HIGHLIGHTS • In 2013, Delhi NCR witnessed approximately 8.31 MN SF of commercial space lease absorption 22% up from previous year. • Within Delhi NCR, 70% of the space was leased in Gurgaon, 23% in NOIDA and the remaining 7% in Delhi. • A number of large deals included developer’s committing to hard options to accommodating new and existing occupier expected growth requirements. • In 2014, sentiment will remains cautious, despite robust absorption in 2013. • Gurgaon is expected to witness a lot of lease renewals in 2014 and 2015.

1. Delhi - NCR Office Market
Snapshot 2013

2. Delhi - NCR Office
Market Snapshot 2013
Quarter-on-Quarter Absorption
Highlights
In 2013, Delhi NCR witnessed approximately 8.31 MN SF of
commercial space lease absorption. Unlike other major Indian
cities, the cumulative new office space leases were 22% more
than the previous year. A number of large deals included
developer’s committing to hard options to accommodating new
and existing occupier expected growth requirements. Despite
better absorption rates, there was almost no new commercial
project launches from the major developers, who preferred to
start residential projects over commercial developments.
3.0
2.71
2.31
2.4
IN MN SF
AVERAGE ABSORPTION
1.65
1.64
1Q
1.8
2Q
1.2
0.6
0.0
Demand
3Q
4Q
Industry Wise Absorption
Within Delhi NCR, 70% of the space was leased in Gurgaon, 23%
in NOIDA and the remaining 7% in Delhi. Most tenants were cost
conscious and looked at ways to reduce their potential occupancy costs. Thus in other markets, relocation and consolidation
were the primary demand generators for office space. Compared
to the previous years, most landlords were willing to provide
greater incentives to occupiers. The average ticket size of the
deals was approximately 34,000 SF around 30% more than the
last year figure of approx. 26,000 SF
Others 15%
Telecom 3%
Manufacturing
5%
1
IT/ITeS
52%
3
BFSI
11%
Approximately 26% of the total absorption of more than 31 MN
SF across top 6 cities was contributed by NCR. IT/ITeS remained
the major occupiers, contributing 50% of the total absorption.
This was followed by Engineering and BFSI, together accounting
for 25% of the total absorption.
Engineering 14%
2
Top 10 Transactions of the Year
Client
Developer /
Landlord
Accenture
Infospace IT SEZ
Unitech Ltd.
810,000
Sector 21, Gurgaon
3Q
Aon Hewitt
Unitech Infospace
Unitech Ltd.
800,000
Sohna Road, Gurgaon
3Q
Samsung Engineering
Plot No. 2A
Individual
500,000
Sector 126, NOIDA
2Q
Convergys
Bestech Towers
Bestech Ltd.
227,320
Sohna Road, Gurgaon
2Q
Cairn Energy
DLF Atria
DLF Ltd.
204,000
NH-8, Gurgaon
1Q
American Express
Building No. 5
DLF Ltd.
200,000
Cyber City, Gurgaon
1Q
Fiserv
DLF IT Park
DLF Ltd.
200,000
Sector 62, NOIDA
1Q
TCS
Green Bouleward
The 3C Company
150,000
Sector 62, NOIDA
2Q
ZS Associates
DLF Worldtech Silokra
DLF Ltd.
132,000
NH-8, Gurgaon
4Q
Equant Solutions
1
Building Name
DLF Cybercity
DLF Ltd.
125,125
Cyber City, Gurgaon
4Q
Area (In SF)
Delhi - NCR Office Market Snapshot 2013 | Colliers International
Location
Transaction Quarter

3. Supply & Vacancy
New office inventory was close to 6.44 MN SF during 2013. Of
the total new space added to the stock in 2013, only 12% was
located in Delhi and the remainder was evenly split between
peripheral micro markets of NOIDA and Gurgaon. The current
overall vacancy is 19%, which is marginally higher than that
recorded at the same time in 2012 (18.5%).
New Supply, Absorption & Vacancy
12
21%
10
18%
15%
8
12%
Rental & Capital Values
There was a marginal 3% Year-on-Year decrease in rentals in
Delhi, while Gurgaon and NOIDA witnessed stable rental values
during 2013 baring few micro markets such as Cyber city in
Gurgaon and sector 18 in NOIDA which witnessed an increase
of 7% and 2.5% respectively, on Year-on-Year basis.
6
9%
4
6%
2
3%
0
2010
2014 Prognosis
The sentiment remains cautious, despite robust absorption in
2013. There is limited new stock that will be ready for fit outs in
2014 and we expect much of it to be deferred to the year after.
On the other hand Delhi corporates are expanding and opening
offices in Delhi due to availability of trained human resources,
proximity to the central government and reasonably priced real
estate. Due to the above, average rental values in Delhi NCR will
remain stable and vacancy rate will fall marginally. Gurgaon is
expected to witness a lot of lease renewals in 2014 and 2015, as
companies that set up offices in 2004 - 06 (the “first wave” of
occupiers) approach the end of their lease terms. These companies face a substantial differential between their current
contractual rentals and the prevailing market rentals at which
the new lease is likely to be signed. These companies will need to
choose between staying in their current location at higher
rentals and relocating to peripheral micro-markets offering
cheaper rentals. Gurgaon will thus witness further segmentation
of micro-markets in cost terms in 2014.
As most of the new supply is expected in NOIDA, the rental
values will be under downward pressure. Locations such as the
NOIDA Expressway may buck the trend as corporate prefer to
locate along this stretch which offers superior infrastructure and
quality of buildings.
Unless circle rates are rationalized, the sale market in Delhi will
remain stressed. As in 2013, sales volume of commercial space
in Delhi will remain low.
2
Delhi - NCR Office Market Snapshot 2013 | Colliers International
2011
2012
New Supply (In MN SF)
2013
2014 F
Absorption (In MN SF)
2015 F
0
Vacancy (In %)
Average Rentals Trends & Forecast
300
FORECAST
240
180
120
60
0
2008
2009
2010
Delhi
2011
2012
Gurgaon
2013 2014 F 2015 F
NOIDA

4. Primary Authors:
62 countries on
6 continents
United States: 140
Canada: 42
Latin America: 20
195
EMEA: 85
$2
Surabhi Arora
Associate Director | Research
+91 124 456 7500
surabhi.arora@colliers.com
Amit Oberoi
National Director I Valuation & Advisory Services
& Research
Sachin Sharma
Assistant Manager I Research
For Office Services:
George McKay
South Asia Director I Office & Integrated Services
george.mckay@colliers.com
billion in
annual revenue
Vikas Kalia
National Director I Office Services
vikas.kalia@colliers.com
1.12
Ajay Rakheja
Director I Office Services
ajay.rakheja@colliers.com
13,500
Technopolis Building, 1st Floor,
DLF Golf Course Road,
Sector 54, Gurgaon - 122 002
TEL +91 124 456 7500
billion square feet
under management
professionals
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