Leasing activity in the Delhi NCR office market picked up pace in Q4 2013: CBRE

Track2Realty: Prime office space absorption in the Delhi National Capital Region (NCR) grew by approximately 14% q-o-q—registering around 1.7 million sq. ft. in the fourth quarter of 2013, as compared to around 1.5 million sq. ft. in the previous quarter—according to the findings of CBRE’s latest report, India Office Market View Q4 2013.

Commenting on the findings of the report, Anshuman Magazine, Chairman and Managing Director, CBRE South Asia, “Transaction activity in the NCR was mostly led by the peripheral micro-market of Gurgaon, which saw about 1.3 million sq. ft. of office space getting leased during Q4 2013. Most of this space was leased by the IT/ITeS segment, while the rest was taken up by the commercial segment. Noida observed a decline in demand for Grade A office space, with absorption recorded at around 0.2 million sq. ft. during the fourth quarter. Leasing activity was mostly concentrated along the Noida Expressway area, accounting for more than 65% of the leasing activity in Noida during Q4 2013.”

Office space supply addition in Q4 2013 stood at nearly 1 million sq. ft., taking the NCR’s total supply for the year ended December 2013 up to about 3.5 million sq. ft. This fresh office space addition in the fourth quarter grew by nearly 200% over the last quarter’s supply addition of just about 300,000 sq. ft. The commercial segment gained traction in Gurgaon, with close to 0.25 million sq. ft. of fresh supply addition on Golf Course Road; while no fresh supply addition was seen in Noida during the same period.

Rental values remained largely stable across most micro-markets of Delhi in Q4 2013, over the previous quarter. Some rental appreciation was witnessed in Gurgaon’s DLF Cyber City, due to sustained demand. Rental values reduced slightly on Golf Course Road, however, primarily because of fresh supply addition in the micro-market during the quarter under review. On account of subdued demand levels, rental values remained under pressure in Noida.

CBRE’s India Office Market View is a quarterly report, which provides a summary of office space movement across key cities in India. It includes average rental rates for the present quarter as well as an outlook for the next. The India Office Market View report also covers key Grade A office space transactions across the Delhi NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata.

4 2013 stood at nearly 1 million sq. ft., taking the NCR’s total supply for the year ended December 2013 up to about 3.5 million sq. ft. This fresh office space addition in the fourth quarter grew by nearly 200% over the last quarter’s supply addition of just about 300,000 sq. ft. The commercial segment gained traction in Gurgaon, with close to 0.25 million sq. ft. of fresh supply addition on Golf Course Road; while no fresh supply addition was seen in Noida during the same period.

Rental values remained largely stable across most micro-markets of Delhi in Q4 2013, over the previous quarter. Some rental appreciation was witnessed in Gurgaon’s DLF Cyber City, due to sustained demand. Rental values reduced slightly on Golf Course Road, however, primarily because of fresh supply addition in the micro-market during the quarter under review. On account of subdued demand levels, rental values remained under pressure in Noida.

CBRE’s India Office Market View is a quarterly report, which provides a summary of office space movement across key cities in India. It includes average rental rates for the present quarter as well as an outlook for the next. The India Office Market View report also covers key Grade A office space transactions across the Delhi NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata.