Commercial Office Space Rental in Delhi NCR

Commercial Office Space Delhi NCR

Now is the time to lock occupants in rental contracts existing commercial market decline of the main city, where future supply is relatively relieved by micro-CBD market recorded net absorption in the 5352 meters square fourth quarter 2009, compared to negative absorption in the first three quarters. The exodus of the occupants into profitable suburban areas was stopped primarily due to price correction as the market update – 4Q09 by Jones Lang LaSalle Meghraj Research.

Significant correction in rental prices resulted in large-scale business transaction in the SBD (mainly JASOL). Gurgaon also recorded many IT and commercial leases during the quarter, many of which were extensions. Office Rents in the Delhi NCR more depreciated until reaching its lowest level in the past two years, which also encouraged companies to lock in leases with existing revenues. This led to a slight increase in the level of net absorption in the Delhi NCR from the previous quarter.

Non-IT tenants, especially those in banking, financial services, telecommunications and manufacturing sectors, are still active. Some tenants of IT as Wipro and Ericsson also stopped at the existing rental contracts attractive. The CBD did not witness any other new offering in the fourth quarter of ’09, with the exception of 5203 meters square (56,000 square feet) of renovated space in Connaught Place area.Meanwhile, the SBD witnessed the realization of DMRC IT Park with area built on 330,000 square feet (30,658 square meters) in east Delhi, fully leased to the Royal Bank of Scotland (RBS).

The total stock of commercial offices in the SBD stands at 4.70 million square feet (437,388 m²). Because leasing activity, the vacancy rate in the SBD was reduced from 24 percent in the third quarter to 21 percent in Q4.

Return on assets: In Q4, declining rents continued to slow in most markets, with Grade A office rental space in the CBD, declining an average of 2. The 7 percent in fourth quarter of 200-230 rupees per square foot per month. The rentals in the SBD relaxed slightly this quarter, seeing a correction averaged 6.7 percent in fourth quarter from Rs 140 per square foot per month.The softening of rents in the CBD and SBD was mainly driven by the exodus of occupants of cash costs in Gurgaon locations.

Outlook 12-month : The decrease in rental has softened, paving the way for stability in rent in Delhi NCR. However, the report says there is risk of short-term correction in the first half of 2010 as landlords compete to attract demand for entry. This is also the right time to lock occupants in rental contracts in force at the low in the main city market, where future supply is relatively eased out. However, the expected oversupply in the suburbs with a poor commitment continue to aggravate the vacancy rate in the area and the pressure on rents and sales prices.

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