Tenant appetite for higher quality offices has been
reflected in new leases being executed at abovemarket
rates in select Grade A buildings. We expect
a similar trend in 2017. Due to a dearth of quality
office space in other technology-driven markets like
Pune and Bengaluru, we may see supply-led demand
in coming quarters resulting in increased absorption
volumes.
Due to limited availability of quality supply in
preferred micromarkets, peripheral areas of the city
are likely to grow in coming quarters. With
significant new supply scheduled for completion
along Pallavaram-Thoraipakkam Road by 2020, we
expect this corridor to become the next hotspot for
Information Technology and Information Technology
enabled Service (IT-ITeS) occupiers due to its
proximity to Old Mahabalipuram Road (OMR)-Pre
Toll area and Grand Southern Trunk (GST) Road. We
recommend big occupiers looking for large floor
plates in Special Economic Zones (SEZs) to consider
Chennai to benefit from the upcoming SEZ supply in
OMR-Post Toll micromarket.
In Q1 2017, occupiers mainly continued expansion in
southern peripherals. Though we expect occupier
demand to remain upbeat in these locations, the
upcoming new supply is unlikely to meet the rising
demand in coming quarters resulting in upward
pressure on rents. Absorption of pre-committed
spaces coupled with expected demand upsurge is
likely to outpace the upcoming supply pipeline of 8.1
mn sq ft (757,160 sq m) by the year end.
We expect demand to strengthen in coming quarters
driven mainly by technology and banking, financial
services and insurance (BFSI) firms. Amid high rents
and low vacancy, occupiers based in preferred
locations such as Cyber City and Golf Course Road
are evaluating whether to renew their existing leases
or to relocate to inexpensive locations such as Golf
Course Extension Road and along the NH8.
Significant new supply over 2017 should keep rents
in check in prime locations, while high-vacancy
markets such as Golf Course Extension Road may
see downward pressure on rents.
Steady decline in headline vacancy rates, increase in rents in CBD and SBD, pushed the occupiers to peripheral areas. In our opinion peripheral markets should continue to gain the occupier preference as most of the new supply is concentrated in this micro markets.
We expect tenant favourable conditions to attract
domestic companies and Information Technology
majors to expand operations mainly in the New
Town, Rajarhat and Sector V micromarkets. Rents
are likely to register a 3-5% dip in Sector V and
peripheral areas of New Town and Rajarhat as
property owners are likely to remain flexible on rents
to boost occupancy in their buildings.
Tenant appetite for higher quality offices has been
reflected in new leases being executed at abovemarket
rates in select Grade A buildings. We expect
a similar trend in 2017. Due to a dearth of quality
office space in other technology-driven markets like
Pune and Bengaluru, we may see supply-led demand
in coming quarters resulting in increased absorption
volumes.
Due to limited availability of quality supply in
preferred micromarkets, peripheral areas of the city
are likely to grow in coming quarters. With
significant new supply scheduled for completion
along Pallavaram-Thoraipakkam Road by 2020, we
expect this corridor to become the next hotspot for
Information Technology and Information Technology
enabled Service (IT-ITeS) occupiers due to its
proximity to Old Mahabalipuram Road (OMR)-Pre
Toll area and Grand Southern Trunk (GST) Road. We
recommend big occupiers looking for large floor
plates in Special Economic Zones (SEZs) to consider
Chennai to benefit from the upcoming SEZ supply in
OMR-Post Toll micromarket.
In Q1 2017, occupiers mainly continued expansion in
southern peripherals. Though we expect occupier
demand to remain upbeat in these locations, the
upcoming new supply is unlikely to meet the rising
demand in coming quarters resulting in upward
pressure on rents. Absorption of pre-committed
spaces coupled with expected demand upsurge is
likely to outpace the upcoming supply pipeline of 8.1
mn sq ft (757,160 sq m) by the year end.
We expect demand to strengthen in coming quarters
driven mainly by technology and banking, financial
services and insurance (BFSI) firms. Amid high rents
and low vacancy, occupiers based in preferred
locations such as Cyber City and Golf Course Road
are evaluating whether to renew their existing leases
or to relocate to inexpensive locations such as Golf
Course Extension Road and along the NH8.
Significant new supply over 2017 should keep rents
in check in prime locations, while high-vacancy
markets such as Golf Course Extension Road may
see downward pressure on rents.
Steady decline in headline vacancy rates, increase in rents in CBD and SBD, pushed the occupiers to peripheral areas. In our opinion peripheral markets should continue to gain the occupier preference as most of the new supply is concentrated in this micro markets.
We expect tenant favourable conditions to attract
domestic companies and Information Technology
majors to expand operations mainly in the New
Town, Rajarhat and Sector V micromarkets. Rents
are likely to register a 3-5% dip in Sector V and
peripheral areas of New Town and Rajarhat as
property owners are likely to remain flexible on rents
to boost occupancy in their buildings.
The most demanded brand in affordable homes in north India is having various projects in Delhi-NCR. The Most awaited project after the grand success of Signature Global Park is Signature Global City sector 37D Dwarka Expressway Gurgaon
The occupiers’ demand remained cautious regarding expansion plans in almost all cities amid global economic crisis. The six major cities ie; Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.93 million sq ft which is approximately 15% less than 1Q 2013. Top ranking city for highest absorption rate continues to be Bangalore, Mumbai and NCR region with levels of 2.5 mln sq. ft., 1.41 mln sq. ft. and 1.45 mln sq. ft respectively.
Leasing remained healthy in 2016 despite the flight
of cost-conscious tenants to Delhi's satellite cities.
Demand continued to be driven by the financial
services and manufacturing companies. We expect
0.3 million sq ft (27,870 sq meters) of Grade A office
supply to be delivered in Q1 2017 mainly in the CBD.
We expect a correction in rents especially in grade B
buildings due to tenants' preference for premium
buildings.
HIGHLIGHTS
• uring 1Q 2014, office absorption in eight major cities was recorded at around 8 MN SF, 7% up from last quarter.
•Bangalore and NCR topped the chart contributing 75% in the total absorption.
•All markets, with the exception of Mumbai, Chennai and Pune, have witnessed increase in office absorption.
•With positive signals emanating from the global economy, which finds resonance in our improved export performance, we anticipate further improvement in sentiments after the elections
Colliers radar delhi gurgaon and noida the three aces_june 2018Surabhi Arora, MRICS
The National Capital Region (NCR), is consistently the second largest office market with 20% share of the annual nationwide leasing volume over the past five years. In our opinion, the NCR should retain its dominance in office demand over the next five years. We expect Delhi to see a facelift with redevelopment projects over the coming years. The satellite city Gurugram should remain the preferred city among corporate occupiers against the backdrop of a business-friendly environment, healthy new supply and infrastructure improvements. NOIDA is likely to come out of its image of affordable technology hub and rise as an emerging commercial market. We advise new entrants to choose well- established micromarkets in Delhi and Gurugram while occupiers looking for affordability should start exploring NOIDA for their large requirements and backend operations. In our opinion, investors should keep the momentum upbeat taking cues from the infrastructure initiatives and optimistic business conditions in the region.
Elevators and escalators have become an integral part of daily lives of billions people around the world. With the growth in construction and real estate sector, the demand for elevator and escalator is gradually increasing. This market can be broadly segmented based on new installation, refurbishment, and maintenance. Revenue generated from new installation accounts for around half of the total market while the service segments such as refurbishment and maintenance together contribute the remaining half.
Emerging countries such as China, India, and Brazil are driving the new installation segment whereas the service segments are witnessing steady growth from the developed countries such as the U.S., the U.K., France, and Germany among others.
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.
Demand-supply gap is likely to remain a concern in
coming quarters. While a few grade A office
buildings are likely to see completion towards the
end of 2017, we expect upward pressure on rents at
least in H1 2017. Tenants looking for quality assets
should find their options limited this year given that
most of the new supply is likely to enjoy high precommitment
rates from existing occupiers.
With most of the new supply scheduled for
completion in 2018, vacancy in Pune market is likely
to remain tight in the short term. We cannot rule out
the possibility of further increase in rent as the
additional supply infusion may not meet the pent-up
demand of the last few quarters. In our opinion, the
market is likely to remain tilted in property owners'
favour for a while. In our view, developers should
expedite completion of projects under construction
and plan more new projects to profit from the
untapped demand in the market.
The report will provide you a year-end review of the Mumbai office market and the prognosis for 2014. The Highlights of the report are as follows:
• The prevailing sentiment in 2013 was one of caution due to uninspiring economic conditions.
• Cumulative new leasing of office space in Mumbai in 2013 was 4.76 MN SF
• The BFSI and IT/ITeS were the major occupiers accounting for 46% of the total absorption.
• In 2014, Landlords will be willing to offer greater incentives, rather than lowering base rentals.
• Occupiers holding decisions in 2013 are likely take up new space in 2014 post the national elections hoping for a more inspiring economic trend and improvement of sentiment
For More information:
Please contact
Surabhi Arora | Associate Director | Research
Surabhi.arora@colliers.com
The most demanded brand in affordable homes in north India is having various projects in Delhi-NCR. The Most awaited project after the grand success of Signature Global Park is Signature Global City sector 37D Dwarka Expressway Gurgaon
The occupiers’ demand remained cautious regarding expansion plans in almost all cities amid global economic crisis. The six major cities ie; Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.93 million sq ft which is approximately 15% less than 1Q 2013. Top ranking city for highest absorption rate continues to be Bangalore, Mumbai and NCR region with levels of 2.5 mln sq. ft., 1.41 mln sq. ft. and 1.45 mln sq. ft respectively.
Leasing remained healthy in 2016 despite the flight
of cost-conscious tenants to Delhi's satellite cities.
Demand continued to be driven by the financial
services and manufacturing companies. We expect
0.3 million sq ft (27,870 sq meters) of Grade A office
supply to be delivered in Q1 2017 mainly in the CBD.
We expect a correction in rents especially in grade B
buildings due to tenants' preference for premium
buildings.
HIGHLIGHTS
• uring 1Q 2014, office absorption in eight major cities was recorded at around 8 MN SF, 7% up from last quarter.
•Bangalore and NCR topped the chart contributing 75% in the total absorption.
•All markets, with the exception of Mumbai, Chennai and Pune, have witnessed increase in office absorption.
•With positive signals emanating from the global economy, which finds resonance in our improved export performance, we anticipate further improvement in sentiments after the elections
Colliers radar delhi gurgaon and noida the three aces_june 2018Surabhi Arora, MRICS
The National Capital Region (NCR), is consistently the second largest office market with 20% share of the annual nationwide leasing volume over the past five years. In our opinion, the NCR should retain its dominance in office demand over the next five years. We expect Delhi to see a facelift with redevelopment projects over the coming years. The satellite city Gurugram should remain the preferred city among corporate occupiers against the backdrop of a business-friendly environment, healthy new supply and infrastructure improvements. NOIDA is likely to come out of its image of affordable technology hub and rise as an emerging commercial market. We advise new entrants to choose well- established micromarkets in Delhi and Gurugram while occupiers looking for affordability should start exploring NOIDA for their large requirements and backend operations. In our opinion, investors should keep the momentum upbeat taking cues from the infrastructure initiatives and optimistic business conditions in the region.
Elevators and escalators have become an integral part of daily lives of billions people around the world. With the growth in construction and real estate sector, the demand for elevator and escalator is gradually increasing. This market can be broadly segmented based on new installation, refurbishment, and maintenance. Revenue generated from new installation accounts for around half of the total market while the service segments such as refurbishment and maintenance together contribute the remaining half.
Emerging countries such as China, India, and Brazil are driving the new installation segment whereas the service segments are witnessing steady growth from the developed countries such as the U.S., the U.K., France, and Germany among others.
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.
Demand-supply gap is likely to remain a concern in
coming quarters. While a few grade A office
buildings are likely to see completion towards the
end of 2017, we expect upward pressure on rents at
least in H1 2017. Tenants looking for quality assets
should find their options limited this year given that
most of the new supply is likely to enjoy high precommitment
rates from existing occupiers.
With most of the new supply scheduled for
completion in 2018, vacancy in Pune market is likely
to remain tight in the short term. We cannot rule out
the possibility of further increase in rent as the
additional supply infusion may not meet the pent-up
demand of the last few quarters. In our opinion, the
market is likely to remain tilted in property owners'
favour for a while. In our view, developers should
expedite completion of projects under construction
and plan more new projects to profit from the
untapped demand in the market.
The report will provide you a year-end review of the Mumbai office market and the prognosis for 2014. The Highlights of the report are as follows:
• The prevailing sentiment in 2013 was one of caution due to uninspiring economic conditions.
• Cumulative new leasing of office space in Mumbai in 2013 was 4.76 MN SF
• The BFSI and IT/ITeS were the major occupiers accounting for 46% of the total absorption.
• In 2014, Landlords will be willing to offer greater incentives, rather than lowering base rentals.
• Occupiers holding decisions in 2013 are likely take up new space in 2014 post the national elections hoping for a more inspiring economic trend and improvement of sentiment
For More information:
Please contact
Surabhi Arora | Associate Director | Research
Surabhi.arora@colliers.com
• In 1Q 2013, Mumbai, NCR, Bangalore, Chennai Kolkata and Pune recorded an overall absorption of more than 8 million sq ft. Bangalore saw the highest absorption, followed by the Mumbai and NCR markets however, Kolkata and NOIDA markets witnessed relatively weaker demand. We anticipate stability in rental values across the major markets due to large inventory in pipeline despite recovery in demand.
• Increased absorption of commercial and IT real estate space
• The CBD of Delhi sees a significant drop in the vacancy rates
• Excessive supply leads to stabilized rental values
Sunil Seth Kakkad
E-mail: sethkakkad@gmail.com
Mobile: +91-9820614117/ +91-9322510025
I UNDERTAKE MARKET RESEARCH ANALYSIS FOR PROPERTY MARKET
CASE STUDY DEMAND SUPPLY & PRICE TREND CASE STUDY OF POTENTIAL OF LAND PARCEL .
CAN CALL 9820614117 SUNIL SETH KAKKAD MUMBAI
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E-mail: sethkakkad@gmail.com
Mobile: +91-9820614117/ +91-9322510025
In quest of senior Managerial positions in profit center management, sales & marketing, business development, business networking with a reputed and growth-oriented organization. Open to assignments overseas.
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• An astute professional with 18 years of experience in sales & marketing, business development, market intelligence and customer relationship management with reputed organizations across industry verticals.
• Strong domain experience for the following ,
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• experience in local market of Mumbai, Navi Mumbai Indore, Bhopal, Gwalior, chandigarh,panchkulla, mohali, karnal, panipat, kurushetra & Delhi
• Highly resourceful in maintaining strong business networking with reputed developers, infrastructure company, ipc, real estate consultants & brand re-tailers with category for business promotion.
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Amid surging office demand in this re-established IT
hub, most of the upcoming quality office spaces
have been pre-committed by occupiers, creating a
severe supply shortage. Hyderabad's average office
rent is likely to surge in 2017, as en-bloc
completions are still 12-15 months away. We advise
developers to expedite construction and undertake
new projects to meet the heightened occupier
demand to retain the city's image of an affordable
Information Technology and Information Technology
and enabled services (IT-ITeS) location.
In the first quarter of 2016, the top six* cities witnessed the
infusion of nearly 19,000 new residential units. Of the total,
maximum launches were concentrated in Mumbai (34%),
Bengaluru (32%) and Pune (12%). Whilst developers across all
major cities steered clear of inundating the primary residential
segment with too many new products, recovering market
confidence prompted them to lure buyers with cash discounts
and freebies. As per Reserve Bank of India (RBI)’s new
directive, interest rates will have to be reviewed every month on
the basis of MCLR (marginal cost of lending rate) which is
expected to bode well for the buyers seeking home loans.
The latest report by Colliers Research titled ‘India Office Property Market Overview Q1 2017’ is now out and ready for download. Notwithstanding the demonetisation of high-value currency notes in November 2016, the economy recovered faster than expected and early projections suggest a growth of 7.1% in the fiscal year ending March 2017. All the key economic indicators suggest that India’s consumption based recovery is on track, and the economy is benefiting from an upswing in demand and output. Although five months on from demonetisation occupiers' markets across India's major cities have seen no discernible adverse impact, we expect demand to firm up driven by the strengthening economy. Gross office take-up in India amounted to 9.3 million sq ft (863,998 sq m) in Q1 2017. The Bengaluru (Bangalore) market maintained its top position across nine cities despite low vacancy and recorded an overwhelming share of 37% in total absorption. Mumbai and Delhi NCR followed with shares of 18% and 17% respectively in total absorption. Chennai, Pune, Hyderabad and Kolkata accounted for 11%, 9%, 6% and 2% respectively in the overall leasing volume.
o Ascending corporate occupier demand
o Surge in demand for land in Mumbai
o Upcoming commercial projects to be mixed use development or residential development.
o Creation of Mumbai Development Fund (MDF) to finance mega infrastructure projects in the city.
In this edition of Corner Space we bring you interesting updates from the Indian real estate sector. Engaging features on REITS – the key to retail investment and software exports driving CRE growth in Hyderabad top the list.
Similar to Gurgaon Office Market Overview Jan 2015 (20)
1. 1 Research & Forecast Report | January 2015 | Colliers International
Absorption dipped
by 13% YoY in
2014 but good
prospects for 2015
Gurgaon remained the most active and preferred market
in 2014 among corporate occupiers in the NCR region.
The satellite city shared about 67% of overall absorption in
NCR. Gurgaon recorded leasing volumes of 4.73 million
sq ft in 2014, which is approximately 13% less than the
previous year’s absorption of 5.47 million sq ft. IT/ITeS was
the primary contributor of this demand, followed by the
BFSI and logistics sectors. The share of the IT/ITeS sector
has further increased to 62% of the total absorption this
year. Last year, IT/ITeS accounted for only 53% of the total
absorption.
Due to its connectivity advantages and affordable rents,
NH8 remained the most preferred location and accounted
for 31% of the total absorption followed by Institutional
Sectors (16%) and Udyog Vihar (14%).
With the overall cautious market sentiments during the year,
developers had deferred constructing new office space.
As a result, new supply in 2014 was 3.2 million sq ft, down
from 4.53 million sq ft in 2013. The city is expected to see
completion of about 3.5 million sq ft of new office space
in 2015 as developers are expected to focus on completing
their existing projects, especially those with ready
structures.
More than 16.8 million sq ft of office space is available
for lease in the Gurgaon market, of which about 37% is
located in the Golf Course Road Extension and Sohna Road,
followed by NH8 (19%), Udyog Vihar (18%) and Golf Course
Road (12%). Vacancy is expected to remain stable in 2015 as
developers will remain cautious in adding more speculative
Research &
Forecast Report
Gurgaon | Office
January 2015
Rental Values
*Indicative Grade A rents in INR per sq ft per month
MICRO MARKETS
RENTAL
VALUE*
% CHANGE
QoQ YoY
MG Road 90 - 140 2% -2%
DLF Cyber City (IT) 85 - 90 4% 11%
Golf Course Road 85 - 140 0% 0%
Institutional Sectors
(Sec 44, 32, 18)
55 - 95 0% 0%
Golf Course Road
Ext./Sohna Road
55 - 75 4% 15%
National Highway 8 50 - 150 5% 14%
Udyog Vihar &
Industrial Sectors
35 - 50 0% -11%
Manesar 40 - 42 9% 0%
City Office Barometer
INDICATORS 2014 2015
Vacancy
Absorption
Construction
Rental Value
Capital Value
2. 2 Research & Forecast Report | January 2015 | Colliers International
supply in view of current vacancy levels.
Office rents witnessed an average increase of about 6%
YoY across the micro-markets. A few locations, such as
Institutional Sectors, Golf Course Road, Sohna Road and
National Highway 8 recorded increases in the range of 10 to
15%, while Udyog Vihar and Industrial Sector witnessed an
annual decrease of about 11%.
The city lacks basic infrastructure and has not witnessed
any improvement in 2014 either. However, a few projects,
such as the Rapid Metro project by DLF and the Subhash
Chowk Flyover, have picked up pace and are expected to be
completed by 2016. Gurgaon District Administration has
revised the circle rate in its five zones, Gurgaon, Manesar,
Sohna, Farukhnagar and Pataudi, on an average by 15%.
Trends to watch for in 2015:
Gurgaon will remain the preferred office destination in NCR.
The leasing profile will be dominated by corporate offices
of large IT/ITeS companies. As business confidence in the
economy picks up, we expect these tenants to commit to
large office spaces, especially in Special Economic Zones.
Supply demand equilibrium will keep rents in check in
peripheral locations; however, rents in micro-markets
like Cyber City, Udyog Vihar and NH8 will continue to
strengthen further. Golf Course Road and its Extension
Road are positioning themselves as significant future
development destinations with large upcoming supply.
However, the development of Golf Course Road and Golf
Course Extension Road will be tied to Metro projects and 16
lane highway which are set to serve this market by 2016.
Top 5 Transactions of 2014
Key Under Construction Projects
CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE
Aricent Unitech Infospace 550,000 Sector 21, Dundahera Lease
TCS Hines Skyview Tower 450,000 National Highway 8 Lease
WNS DLF Silokhera 145,000 National Highway 8 Lease
Accenture Unitech Infospace 120,986 Sector 21, Dundahera Lease
Copal Partners
Independent Building -
Plot 267
120,000 Udyog Vihar Lease
BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION
Business Club AIPL Group 700,000
Golf Course Extension
Road
2015
Parsvnath IT Park Technicia Parsvnath Developers 695,000 Sohna Road 2015
Unitech Infospace, Phase 2
Building 7
Unitech Developers 450,000 National Highway 8 2015
Average Rental And Capital Value Trend
100
120
140
8,000
10,000
14,000
12,000
6,000
4,000
2,000
0
80
60
40
20
0
Source: Colliers International
Notes:
1. Office Market: The prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as
the city’s new office destination.
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
6
5
4
3
2
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
Technopolis Building, 1st Floor, DLF Golf Course Road,
Sector 54 | Gurgaon - 122002 | India
485