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1 Research & Forecast Report | April 2015 | Colliers
International
Absorption dips marginally by 6% QoQ but solid pipeline for
2QGurgaon commercial real estate market remained active in the
first quarter of 2015. The citys office absorption was recorded at
approximately 1.12 million sq ft, which is about 6% lower than that
of the previous quarter. IT/ITeS and BFSI with 47% and 25% share,
respectively were the prime contributors to this demand. Apart from
this, media and entertainment, manufacturing, pharma, FMCG and
engineering sectors also leased large office spaces during the
quarter. A few notable transactions this quarter were the 0.12
million sq ft office lease by Ernst & Young in Unitech Cyber
Park located at Sector 39, 0.10 million sq ft by Arvato in JMD
Megapolis located at Sector 48 and 0.08 million sq ft by Boston
Consulting in Bestech Business Park located on Sohna Road.
At the end of the quarter, the total available office supply
stood at 16 million sq ft. Areas with the highest available supply
were Golf Course Road Ext / Sohna Road (30%), Manesar (25%),
National Highway 8 (15%), Udyog Vihar and Industrial Sectors (14%)
and Golf Course Road (9%). The city witnessed the completion of
three small projects this quarter, namely, Spaze Palazo (0.25
million sq ft) by Spaze Group at Sector 69, JMD Empire (0.18
million sq ft) by JMD Group at Golf Course Extension Road and
Legends Heights (0.25 million sq ft) by ILD at National Highway 8.
Given the large vacant stock, developers continued to refrain from
adding speculative supply. Only Earth Group in collaboration with
AMB Group launched Earth SKY GATE at Sector 88. It is a mixed-use
development project of about 1.5 million sq ft, which will have
retail, commercial, bank space and restaurant components.
Research & Forecast Report
Gurgaon | OfficeApril 2015
Rental Values
*Indicative Grade A rents in INR per SF per month
MICRO MARKETS RENTALVALUE*% CHANGE
QoQ YoY
MG Road 100 - 145 0% 7%
DLF Cyber City (IT) 90 - 100 0% 20%
Golf Course Road 55 - 80 0% 17%
Institutional Sectors (Sec 44, 32, 18)
55 - 95 0% 20%
Golf Course Road Ext./Sohna Road
55 - 80 0% 17%
National Highway 8 50 - 150 0% 14%
Udyog Vihar & Industrial Sectors
30 - 45 0% -12%
Manesar 40 - 45 0% 4%
City Office Barometer
INDICATORS 1Q 2015 2Q 2015 F
Vacancy
Absorption
Construction
Rental Value
Capital Value
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2 Research & Forecast Report | April 2015 | Colliers
International
Rents and capital values in Gurgaon remained stable in 1Q 2015
across all the micro markets due to the large available supply and
low absorption witnessed during the quarter.
On the infrastructure front, the new state Government has
scrapped the decision to terminate the Kundli-Manesar-Palwal (KMP)
Expressway project, and instead has injected fresh funds to the
tune of INR 1,200 crores for completion of the project. Th is
project will be taken over by the Ministry of Transport from
Haryana Industrial and Infrastructure Development Corporation
(HSIIDC).
Colliers View
With the number of RFPs fl oating in the market, we anticipate
an increase in offi ce absorption in the near future. Th e Udyog
Vihar and Institutional sectors will continue to remain the most
preferred offi ce locations due to location advantages and
competitive rents. Rents are expected to remain on the same levels
due to the high vacancy levels and robust under-construction
developments in the pipeline, especially in micro markets, such as
the Southern Peripheral Road and Golf Course Extension Road, in the
coming quarters.
Top 5 Transactions of the Quarter
CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE
Ernst & Young Unitech Cyber Park 125,000 Sector 39 Lease
Boston Consulting Bestech Business Park 80,000 Sohna Road
Lease
Nagarro Tower of Arc 70,000 Udyog Vihar Lease
HSBC Plot No. 80 67,000 Udyog Vihar Lease
TCS Vatika Business Park 62,000 Sohna Road Lease
Quarter Wise Absorption
Average Rental And Capital Value Trend
100
140
120
8,000
10,000
14,000
12,000
6,000
4,000
2,000
0
80
60
40
20
0
0.40
0.80
1.20
1.60
2.00
0.00
1Q 2
013
2Q 2
013
3Q 2
013
4Q 2
013
1Q 2
014
2Q 2
014
3Q 2
014
4Q 2
014
1Q 2
015
Mill
ion
Sq.
ftRe
ntal
Val
ues
INR
Per
SF
Per
Mon
th
Capt
ial V
alue
s IN
R P
er S
F
Key Under Construction Projects
BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION
Business Club AIPL 700,000 Golf Course Extension Road 2015
Parsvnath IT Park Technicia Parsvnath Developers 695,000 Sohna
Road 2015
Unitech Infospace, Gurgaon Phase 2 Building 7
Unitech 450,000 NH-8 2015
Notes:
1. Offi ce Market: Th e 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 citys new offi ce destination.
2. Rents/Capital Value: Market average of indicative asking
price for Grade A offi ce space.
3. Available Supply: Total Grade A offi ce 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 fi gures in the report is based on market information
as on 25th March 2015.
Forecast
1Q 2
008
1Q 2
009
1Q 2
010
1Q 2
011
1Q 2
012
1Q 2
013
1Q 2
014
1Q 2
015
1Q 2
016F
1Q 2
017F
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