manufacturing firms. Leasingactivity continued to be driven by small to medium-sized transactions, however,the quarter also witnessed a large-sized deal (greater than 100,000 sq ft) withthe culmination of pre-commitment in a prime development on NH-8.
DLF Cybercity (SEZ) witnessed a rental growth of about 3-4per cent QoQ. Rising vacancy levels in select developments resulted in amarginal rental dip of about 2-4 per cent QoQ in the Secondary BusinessDistrict of Nehru Place and Jasola in Delhi.
Commenting on the findings of the report, Anshuman Magazine, Chairman-India &South-East Asia, CBRE, says, “India’s prime office market is evolving at arapid pace. Occupier strategies continue to focus on consolidation andexpansion as well as cost and greater flexibility of office space. The adventof co-working and shared office space formats is also influencing the market tosome extent. While demand for traditional office space will continue todominate the segment, it will have to make allowance for newer formats that areslowly gaining prominence and absorbing a part of the overall pie.”
Ram Chandnani,Managing Director-Advisory & Transaction Services, CBRE South Asia, adds,“Despite availability of quality, ready to move in office space remainingconstrained, overall office leasing continued to be high during the quarter.The sustained interest from EMEA and US corporates highlights India’s continuedpreference as a destination for office space. Going forward, as occupierscontinue to future proof their portfolios and hedge against future rentalescalations, we can expect to witness a rise in pre-leasing of space acrossvarious cities. This shift in occupier strategy, focus on cost, and the growingprominence of alternative options like co-working spaces, could impact thedemand for office space in the short-term.”
Delhi MarketIndicators – Q3 2017
Small and medium-sized transactions were noted with stability in rental growth
Leasing activity remained broadly steady, occupier focus continued to be on core micro-markets
Leasing activity reported in recently completed developments in Main Noida