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.
