As per the Colliers Research, at least 11 million sq ft of office supply is expected by 2020 in Gurugram. Majority of which will be along the Golf Course Extension Road and certain parts of NH-8 micro markets. The Gold Course Extension Road has a significant pipeline of quality Grade A space, which is making it one of the highly preferred choice for the technology sector. A considerable proportion of the supply would be in the form of IT/ITeS SEZ developments.
Due to the limited supply in micro markets in Delhi and an availability of ample Grade An office supply in Gurugram’s micro markets, many office occupiers shifted their focus to Gurugram, especially the occupiers in the IT segment. In the first half of 2017, there was a gross absorption amounting to 1.7 million sq ft with technology, BFSI and telecom sectors being positioned at the forefront in terms of the leasing activity. According to the Colliers Research, the Golf Course Extension Road has begun to witness traction from several occupiers. The new supply in 2017 should keep the rent in check in peripheral and off CBD locations in Gurugram. While the low vacancy markets which include DLF Cyber City and Golf Course Road may witness a further upward pressure on the rest especially in the grade An office development. Despite the steady supply and high vacancy rates in Gurugram, the average rent increased by 0.9% in the second quarter of 2017 as compared to the first quarter of 2017. This was because of the fact that few premium office establishments demanded rentals over the market rate in different locations like Golf Course Road and DLF Cyber City.
Ascendas-Singbridge SEZ has a 0.5 million sq ft of supply under phase 1 and is likely to be completed by the end of 2017. Further, the 60 acre SEZ development near Sector 59 will add another 8 million sq ft of international standard business space. This SEZ supply is likely to attract large technology sector occupiers. Being close to Delhi, certain pockets of NH8 will also attract interest from the tenants and occupiers looking for real estate in terms of large contiguous floor plates, better planned amenities, scalability options, provision for car parking, etc. Upcoming projects like DLF Cyber Park has a state of the art admeasuring 2.5 million sq ft. It is witnessing a lot of interest from multinational office occupiers to pre commit space in lieu of their expansion needs. Similarly, Ambience Corporate Tower 2 admeasuring 1.2 million sq ft is operational and has witnessed a lot of traction from multinational occupiers like Mark it, Amazon, Panasonic in the recent past for similar reasons.
As per Colliers research report, the Gurugram office market is also witnessing a large amount of traction from coworking operators who accounted for a 20% share in the total leasing activity in the second quarter of 2017. GoWork opened a coworking space in Udyog Vihar recently and is scalable to more than 700,000 sq ft which indicates the robust market sentiments for flexible office spaces. The coworking spaces are popular among the small and medium scale technology driven firms. The research predicts that at the backdrop of upcoming supply infusion and increasing demand from technology, the leading momentum should improve in the coming quarters.