1. 1 Research & Forecast Report | January 2015 | Colliers International
Office demand
doubled in 2014;
Prospects look
bright
Delhi witnessed approximately 1.18 million sq ft of lease
transactions during 2014, which is almost double the 2013
leasing of 0.6 million sq ft. The absorption was concentrated
in the submarkets of Okhla (24%), CBD (19%), Jasola (17%),
Saket (7%) and other locations such as Aero City, Vasant
Kunj, Mohan Corporative.
The IT/ITeS sector continued to have the highest share in
demand (44%), followed by BFSI (19%) and manufacturing
(11%).
This year, about 1.0 million sq ft of new supply was added to
the city’s Grade A commercial office space. Due to limited
additional supply and improved absorption levels, the city
vacancy has decreased marginally. The overall available
stock was reduced marginally to the tune of 2.2 million sq ft
from 2.7 million sq ft in 2013. The city will continue to have
restrained new supply in the next three years as only a few
projects are under construction in the city like Parsvnath’s
The Parsvnath 27 KG Marg, Infinia by RPS Developers and
NBCC Plaza; they are likely to add about 3.38 million sq ft
by the end of 2017. Another project that was launched in
2014, Vegas by Pratham Group at Dwarka Sector 14, will add
another 1.2 million sq ft to the city; however, the expected
completion of this project is 2019.
Despite improved absorption, rents in Delhi remained
stable on average, except Jasola, where rents rose by 2% YoY;
Connaught Place witnessed a 1% fall in rents YoY. Capital
values declined on average by 2% YoY across the micro-
markets due to restricted sales transactions in the city.
Rental Values
*Indicative Grade A rents in INR per sq ft per month
**Connaught Place
***Netaji Subhash Place
MICRO MARKETS
RENTAL
VALUE*
% CHANGE
QoQ YoY
CBD** 185 - 450 4% -1%
Nehru Place 175 - 225 0% 0%
Saket 140 - 190 8% 0%
Jasola 95 - 130 7% 2%
NSP*** 65 - 75 0% 0%
Research &
Forecast Report
Delhi | Office
January 2015
City Office Barometer
INDICATORS 2014 2015
Vacancy
Absorption
Construction
Rental Value
Capital Value

2. 2 Research & Forecast Report | January 2015 | Colliers International
In 2014, the city did not witness any major infrastructure
project completion; however, the state government has
announced Phase III of the Barapullah Bridge, which will
be built between the DND Flyway and Nizamuddin Bridge
and will connect the INA market with Mayur Vihar. Apart
from this, the government has also raised circle rates by
20% uniformly across the entire category A to H. These
rates were last revised in November 2012, when they were
hiked by more than 200%. The rationale for increasing circle
rates is to reduce the gap between the “going market rate”
at which transactions are occurring and the government
prescribed minimum value for registration of properties.
However, the rate increase cause few location having circle
rates more than the market rates as the location categories
formulated by the government cover large areas that do not
account for the substantial variance in prices within each of
the area categories. Sales transactions were reduced in the
period after the last rate hike.
Trends to watch for in 2015:
The Delhi office market is now in recovery mode after the
general elections. Improved tenant demand from the IT/
ITeS and BFSI sectors has mitigated much of the vacancy
risk. The expected completion of about 1.5 million sq ft of
new Grade A office space in 2015 will help to maintain the
supply and demand equilibrium in the market. As a result,
we do not expect much change in current vacancy levels.
Overall rents will remain stable; however, due to limited
supply, quality buildings will continue to fetch premium
above-market rates.
Source: Colliers International
Top 5 Transactions of 2014
Key Under Construction Projects
CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE
Snapdeal
Independent Building -
A-28
115,000 Mohan Co-operative Lease
GodFrey Philips Omaxe Square 77,610 Jasola Lease
VFS Global Bharti World Mark 70,000 Aero City Lease
Moser Baer Okhla Phase 3 70,000 Okhla Lease
Mankind Pharmaceuticals DLF Prime Tower 54,000 Okhla Lease
BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION
NBCC Plaza NBCC 1,300,000 Kidwai Nagar 2016
RPS Infinia RPS Developer 1,000,000 Mathura Road 2015
NBCC Plaza NBCC 350,000 Okhla 2015
Average Rental And Capital Value Trend
250
300
30,000
35,000
40,000
25,000
20,000
15,000
10,000
5,000
0
200
150
100
50
0
Notes:
1. Office Market: The commercial areas in New Delhi can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola
and Saket .
2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.
3. Available Supply: Total Grade A office 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 figures in the report is based on market information as on 25th December 2014.
Forecast
New Supply (In Mln sqft) Absorption(In Mln sqft)
New Supply And Absorption Trends
2
2
1
1
0
2010 2011 2012 2013 2014 2015F 2016F
2008
2009
2010
2011
2012
2013
2014
2015
2016
RentalValuesINRPersqftPerMonth
CapitalValuesINRPersqft

3. About Colliers International
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Primary Authors:
Surabhi Arora
Associate Director | Research
+91 124 456 7500
surabhi.arora@colliers.com
Sachin Sharma
Assistant Manager | Research
Amit Oberoi I National Director
Valuation & Advisory Services & Research
For Office Services:
Vikas Kalia
National Director | Office Services
Vikas.kalia@colliers.com
Colliers International
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