Demand for Grade A office spaces and compact office spaces increasing
For four consecutive quarters, Noida has topped the rankings as the best performing market in the Delhi NCR in terms of net office space absorption. According to JLL India, the Delhi NCR saw net absorption of 1.07 million sq ft (MSF) in the January-March 2021 quarter, up 5% from the previous quarter, with Noida accounting for 55% of the net absorption and Gurgaon for 38%. Since April-June 2020, Noida has consistently outperformed Gurgaon.
Commercial and office space has become increasingly important as the population of Noida's newer neighbourhoods has expanded. Following residential acceptance, demand for office space has surged, as office spaces in East Delhi are practically filled and do not fulfil modern aspirations for ultra-tech and posh workplaces.
Last year, a prominent Indian digital payment company took 5.50 lakh sq ft at Skymark Towers to consolidate six offices in Noida into one. Another company consolidating in Sector 62 is a South Korean global corporation. They took almost 3 lakh square feet.
“The commercial real estate market is at standstill in general, with demand for Grade A office space stable. The office leasing segment of the commercial real estate market's demand indicators have also remained stable. As a result of the second wave across the country, companies have continued to focus on employee well-being; the increased sense of obligation has led offices that previously worked from cramped spaces in city centres to seek out compact offices in plush locations and buildings in NCR,” says Deepak Kapoor, Director, Gulshan Group.
Because of its enhanced road and metro connectivity, affordable housing, Grade-A offices, low-cost rentals, and potential international airport and logistics hub, Noida is attracting enterprises. Following COVID, several businesses decided to split the number of staff in one office among several locations, allowing them to increase their reach.
Giving more insight, says Sagar Saxena, Project Head, Spectrum Metro, says, “The amount of lease retention in already-operational properties has mainly followed previous trends. Some corporate office occupiers, on the other hand, are decreasing their space requirements, creating a demand for tiny workplaces. Due to a steady pipeline of assets becoming online in the near future, the demand-supply imbalance could momentarily widen.”
The combination of cost arbitrage and lower pricing for the same services is a winning combination. Noida is also evolving every day, with defined business and residential districts providing people with a sense of orderly development. With Metro connections, the issue of transportation has also been addressed. “Developers established commercial hubs with specialised office spaces in response to demand as an alternative for people who worked from home or in a shopping mall. Starting at 300 square feet, office space is affordable for start-ups and entrepreneurs on a tight budget,” says Harvinder Singh Sikka, MD, Sikka Group.