Office space demand in India ii

  

 

Noida has absorbed nearly 1.4 million sq ft of office space this year itself. It has traditionally housed larger occupier-owned operations of 100,000 sq ft plus. Most firms have taken up space in Grade B industrial buildings. Some IT / ITES companies have preferred to go to institutional sectors in Noida, usually constructing their own buildings. There is now an increasing trend of Grade – A commercial office space buildings being developed in Noida.

 

Notable transactions this year in Noida included Hewitt Associates leasing 175,000 sq ft., Momentum Technologies 100,000 sq ft, Fiserv 100,000 sq ft, and HCL Technologies 271,000 sq

ft.

Freescale

has purchased buildings measuring 205,945 sq. ft.

 

Many factors are responsible for this increasing commercial office space demand in the NCR which has edged out most Indian cities in the demand for commercial property due to its improved connectivity, better infrastructure and availability of skilled human resource. Because of the Commonwealth Games, transportation, hotel accommodation, security and all other supporting infrastructure are getting a boost. The market for information technology is the highest in the city of

Delhi

and all these factors have positively influenced the demand of office space in

Delhi

.

 

The MCD demolition drive of commercial properties in residential areas had also added marginally to the continuously increasing demand for commercial office space. Lack of adequate supply in the CBD and SBD have resulted in a shortfall, which might witness increased pressure on current stock in the short- medium term.

 

The office space market is dominated by the IT/ITES sector that accounts for approximately 80% of the total commercial space absorption in India. As the IT/ITES sector is expected to grow by 30-35% in the next 3-5 years, the same can be used as a basic benchmark for estimating the growth of commercial office space real estate sector. With a conservative average of 75 sq ft of office space per employee, if the IT/ITES industry adds another 1.5 m million staff till 2010 (based on most consensus estimates), there will be at least a 110+ million sq ft of IT/ITES category office space being added in the next four years. Apart from IT, there are other office demand drivers and it is believed that the A Grade office space demand from the top six Indian property markets, i.e.

Bangalore

,

Hyderabad

, Chennai, Mumbai-Pune, NCR and Kolkata, would be in excess of 150 million sq ft between 2006 and 2010.