The recent report of the International Real Estate Research Group, Colliers International shows that Noida is more affordable than Guragon, still have less takers for office spaces. As per the report, the office space market in Noida till the second quarter of 2015 witnessed only 0.5 million sq. ft. of office space absorption.
The primary demand drivers are expansion and relocation because of the companies like Big Basket, We Technologies and Cognizant. The reasons behind the less takers is the lack of support infrastructure in this city for businesses.
Gurgaon, on the other hand, in the second quarter of 2015 has absorbed approximately 1.8 million sq. ft. of office space., which is also approximately 60% more than the previous quarter. Reasons could be,
• No demand for office spaces in Noida and the future trend seems to be the same, at least in the next few quarters
• No new project has been launched, despite the completetion of big projects like Elixr Tower by Cosmic Group in Sector 127 and the NPX Tower by Urbatech in Sector 153
• Unavailability of an international airport, power accessibility and order situations
Deepak Kapoor, President of Credai (Western UP), mentioned that the purchase price and rent have gone down in recent times in Noida and Greater Noida because of the oversupply of office spaces. Also, Noida doesn’t have an airport nearby, which acts as a disadvantage for the city. However, it’s expected that the good connectivity and lower rent than Delhi and Gurgaon can help recover value for the office space market in Noida in future.
Vipin Malhan, president of the Noida Entrepreneurs Association, said…
“Business is about saving time, and increasing productivity. With the airport so far away, Noida has been suffering a distinctive disadvantage. There are traffic jams, distances are huge. Why would anyone come here? People do not mind paying extra rent and leasing out in Gurgaon because it works for the IT ad ITeS companies. The future of IT driven business looks bleak in Noida until major infrastructure development takes place here, like the Jewar airport.”
The biggest portion of the corporate office space demand in NCR is taken by Gurgaon basis its location and close proximity to the airport. According to Amit Modi, Director, ABA Corp and vice-president of Credai (Western UP), said,
“Noida, with its affordability advantage may see a renewed interest from mid-size players from IT/ITeS sector, which also happens to be the largest occupier of office space in the NCR, followed by the e-commerce segment and manufacturing sector.”
There are other factors that could make a difference in the demand:
• Six-lane elevated flyover signal-free drive from Sector 41 to SEZ Phase II
• Noida Authority plan for a six-lane elevated flyover signal-free drive from Sector 41 to SEZ Phase II, which will be ready by 2017