Noida Leaves Gurgaon Behind; May See 50% Of New Office Supply

While Gurgaon is assumed to be a better paymaster for the skilled workforce, it is Noida which will be having more employment opportunities in the coming three years. According to a report by an international property consultants, around 44 million square foot (sqft) of new office space is coming up in the national capital region (NCR). Of this, 50 per cent is coming up in Noida while the remaining will come in Gurgaon and New Delhi.

The focus area

At present, the demand for office space has been highest in areas such as Noida sector 62 to 65, NH-24 and Noida Expressway due to the upcoming transit infrastructures such as flyovers, underpasses that would improve the traffic conditions in these areas. Apart from this, the upcoming metro connectivity has made these locations more attractive for the businesses. The Noida-Greater Noida metro which is slated to get operational in next few months would connect all the leading business parks along the expressway. This tends to bring down the operation cost for the corporates who have to provide door-to-door cab services to their employees. On the contrary, the intra-connectivity in Gurgaon is poor as the metro connectivity is limited to Huda City Centre and the corporate houses have to shell out extra to provide last mile connectivity to their employees. For Delhi, the high-grade offices command exorbitant rentals which makes it unaffordable for most of the enterprises.  

Currently, Noida is dominated by tech companies, followed by finance, engineering, and manufacturing units. In recent transactions, companies like Conduent, Nokia, EXL, Kalpatru, Cargil have acquired huge space in the commercial hubs of Noida. The trend is expected to gain ground in near future owing to excellent infrastructure and affordable rents even in the most premium office spaces. While the quality of the commercial buildings still remains questionable as the delivery is being deferred by the developers due to funding issues, the range of new office supply is expected to impact the residential pockets in the vicinity.

Investors take a note

According to the numbers available with Proptiger’s Datalabs, Noida is one of those cities which have shown marked improvement in sales in the last quarter of FY18 but have witnessed price drop by 2 per cent. The affordable housing of Noida has brought in more end users which might be good news for investors.

While a majority of high-quality office spaces is coming along Noida Expressway, the housing supply in the vicinity is going to be selling like hot cakes. Real estate experts are of opinion that residential stocks closest to business address command heavy premium. Investors seeking housing options as a source of income can focus on areas such as Sector 90, 91, 93 136, 137, 141, 142, 143, 143B. These areas have some ready to move in projects that are available in the price range of Rs 4,000-6,000 per sq ft. While the asking values have already gone up due to the scheduled metro connectivity, property prices might take a jump once it actually gets operational.

Currently, a 3BHK apartment in the area is available in the range of Rs 80 lakh- 1.5 crore which would command a monthly rent Rs 10,000-15,000. While the accessibility of the area would improve, the demand would push up the rental values by 15-20 per cent, going by historical values.

While sector 62 has some residential zones which are dominated by paying guest accommodations and hostels, the compulsory license mandated by Noida Authority might put a leash on illegal mushrooming of such units. Indirapuram is another micro market that would be directly benefitted due to the new upsurge in commercial leasing in the area. For investors seeking to invest in these pockets, Indirapuram and nearby areas can be a preferred choice, provided the construction is on time.