Delhi NCR’s being India’s political capital enjoys a relatively better infrastructure in comparison to other metro cities and this has led to a steady increase in the number of business establishments that are set up here every year, especially the many MNC’s that are now starting to trickle in after the relaxed norms in the FDI for different sectors. As a result, there has been a strong demand for commercial office rental space in the Delhi NCR area which has consequently ballooned the rental costs in certain pockets. As per a recent survey done by an International real estate brokerage firm, Delhi’s Connaught Place area was one of the top 5 most expensive places to take an office space on lease in the World. This may be bit of an exaggeration; however it is also true to a certain extent in the case of the limited A grade buildings of Connaught place that are abutting the Lutyens area. In spite of the towering rental costs in certain pockets, most of Delhi’s business districts are still very affordable contrary to the popular belief that the NCR region of Gurgaon and Noida, somehow have a cost advantage over the former.
Just like any other city, the office per sq ft cost in Delhi is largely based on two factors – Location and Building type/grade. While certain prime areas such as Connaught Place, Lutyens Zone, some premium institutional areas, do have a high per sq ft cost, most of the other business districts in all most all directions of Delhi are still very affordable. Buildings are primarily divided in three categories, Grade A, Grade B and C. Grade A buildings command a higher rental fee as compared to Grade B or Grade C buildings. Grade A buildings may not be the best in terms of optimum space utilization (super and carpet area ratio) however, they have modern aesthetics with high quality finishes. They usually have large contiguous floor plates, well-decorated lobbies with a high atrium and circulation areas; state of the art heating, ventilation and Air conditioning system, high speed elevators, professional facility management and dedicated parking areas. Grade B buildings are ordinary in design with good quality finishes. They have average-sized floor plates; adequate lobbies; central or free-standing air-conditioning; adequate lift services; good management; and parking facilities may or may not be available. Grade C buildings are mostly 30 + years or more old structures that are very plain with basic in their finish. They have small floor plates; basic lobbies; no central air-conditioning; barely adequate lift services; minimal to average management and no parking facilities.
Major Commercial Space Districts in Delhi
Many different CBD’s, SBD’s and EBD’s are spread across the length and breadth of Delhi NCR which could be mainly divided into two kinds, first which came about right after independence and opening up of Delhi MPD 1962 and the second kind, that emerged after 1991 when Indian economy was thrown open for international companies. The older building have a locational and over all infrastructural advantage however, the structure itself has taken a beating over time thus in a way the modern buildings at new business districts like Saket, Jasola, Gurgaon, Netaji Subhash Place and others with their state of the art features, more or less make up for the loss in rental value because of a relatively inferior location to that of the old business districts such as Nehru Place, Bhikaji Cama Place, Connaught Place, Rajendra Place etc. Here is a quick snap shot of each commercial office space business zones in Delhi and its satellite towns of Gurgaon and Noida.
Central Zone is the financial and administrative center of Delhi and it basically includes everything with 5 Km of Connaught Place such as the entire Lutyens Zone, ITO, Delhi Gate, Rajendra Place, Pusa Road, Karol Bagh etc. It is also Delhi’s most sought after and expensive areas for leasing an office space. Central Delhi’s typical tenant profile includes, government and PSU administration offices, banks, currency exchangers, travel companies, legal firms, financial institutions, insurance companies, trading houses, business centers, electronics service centers, MNCs, marketing and PR firms. Central Delhi used to have the highest concentration of Grade A buildings in Delhi however lately south Delhi has taken over with new developments like Jasola, Saket etc and central Delhi buildings have aged over the years with time. All the areas of centrail Delhi are very well connected from all parts of Delhi and NCR via metro. IGI airport is within 12-20 KM and New Delhi railway station is with 2-5 KM radius from all areas of Central Delhi. Central offers easy access to transportation services, hotels and eateries. Some of Central Delhi’s iconic commercial buildings include the Statesman Tower, Hindustan Times Tower, Le Meridian Hotel, Birla Tower, Connaught Circus, Videocon Tower, Konnectus tower, Amba Deep, etc.
The average monthly rents in Central Delhi, as of July 2014, are as follows:
- Grade A buildings – Rs 175-400/sq ft/month
- Grade B buildings – Rs 125 – 150/sq ft/month
- Grade C buildings – Rs 90-120/ sq ft/month
South Delhi again is a very popular commercial space destination because of its proximity to the Lutyens area, excellent infrastructure and connectivity. It also offers the maximum range in terms of quality of space as well as budgets. Some of the oldest SBD’s of Delhi like Bhikaji Cama Place,Lajpat Nagar, Nehru Place, South Ext, Vasant Vihar, Defense colony are in south zone, other areas include, Hauz Khas, Vasant Kunj, Old Saket, Okhla, etc. Some new EBD’s such as Saket, Jasola, Aerocity have been added to south Delhi making it even dense for quality commercial space inventory. IGI airport is within 2-10 Km radius for most south Delhi areas while NDRS is about 5-15 Km. Most areas in South Delhi are covered by the metro blue and the violet line, all areas also have great connectivity via buses, taxis and autos. All kind of business prefer South Delhi for their office requirement but some of the key occupiers include, telecom companies, banks, pharmaceutical companies, education Institutes, institutions, NGO’s, small industries etc.
The average monthly rents in South Delhi, as of July 2014, are as follows:
- Grade A buildings – Rs 100 – 175/sq ft/month
- Grade B buildings – Rs 90 -125/sq ft/month
- Grade C buildings – Rs 60-80/sq ft/month
West Zone and North Zone
Till recently most parts of west and north Delhi were considered to be far flung and a traditional small retail trader area with small hubs like Kirti Nagar, Patel Nagar, Tilak Nagar, Rajouri Garden, Pitampura, Punjabi Bagh, Dwarka etc catering to the local residents. There were hardly any business commercial office districts except for the SBD of Janakpuri and a handful of small DDA community center markets at a few areas, however, with Delhi’s rapid infrastructural improvements like flyovers, better connecting roads, metro expansion, new parking spaces etc north and west Delhi does not seem that far anymore. DLF tower in Moti Nagar, Netaji Subhash Place District center, Shivaji Place district center in Rajouri Garden, Ambience Towers in Rohini and Shalimar bagh, DMRC towers in Dwarka, etc have bought a lot of fresh inventory of A grade commercial office space at competitive rates.
The average monthly rents in West and North Delhi of July 2014 are as follows:
- Grade A buildings – Rs 60 – 90/sq ft/month
- Grade B buildings – Rs 40 – 70/sq ft/month
- Grade C buildings – Rs 30 – 60/sq ft/month
Gurgaon also known as the millennium city for its modern buildings and rapid infrastructural growth was a result of saturation in quality space in south and west Delhi corridors. Today this satellite town toward south of Delhi is extremely well connected via NH 8, MG road, Dwarka express way (work underway), Faridabad road cutting across the Aravali forest as well as the Delhi Metro. Apart from metro the city’s central business district area is interconnected via a 6 KM rapid metro route. City emerged as an extension of the south-western precincts of Delhi. Gurgaon became the final frontier for multinational companies into IT and ITES who need large contiguous floor plates of at least 50K sq ft to up to 2 Lakh sq ft as Delhi become saturated because of limited land pool and quality commercial space. Udyog Vihar and cybercity both together spread across over 300 acres of land were the first commercial hubs of Gurgaon set up in the late 1990’s which primarily cater to IT and ITES companies. Sec 44, 32 and info city in 33-34 were developed for institutional office buildings. Other commercial areas MG road, Golf course road, extension road, Sohna road etc followed simultaneously and today after around 15 years even Gurgaon is looking to stretch its boundaries to farther areas like Mansear and Dharuhera. Most fortune 500 companies have their offices set up in Gugaon however the typical tenant profile that is occupying most of Gurgaons office space inventory are IT/ITES/BPO’s, nonpolluting small scale industries, tech companies and financial companies back offices. Some of the iconic buildings include the Gateway tower and Titanic building on NH 8, infinity tower at cyber city, signature tower on NH8, DLF corporate park etc.
- Grade A buildings – Rs 40 – 110/sq ft/month
- Grade B buildings – Rs 30 – 60/sq ft/month
- Grade C buildings – Rs 10 – 40/sq ft/month
Commercial (office/retail/IT/industrial) real estate in NOIDA is spread across various sectors. Sector 1 to 6, 10, 16, 16A, (Film City), 51, 52, 57 to 62,63 and hosiery complex SEZ zone all offer IT/ITES/industrial/institutional space while Sector 21, 18 (Atta), 62, 28, 29 and 37 also have areas for retail and commercial office space activity. Tenant profile that is occupying most of Noida’s office space inventory is electronics companies; IT/ITES/BPO’s, handloom/textile industries, tech companies and financial companies back offices. Some of the iconic buildings include Wipro campus in knowledge park, Corenthum, Logix business park in sector 62, Moser Bear SEZ, HCL tech park in sector 126 The average monthly rents in Noida as of July 2014 are as follows:
- Grade A buildings – Rs 40 – 90/sq ft/month
- Grade B buildings – Rs 40 – 60/sq ft/month
- Grade C buildings – Rs 10 – 40/sq ft/month
There has been a steady demand for office space in Delhi NCR and office rents in the core business districts have continued to rise at a strong pace. Much of Gurgaon is also saturated in terms of commercial development and to keep pace with the growing demand, sub urban business districts like Dwarka, Rohini, Narela and new 5 upcoming zones in the MPD 2021 are likely to increase commercial office space supply in the years to come to offer competitive rentals as far as A grade commercial developments are concerned. Given the projection about India’s growth in the next couple of decades Delhi is positioned as a preferred location for multinational companies and FII’s, the demand for office space is only going to increase in the years to come.
In case your company is looking to lease/rent commercial space in Delhi or just doing some looking around to see if you can save some money by moving out to a cheaper and better location, feel free to call us or write to us at admin AT officespaceindelhi.com