noida office property market overview april 2015
DESCRIPTION
NOIDA | Office April 2015:Absorption declined in 1Q 2015, despite few large transactions.TRANSCRIPT
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1 Research & Forecast Report | April 2015 | Colliers International
Absorption declined in 1Q 2015, despite few large transactionsThe NOIDA office market witnessed a major downturn this quarter, in terms of absorption. The office market witnessed about 0.5 million sq ft of office absorption, which is almost half of 4Q 2014s absorption figure of 1 million sq ft. Expansion and relocation were the primary demand drivers this quarter. IT / ITeS continued to be the dominant sector leasing office space in NOIDA. There was also some demand from manufacturing companies who leased smaller office spaces in locations like Sector 62 and 59. The most significant leasing transaction for 1Q 2015 took place in Institutional Sector 62, with Kronos leasing 70,000 sq ft in Okaya Blue. Jubilant Industries signed a 67,000-sq ft lease at Logix Technopark and Lava Mobile took 60,000 sq ft in a stand-alone building in Sector 58.
The construction scenario showed signs of improvement, and the city witnessed the completion of over 1.3 million sq ft of prime office space. The projects that were completed this quarter include World Trade Tower by Sapphire Group measuring over 1 million sq ft and located in Sector 16 and Stellar Business Park (0.24 million sq ft) by Stellar Group located in Sector 135 (Expressway).
At present, approximately, 13 million sq ft of Grade A office space is available for lease or sale in the NOIDA office market. Approximately 51% of this vacant stock is located in Institutional Sectors, including locations like Sector 16A, Sector 62 and Sectors 125 to 142. About 48% is available in the Commercial Sector (Sector 18). Overall rise in vacancy
Research & Forecast Report
NOIDA | OfficeApril 2015
Rental Values
*Indicative Grade A rents in INR per SF per month**Sector 18***Sector 16A, 62, 125-142****Sector 124, 57-60, 63-75
MICRO MARKETS RENTALVALUE*% CHANGE
QoQ YoYCommercial Sectors**
90 - 110 -2% 3%
Institutional Sectors (Non IT)***
55 - 110 3% 18%
Institutional Sectors (IT)***
45 - 65 5% 5%
Industrial Sector (IT)**** 35 - 55 5% 15%
City Office Barometer
INDICATORS 1Q 2015 2Q 2015 F
Vacancy
Absorption
Construction
Rental Value
Capital Value
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2 Research & Forecast Report | April 2015 | Colliers International
levels was noticed during the quarter due to less absorption and addition of new supply.
In a major offi ce sale transaction, Kotak Mahindra Group and private equity fund New Vernon Capital Llc. have jointly bought Green Boulevard, an information technology (IT) park at Noida in the National Capital Region for Rs 270 crore from 3C Company. Th e property is about 700,000 sq ft located in Sector 62.
Colliers View
We anticipate an increase in absorption in the coming quarters in sectors along NOIDA expressway and Sectors 62 to 65. In the Institutional Sectors, demand will be primarily from midscale IT / ITeS companies, whereas NOIDA expressway will see demand from large corporations. An upward pressure on rents is expected in the Institutional Sectors due to limited supply addition. Meanwhile, other markets will remain stable.
Top 5 Transactions of the Quarter
Key Under Construction Projects
CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE
Kronos Okaya Blue 70,000 Sector 62 Lease
Jubilant Industries Logix Techno Park 67,000 Expressway Lease
Lava Mobile Individual Building 60,000 Sector 58 Lease
Genpact Stellar 135 60,000 Expressway Lease
Oxford Stellar IT Park 20,000 Sector 62 Lease
BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION
Delhi One The 3C Company 2,000,000 DND Flyway 2015
Mist Avenue Bhasin Group 1,000,000 Sector 143 2015
Assotech Business Cresterra Assotech 500,000 Sector 135 2015
Quarter Wise Absorption
Average Rental And Capital Value Trend
70
90
80
8,000
10,000
14,000
12,000
6,000
4,000
2,000
0
60
50
40
30
10
20
0
0.40
0.20
0.60
0.80
1.00
1.20
0.00
1Q 2
013
2Q 2
013
3Q 2
013
4Q 2
013
1Q 2
014
2Q 2
014
3Q 2
014
4Q 2
014
1Q 2
015
Mill
ion
Sq.
ft.Re
ntal
Val
ues
INR
Per
SF
Per
Mon
th
Capt
ial V
alue
s IN
R P
er S
F
Notes:
1. Offi ce Market: NOIDA market is comprised of sectors broadly classifi ed as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and125-142,
industrial sectors include Sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.
2. Rents/Capital Value: Market average of indicative asking price for Grade A offi ce space.
3. Available Supply: Total Grade A offi ce space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the fi gures in the report is based on market information as on 25th March 2015.
Forecast
1Q 2
009
1Q 2
010
1Q 2
011
1Q 2
012
1Q 2
013
1Q 2
014
1Q 2
015
1Q 2
016F
1Q 2
017F
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