Noida pips Gurugram in Office Space uptake in Delhi-NCR

Noida has been consistently topping the charts as Delhi NCR’s best performing market in terms of net office space absorption for four consecutive quarters. However, it still has a lot to cover compared to competitor Gurgaon, which accounts for a major share of offices

BY Realty Plus
Published - Tuesday, 08 Jun, 2021

Noida pips Gurugram in Office Space uptake in Delhi-NCR

Noida has been consistently topping the charts as Delhi NCR’s best performing market in terms of net office space absorption for four consecutive quarters. However, it still has a lot to cover compared to competitor Gurgaon, which accounts for a major share of offices occupied by large MNCs and KPOs, among others. During the January-March 2021 quarter, Delhi NCR witnessed a net absorption of 1.07 million sq ft (MSF), a 5% growth Q-o-Q, JLL India said, adding that Noida contributed 55% of the net absorption followed by Gurgaon at 38%. Noida has been consistently outpacing Gurgaon since April-June 2020. Noida is attracting corporates as it boasts of better road and metro connectivity, affordable housing, abundant power, Grade-A offices, competitive rentals and upcoming international airport and logistics hub. But, analysts point out that it has a lot to do to catch up with Gurgaon in terms of large clients. For instance, a large Indian digital payment company took 5.50 lakh sq ft last year to consolidate six-seven offices spread in Noida into one at Skymark Towers. Another is a South Korean multinational conglomerate consolidating in Sector 62. They took around 3 lakh sq ft. A large private sector bank, too, last year consolidated its offices from Delhi and other places to Noida taking up around 60,000 sq ft at Max Towers, he added. Delhi has smaller offices, which are usually front offices, anywhere between 20,000 and 30,000 sq ft. It makes a lot of sense for enterprises to move into either Gurgaon or Noida. Traditionally, Gurugram was a preferred choice being closer to the Delhi border. Now Noida is favoured as it has Grade-A+ buildings with half the cost from Delhi. Cost arbitrage and same facilities at cheaper rates is a very good combination, but what Noida lacks compared to Gurugram is large corporate clients. Gurugram has much larger spaces for back offices, KPOs and software development centre. To move 1-2.50 sq ft, it takes a lot of diligence on talent movement, cost amortisations and many other critical factors. Overall, the NCR market expected to report a healthy commercial office space take-up and strong demand from IT-ITeS, BFSI and law firms is likely to further fuel the momentum, he noted. On the road ahead, Aggarwal said companies are thinking over two aspects. First, if they downsize, then how much, and second, when will they come back to office.