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Availability of authorized office space in the South Delhi micro markets is equally inadequate. With most of the space already leased out, the vacancy rate is close to 3%-4%. Annual rental escalation in this market has been approximately 65% with capital value appreciation close to 95%.

Suburban markets like Noida and Gurgaon have been witnessing a similar trend. Prime buildings in Gurgaon reflect a vacancy rate of less than 2% and prices have risen by approximately 80% since the last one year. Although the NOIDA Authority has released additional land for private development and this may lead to an estimated 2 million sq.ft. of Grade A office space being available, completion is still 16-18 months away.

Rates across markets have risen due to the commencement of the metro rail network in certain locations and the plans to connect other destinations within Delhi. In addition, the MCD's eviction drive has created further pressure on availability of legitimate office space in and around Delhi, given the limited availability of space.

Lease rentals and capital values are expected to further strengthen across all markets in Delhi, during the next quarter. This rise will also affect suburban locations like Noida and Gurgaon as well.

The chart on the left shows current commercial real estate capital and rental values for Delhi & NCR localities.

Recent Leasing Transactions in Delhi & NCR

• Noida Sector 59 - Induslogic leased approximately 50,000 sq.ft. built-up area.
• Udyog Vihar, Gurgaon - Bharti leased approximately 60,000 sq.ft. built-up area.
• Mira, Eshwar Nagar - Geo Petrol leased approximately 12,000 sq.ft. built up area.
• Udyog Vihar, Gurgaon - Teleperformance leased approximately 60,000 sq.ft. built-up area.
• Jasola, New Delhi - Target leased approximately 30,000 sq.ft. built-up area.
• Genesis, MCIE - Bio Merxue leased approximately 25,000 sq.ft. built-up area.

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About Cushman & Wakefield

Cushman & Wakefield is the world’s pre-eminent real estate services firm. Founded in 1917, the firm has 192 offices in 58 countries around the globe, and more than 11,000 talented professionals. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process.  These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services.