Noida, an Upcoming Commercial Hub of NCR

Noida has been witnessing the growth in the commercial sector over the last few years. The real estate sector of Noida is flooded with the upcoming properties, both residential and commercial. The number of people looking to invest in the National Capital Region, especially Noida is increasing by the day, city’s commercial real estate sector has witnessed an incredible growth in past few years. 

            

In recent times, the city has emerged as one of the most preferred destination for property investors in India due to its proximity to New Delhi. The city has witnessed large scale of commercial real estate developments. One of the reasons of such growth is the availability of big commercial plots in Noida at affordable price. Most of the big corporate houses are looking for 5 star facilities within their office and as a result developers are launching their commercial projects with all five star facilities, which are in much demand from national and international corporate houses.       

   

Noida’s Sectors 61, 62 & 50 are most preferred places to buy and rent property. All three of these sectors are located centrally within Noida and Delhi just 30-45 minutes away, and considering the kind of infrastructure these sectors offer, it is a complete package for an end-user.

According to industry reports, the commercial real estate in Noida has been performing well for the last few years, and hence, Noida alone occupies 36% or 2, 51,770 sqm of the office space. In Noida, the technology sector, with 60% share, remained the key driving force in office rentals space. Tech companies are continuing to fuel the commercial market growth and the city has emerged as the preferred IT and industrial centre.  

Noida continues to show positive sentiment, despite industry’s uncertainties. Many MNCs have marked their presence here across different domains like KPO, BPO, insurance, pharmaceuticals, automobile, manufacturing and FMCG. The city is an important transport and logistics node on the North-West corridor, and also an essential IT/ITeS destination in NCR second only to Gurgaon.

As a speedily developing satellite town, Noida’s good connectivity and full-bodied infrastructure riveted investors and occupiers to set up base in this market. The 24 km, six- lane expressway, connecting Noida to greater Noida, is slowly emerging as a new commercial corridor in NCR, whereas Delhi-Noida- Direct (DND) Flyway has added enormous value to the city’s commercial advancement.

Here is the quick list of factors proving Noida to be an upcoming commercial hub of NCR

• The city also supports robust social infrastructure, opening several fun and entertainment avenues to the vicinities
•  Excellent infrastructure, power supply, metro connectivity, Yamuna Expressway and improved roads coupled with skilled manpower has helped Noida to regain the market
•  With the launch of Yamuna Expressway and approvals of Metro to Greater Noida, the value of the area has also increased many folds. The value of both commercial and residential property has increased by 12-15 percent
• Companies such as SafeNet, IGATE, Genpact, Jubilant FoodWorks Ltd, NEC, Dell and Newgen are some of the major occupiers, with transactions ranging between 60,000–90,000 sq ft.
• Big MNCs and blue chip companies have also shifted their base location to Noida and Greater Noida, with transactions ranging between 60,000–90,000 sq ft.
• The affordable property rates ranging between Rs. 45–70 per sq ft offers this city an added advantage over similar locations in NCR.
• Greater Noida is emerging as a realty hotspot for commercial and residential properties.
• As the city is close to central Delhi and Noida, it provides a good residential solution to working people.
•  Besides, as a number of corporate houses have drawn out plans to start offices here, it will provide good employment opportunities to residents.
• A number of category organised players are entering into the commercial segment in Noida and Greater Noida.
• Good connectivity, a ready residential catchment and large land parcels are acting as enablers for the office market along the Noida–Greater Noida Expressway
•  The Noida authority has reserved approximately 3 lakh sq m of land for development along the expressway and has made allotments to 15 companies, including IT major Infosys, to set up campuses on one lakh sq m of land.
• The recent luxury launches are the indication that feasibility and viability of high-end commercial projects is now gaining traction in Noida
• There are more than 40 educational institutions, Planned Export Promotion Groups, Taj Economic Zone with Yamuna Express Ways which is further influencing the commercial market value in this area.

Undoubtedly, Noida has arisen as the commercial hub for people and investors who are looking to make fast bucks. There are so many projects in the pipeline which will have all the premium facilities and is targeting high net worth individuals and big corporate houses. Good connectivity along with plethora of other factors will definitely augment commercialization in the city. With government’s continuous effort to boost real estate and infrastructure in the city will definitely drive growth and deliver maximum to the citizens.

Noida: The city of Joy

India being the largest urbanized nation in the world is under the constant pressure of two forces- rapid rate of population growth and increasingly rapid rate of migration. Urban areas here have been recognized as ‘’engines of inclusive economic growth’’. Being economically and infrastructurally advanced, Noida has very closely observed the paradigm shift in the realty growth.

The smoothness of the landscape and the infrastructure govern the development of any city. The evolution of any city is defined either by its design (infrastructure) or by its residents (the first movers). Hence, they are the ones who give a definite outlook & shape in terms of urban planning and overall outlook of the given city. This has been the pattern of urbanisation and rise and growth of the cities across the world with India (especially Noida) being no exception.

In 1970, Noida, the New Okhla Industrial Development Authority, was set up as an industrial town to encourage small industries and as an outreach to Delhi’s lack of space for industrial areas. The reason behind this establishment is also to create a wider gamut to support the unceasing space requirements in Delhi, which had emanated due to increase in inwards migration and spiralling development levels. 

Noida, as a matter of fact, has witnessed a tectonic shift of realty during the last two decades led by the market forces. The city has also shaped up as one of those rare markets where the demand supply gap is much lesser than many other markets across the country. Great infrastructure, good road network and metro connectivity to all key destinations are the prime reasons that have enticed the buyers and investors to this area.

Noida has grown stupendously beyond an industrial extension to full-fledged modern city in past three decades. Today, it is one of the most trusted investment destinations in the country. The city boasts of an impressive development plan that includes access to international-level-retail facilities. It has ascended as an ideal land of opportunities for both business as well as investment. The number of people looking to invest in the National Capital Region, especially Noida is increasing by the day, city’s commercial real estate sector has witnessed an incredible growth in past few years.                      

Being a leading business and residential hub, Noida’s prime location has always attracted buyers and investors. The city has also emerged as a popular destination for corporate offices which used to flock to Gurgaon earlier. Big MNCs and blue chip companies such as Genpact, Goodyear, Reckitt Benckiser, HCL, Honda, Wipro, Escorts, Pepsi etc. have profoundly influenced the real estate value of the city. The city is also attracting large interest from young professionals from IT/ITeS sector, especially BPOs. From residential projects to integrated townships, commercial projects to swanky malls and mixed-use developments, Noida is throbbing with activity.

According to industry experts, to establish Noida as the hottest property hub, the industrial and commercial policies by GNIDA has helped in infrastructural advancement in the region and commercial actions have taken off in right earnest.

The emergence of Noida as a city with global standards had been a roller coaster ride. Noida, due to its proximity to Delhi, has developed into a land of myriad opportunities and demand for properties in Noida is soaring high. The city being accountable to increasingly well-informed consumers and investors, meeting their growing needs and professionally managing multiple projects, has shifted the commercial real estate game in its favour. With high end infrastructure and premium facilities, the city has become a rapid-developing real estate destination in comparison with other areas in Delhi/NCR. 

With massive infrastructure work in the pipeline, Noida will be in the limelight for progressive growth of residential and commercial hubs in near future and will continue to grow on the fast forward lane of prosperity.

Indian Commercial Real Estate Sailing high on RERA, GST and REITs

The year 2016, would be recognized as the year of many key decisions like GST (Goods and Services Tax), RERA (Real Estate Regulatory Authority), Smart City Projects, demonetization etc. and many more lying in the pipeline. Being one of the major contributors into the Gross Domestic Product (GDP) and connected to more than 25 allied industries, year 2016 had opened new windows for commercial real estate sector. Going forward in 2017 commercial realty market expects authorization of key policies and reforms that largely favors the segment.

Government’s current efforts to bring transparency in the sector have been implemented for improving the ease of doing business in this sector, as well as to boost investors’ confidence. Once implemented in the right spirit, these measures are likely to fascinate more institutional investments and FDI into the Indian commercial realty market.

Let’s look on to some of the reforms and see how they have benefited the Indian Commercial Real Estate Market:

Real Estate (Regulation and Development) Act or RERA: This act was passed in March 2016, covers both residential and commercial realty segments. RERA has the potential to bring in greater transparency, improve the bargaining power of the consumer (vis-à-vis the companies) and be a key enabler of genuine demand over the longer term. This indeed is a huge step towards solidifying the commercial real estate business in India.

According to industry experts, the Real Estate Regulation Act has boosted the sentiments in the commercial segment as the sector is expected to become much more transparent and organised which in turn will benefit all stakeholders.

Goods and Services Tax (GST): The amendment of this landmark Good and Services Tax (GST) has been India’s biggest structural reform in decades. It is expected that under the GST regime, there would be a smooth flow of credit and current restriction on construction related credits not being available for offset is likely to be removed.  This would help to reduce the project costs in the hands of the developer, and have a positive effect on rentals.

According to the industry experts, this landmark bill would reduce harassment which is there due to multiple taxes today.

Moreover, the GST regime is expected to impart greater transparency through market mechanism, it is imperative that real estate transactions forms an integral part of the proposed GST design. 

Real Estate Investment Trusts (REITs): The introduction of REITs is yet another game changing policy initiative by the Government.

According to industry experts, with huge potential in Indian commercial market REITs will facilitate investments into the country. Currently, around 229 million sq. ft of office space is REIT-compliant. Even if 50% of this space were to get listed in the next few years, experts are looking at a total REIT listing worth $18.5 billion. As India is witnessing a growth in its commercial assets, there will be more opportunities for REITs in upcoming years.

With a compelling need for additional funding mechanisms, the effort to allow REITs is yet another step towards the organised development of the sector.

The passage of GST and RERA have been one of the biggest highlights of the year that is sure to benefit the commercial sector in the long run. The commercial real estate sector has been continuously endeavouring to improve their stretched capital structure and with Govt initiatives industry has high hopes to retain its position as a bright spot in the global economy, with better growth prospects expected to support office space leasing in 2017.

Additionally, the policy announcements and reforms to recuperate the commercial real estate space, including the relaxation of Foreign Direct Investment (FDI) norms, introduction of 100 smart cities, direct and indirect tax benefits for affordable housing projects, the implementation of RERA, GST and Real Estate Investment Trusts (REITs) have helped in generating a positive outlook in the commercial segment. These reforms and policies are further expected to work towards enabling ease of doing business in the country, while supporting corporate entities entering or expanding their footprint across leading cities in India. 

Evolving Landscape of Noida Commercial Market

Indian real estate market has emerged strongly from the recent global downturn, and commercial construction have seen breaking numbers in the recent past. India is gaining eyeballs globally, which is a positive step towards the development of the country.

Riding on the momentum, Noida has become the hot-spot for commercial and residential properties with planned infrastructural advancement. With enriched infrastructure, world-class residential, commercial and educational facilities the city has not only engrossed maximum home-buyers but also big corporate, start-ups and PSUs. With high end infrastructure and premium facilities, the city has become a rapid-developing real estate destination in comparison with other areas in Delhi NCR.
To establish Noida as the hottest property hub, the industrial and commercial policies by GNIDA has helped in infrastructural advancement in the region and commercial actions have taken off in right earnest.

Recently, it has been observed that major conglomerates are shifting their offices in Noida and suburb. Companies like Wipro, Yamaha, HCL, and Vivo Mobile are happily doing their business from Noida. Vivo mobiles, which recently entered India market, has taken on lease large space in WTC Noida.

According to the industry experts following are the reasons towards this shift:
• Buying property in Noida and its suburb has become comparatively easier over the past few years.
• Following central government’s Smart City initiative, innumerable developers have entered the market and providing premium projects with large floor plates
• The authority too, has stepped in to complement developers’ efforts in a big way by allotting several institutional and commercial plots to increase commercial space in the city.
• Golf-course, engineering universities, b-schools, world-class hospitals, hotels, shopping malls and recreational parks have given the city an upmarket clientele.
• Noida’s connectivity to Delhi and Gurgaon, metro service and premium infra facilities enhance the commercial developments in the region.
• For more high-end developments, GNIDA is acquiring land from nearby villages like Itehda, Parthla Khanjarpur, Sabery and Haibatpur.

With the central government’s recent demonetization policy, there may be a dip in commercial property rates in the region. On the other hand, the move will definitely comb out the unorganized players from the market. An organised commercial market with established players like Godrej, Tata Housing, and WTC etc. reflects transparency and boosts investors’ confidence. With all these attractive changes and advancements, it would be really fascinating to witness the growth of realty sector and especially commercial development in Noida. 

Indian Commercial Real Estate: Back to Business

The commercial real estate market in India has picked up and is taking over residential segment by leaps and bound. Today it serves as a more lucrative investment option with investors gaining from rental income as well as capital appreciation. 

Commercial real estate witnessed a turnaround in 2015 after being sluggish for over three years. As per Cushman & Wakefield, the overall absorption is likely to gain momentum in the year 2017. The sector had pre-commitment levels across eight cities at 11.80 msf in 2015, most of which to be absorbed this year itself. It is this supply gap that is encouraging developers to launch new projects in the commercial real estate segment.  Groups like House of Hiranandani are looking to add commercial portfolio into their business. They are eying under construction projects to take over. 

As per the recent JLL report, major residential markets in the country saw average residential property prices in the city and suburbs appreciate by only 3.3% in 2015 as against an average of 7% in 2014. This sluggish growth has pushed investors towards commercial real estate. Moreover, they are keen on Grade-A properties as these properties yield more than average appreciation of around 12-15% annually. Also, Grade-A commercial properties give 8-10% rental returns on the capital value depending upon interest rates. 

Though there are many developers who are today developing Grade-A commercial properties, the segment was primarily pioneered by DLF. With an increasing appetite for such properties, Godrej and Tata entered the space. Talking about global brands, the first entrant in India into the Grade-A commercial properties segment was World Trade Center. The WTC or the World Trade Center started its first establishment in Mumbai and later granted another license to Brigade Group of Bengaluru to develop and manage a one million Sq Ft office tower. 

In the last couple of years, investors have become more inclined towards world-class commercial spaces. One of the reasons for this shift is a constant increase in rental incomes.  According to data from property consultancy CBRE Asia, rentals in NCR area rose 13% while those in Bengaluru's Whitefield and Electronic City rose 12%. Rentals in Hyderabad's IT corridor and areas such as HITEC City, Madhapur and Gachibowli rose by 14-20% in the last one year. Markets like Chandigarh and Noida have also shown significant growth. With WTC present at both these places, they have already registered their arrival into global commercial real estate market. In Noida, the first phase of WTC is completely leased out; second phase construction is also going on. 

Apart from an increased FDI flow into the segment, the market for commercial real estate properties has started attracting HNIs as well. In Bengaluru, Prestige Constructions sold 0.5 million sq ft of commercial space to HNIs who were looking to build annuity portfolio. The year 2017 promises better period for the commercial real estate market and why not, with festive season just started, the growth rate of commercial spaces is expected to rise.

Warehouses and Logistics: The New Elements of Indian Commercial Real Estate

With the boom in India’s e-commerce industry, warehousing is one of the sectors which got a fresh lease of life. The sector which was once used only to store goods, warehouses in India now provide value-added services like consolidation and breaking up of cargo, packaging, labeling, bar coding, reverse logistics, etc. The size of the Indian warehousing industry is estimated around INR560 billion. The industry is growing at over 10% annually. 

The growth in warehousing in India is primarily being driven by the growing manufacturing activities and an emergence of organized retail in the country. The increasing foreign investment in infrastructure sector and the improving ease of doing business are further propelling the growth. Above all, the surge in online retail and e-commerce enablement activities are the icing on the cake. Warehousing forms a crucial link in the overall logistics value chain of the e-commerce industry. It accounts for almost 5% of the Indian logistics market.

With the entry of global e-commerce giants, same-day and next-day deliveries have become the standard benchmarks. This has forced companies to establish their warehouses in almost every major city in India supported by comparatively smaller distribution centers in the Tier-II cities. The logistics for e-commerce companies primarily work on the hub-and-spoke model where the large warehouses are the hubs and the distribution centers work as the spokes for a wider coverage. 

The requirement of large warehouses in Tier-I and II cities has sparked a demand in the commercial real estate segment. Realizing the potential of warehouses and their estimated impact on the real estate industry, the government of India opened 100% FDI inflow in the e-commerce sector. As per an Assocham-PwC study, the e-commerce companies are expected to invest close to $6-8 billion in logistics, infrastructure and warehousing in India in the next few years. 

Given the surge in foreign investment in warehousing and logistics in India, cities with better connectivity have started witnessing various infrastructure development activities. Cities like Noida and Greater Noida have witnessed a surge in the launch of large commercial properties. These launches are primarily concentrated to Yamuna Expressway and Tech Zone IV regions, they being better connected with the surrounding regions.
As the government of India has also cleared the passage for GST, the logistics and warehousing sector is expected to get benefited the most. Overall, the recent developments related to FDI, ease of doing business and now the GST has made the commercial real estate sector more lucrative for the investors.

Noida or Gurgaon: Let the Better Urban Planning Win

Delhi NCR has always been one of the prime real estate markets in India. The location has its own advantages. Apart from being the hub of all political activities, it is a cluster of major cities which, together house offices of almost all the major companies operating in India. Though NCR is expanded to many miles, it is primarily five cities which comprise the majority of its operations. The cities are Delhi, Noida, Gurgaon, Faridabad and Ghaziabad.

Indeed, together these cities enjoy great strengths, but what about them when compared individually! Out of all these, Gurgaon and Noida are the two important cities which have done fairly well in last one-one and half decades. Though Gurgaon had location advantages since the beginning which helped it emerge as a preferred destination for MNCs, it has started losing its charm due to lack of basic amenities. Noida, on the other hand, has picked up momentum in last few years; many MNCs have shifted their corporate base to Noida and Greater Noida due to well structured urban planning.

Urban planning is one of the very important aspects that decide the course of development of a city. It involves a technical and political process concerned with the development and use of land, protection, and use of the environment, public welfare, and the design of the urban environment, including air, water, and the infrastructure passing into and out of urban areas such as transportation, communications, and distribution networks. Overall, it is the process to design and develop the foundation of a city. The recent incident of water logging in Gurgaon where the entire city came to a standstill for more than 20 hours is the best example of poor Urban Planning.

Generally, it is the responsibility of Department of Town and Country Planning to design and develop these amenities. In Gurgaon, this responsibility, somehow, shifted to developers. Whereas, in Noida the authority develops the road, drainage, sewer and other infrastructures. Once these are done, the land is allotted to the developer.

Noida is far ahead in terms of basic infrastructure a city requires. It can safely be compared with Chandigarh, one of the best-planned cities in India. It only lacked supporting infrastructures like Metro Rail, airport and highways. Fortunately, all these developments are happening in Noida as well. The city has operation Metro Rail connectivity, three highways passing through it and a proposed international airport in Jewar, 72 Kms away from Noida.

With these infrastructures in place and better planned urban amenities, Noida and Greater Noida are giving a tough fight to Gurgaon. Unfortunately, once termed as ‘Millennium City’, Gurgaon is slowly getting buried under its own mess.