Noida Commercial Real Estate: An Opportunity for Investors

The recent reports released by JLL India and Knight Frank indicate that commercial real estate has grown in India in the year 2016 at a very steady rate. The report also shows an upward growth in PE investments in the real estate sector. Overall, the commercial real estate is out of the dark and promises a bright future ahead.

There have been many ingredients to this growth recipe. Steady lease rentals, high absorption levels, inadequate supply and global investor interest are some of them. However, one phenomenon which has scripted this turnaround of commercial real estate in last 2-3 years is the inclusion of global standards as a practice by Indian developers. With improved economy and political stability post the year 2013, investors around the world turned towards India. The growth story of logistics and e-commerce along with IT and ITes further filliped the demand. The result was an excessive demand for commercial spaces with global standards. Unlike the fragmented residential market, a few leading developers grabbed this opportunity and focused are building Grade-A office space in key cities. As per JLL India, around 38.4 million sq. ft of Grade A space is expected to be built in 2016, of which around 33 million sq. ft is likely to be taken up on the lease.

The multinational companies who are present in India as well as those who have recently entered to Indian markets prefer Grade-A properties; Noida is slowly gaining the limelight when such Grade-A commercial properties are concerned. Talking about the largest office leasing deals concluded In India in last few quarters, three out of ten happened in Noida. Tata Consultancy Services leased around 400,000 sq. ft. of office space in Okaya Tower at Sector 62, Noida. Vivo Mobile, the Chinese multinational technology company, leased around 250,000 sq. ft. of office space in World Trade Center at Greater Noida. Oppo Electronics Corporation leased around 160,000 sq. ft. of office space in ASF Synergy at Sector 63, Noida.

Noida enjoys a strategic location and acts as connect for Delhi with its immediate southeast markets. Cities like Agra, Mathura, Aligarh, Meerut, Jhansi, Kanpur, Lucknow etc. are connected with Delhi and Punjab through Noida. With Yamuna Expressway being operational, Noida has further strengthened its position as the commercial hub of Delhi NCR.

There is an increasing demand in the commercial real estate segment. With improved transparency, implementation of RERA, proposed GST, and many other global developments, the demand is expected to grow further. On the contrary, the supply to match this increasing demand is inadequate. It is, therefore, a perfect time to invest in commercial real estate. The segment has started rising; this growth is there to continue for many years.