In 2017, demonetization was a game-changer of the most critical kind, bringing the real estate market down on its knees in the first quarter of the year. Thereafter, a mixed bag of events Real Estate Regularization Act, the reforms in the Benami Transactions Prohibition Act and GST implementation further went on to shape the year for real estate in India, in the second half of the year.
The transaction volume in the second half of the year was drastically affected by this. However, the commercial real estate in Noida led the charge across India in maintaining a respectable profitability.
The overall leasing volume is expected to remain at the very least at par with the project figures of last year. Technology companies did a good job of driving the demand for premium office space; they were followed in this pursuit by engineering manufacturing, BFSI and co-working enterprises. Pre-committed large spaces were the highlighted trend this year with co-operated working spaces ruling the market.
Office real estate in Noida and other Indian cities rule the roost in the largest office markets in Asia. Office space occupiers have faith in the Indian market, hoping for a projected potential to come to fruition in the near-future. This attribute is for good reasons, as the market for investment properties in Noida show the following,
Definitive trends shaping up commercial real estate in Noida:
1. Leaning towards pre-commitments in contractual leases
Multiplying demands for pre-commitments in office real estate leasing defines the Noida market. Large multinationals have figured out a novel alternative in strategizing real estate portfolio and pre-committing space for future needs. This sort of profile optimization seeks to make up for the shortage of viable real estate supply and increasing rent-value.
2. Purchasing even more than leasing
A lot of corporate occupiers are veering towards real estate purchases as opposed to renting. IKEA recently bought close to 10 acres worth of plot in Gurgaon from HUDA and Lava International were responsible for obtaining a large, secure real estate asset in Greater Noida for a future manufacturing unit. Even Hyundai joined the trend of realizing long-term visions by relocating their offices to Gurgaon and purchasing commercial estate in Sec-29. GSK settled for Golf Course Road in Gurgaon with a whopping 60, 000 sq ft estate in Hines One Horizon Centre.
3. Preference of longer lease terms
The market for investment properties in Noida, NCR was known for witnessing leases with terms as long as 9 years. However, the current crop of lease agreements being drawn by corporates are stating almost 12-15 years on the contract. This tactic is being sought in sight of the rent hike.
4. Co-operative office space design
Collaborative work space design is being implemented to promote the company vision and human resource culture.
5. Technical advancements in the workplace
Technology is being implemented to make the workplace more vibrant and efficient. For instance, Amazon had invested in Kiva Systems in 2012, and as a result have more than 45,000 robots distributed across their centers.
6. Collaborating with other brands
Co-operative mergers are being drawn up with other brands to improve the design and approach to livening up the workplace. It helps provide a flexibility to the lease terms as well.
7. Office-space consolidation
Corporate enterprises are trying to save on real estate expenditures by unifying their work space requirements. This provides logistical advantages besides useful utilization of commercial space. It improves the business profitability as well.
8. Eco-friendly, smart, green design
Occupiers of office real estate in Noida are trying to step up to their social duties by opting for green, eco-friendly environment, in context to business amenities, infrastructure, and optimized energy foot-prints, etc.
Corporate, commercial real estate in Noida is going through some interesting times, with company’s basing their entire planning and operation on their real estate strategy. A company’s real estate strategy is now an important function that can add to its profitability.