GURUGRAM, India, July 15, 2019 /PRNewswire/ — In the first half of 2018, gross leasing activity in Delhi-NCR was recorded at 4.4 million sq ft, which is 28.1% lower than H1 2018. In addition, during H1 2019, NCR witnessed pre-commitments totaling 1.4 million sq ft across Gurugram and NOIDA, signifying robust occupier confidence in the market. Across NCR, demand was driven by Information Technology-Business Process Management (IT-BPM) occupiers, which accounted for 20.0% of total gross leasing in H1 2019, followed by flexible workspace operators which accounted for about 17.0% of total leasing.
“Despite decline in gross office leasing activity in the first half of the year, we expect the leasing momentum to gather pace with 10.0+ million sq ft of gross absorption expected by end of this year. Interestingly, the market has seen 15% increase in large ticket size transactions of 100,000 sq ft and above compared to H1 2018, driven by notable transactions in the NOIDA market. The increased occupier confidence in the market is also signalled by a total of 1.4 million sq ft of pre-commitments across Gurugram and NOIDA during H1 2019,” said Vineet Anand, Sr. Director, Office Services (NCR) at Colliers International India.
In H1 2019, Delhi’s office market recorded gross absorption of 224,300 sq ft, representing a 33.0% decline compared to H1 2018 owing to limited availability in quality developments and no new supply. The leasing activity was led by flexible workspace operators with an 18% share in gross leasing during H1 2019, closely followed by Banking, Financial Services, Insurance (BFSI) and automobile occupiers with 17% and 15% share, respectively.
It is projected that the cumulative new supply of 4.4 million sq ft during 2019-2023 to increase the city-wide vacancy rate from the current levels of 8.9%.
Gurugram witnessed gross absorption of 2.2 million sq ft in H1 2019, a decline of 41.0% over H1 2018. Golf Course Extension Road (GCER) saw the highest leasing activity in Gurugram in H1 2019, with a 40% share, followed by Udyog Vihar and Cyber City constituting 22.0% and 9.0% of overall leasing activity in Gurugram, respectively.
Gurugram witnessed 600,000 sq ft of new supply, 50% higher than H1 2018. As per Colliers Research, it has been forecasted that a supply pipeline of 29.4 million sq ft in Gurugram during 2019-2023 should increase the city-wide Grade A office stock by 42.0%.
In H1 2019, NOIDA’s office market witnessed heightened leasing activity at 1.9 million sq ft, registering a notable increase of 37.0% compared to H1 2018. The IT-BPM sector continues to be the largest demand driver with 29% of overall absorption in NOIDA. This was followed by flexible workspace operators with a share of 21%, and the BFSI sector with a 15% share of the overall leasing in NOIDA in H1 2019.
New completions of 1.3 million sq ft increased the city-wide stock by 4.0% from 2018 levels. The new supply more than doubled compared to H1 2018. Further, a planned supply of 26.2 million sq ft is expected to be completed as scheduled by the end of 2023 to meet the rising interest of occupiers.
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About Colliers International Group Inc.
Colliers International (NASDAQ: CIGI) (TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning more than 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management.
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