Office Leasing in Noida Overtakes Gurugram, Says Savills report

Office leasing in Noida micro-market has taken over Gurugram because of the lower rents, quality supply and robust infrastructure including Metro connectivity and prominent location for office occupiers, said a report by international property consultants, Savills India.

The report, ‘India Market Watch Office – H1 2020’, further highlighted that 2019 was exemplary for NCR; absorption stood at 10.9 mn. sq. ft. However, H1 2020 leasing activity stood at 1.8 mn sq. ft., an annual decline of over 70 per cent due to the pandemic and consequential lockdowns that acted as a dampener to the strong momentum in the first half of 2020.

On the supply front, in H1 2020, only 0.3 mn sq. ft. of additional supply came up in NCR making the total stock stand at around 118 mn sq.ft.

The following are the key findings of the report:

• Office leasing in NCR stood at 1.8 mn sq. ft. in the
•  H1 2020, recording a Y-o-Y decline of 70 Only 0.3 mn sq.ft. of fresh office space supply was witnessed in H1 2020
• The minimal supply addition was spread across micro-markets like Golf Course Road Extension, NH8 in Gurugram and Noida Expressway.
• Golf Course Road Extension saw a growth and interest in last few years and will see some new completion in upcoming quarters.
• Vacancy levels in NCR have gone up to 20 pc due to a few exits in key micro markets both in Gurugram and Noida
• Despite the pandemic, resultant low leasing activity and termination of few rental agreements, rentals in H2 2020, hav
  e remained stable compared to H1 2019

Shweta Sawhney, MD, NCR, Savills India, said “The pandemic has slowed down the growth momentum of the Indian commercial office market. With mounting pressure on companies to cut costs and increase adoption for work from home, new office space commitment may see some impact in the short term. However, we believe office leasing will start recovering in the early part of 2021.”