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1 Research & Forecast Report | January 2015 | Colliers International

Absorption dippedby 13% YoY in2014 but goodprospects for 2015Gurgaon remained the most active and preferred market

in 2014 among corporate occupiers in the NCR region.

Te satellite city shared about 67% of overall absorption in

NCR. Gurgaon recorded leasing volumes of 4.73 million

sq ft in 2014, which is approximately 13% less than the

previous year’s absorption of 5.47 million sq ft. I/IeS was

the primary contributor of this demand, followed by the

BFSI and logistics sectors. Te share of the I/IeS sector

has further increased to 62% of the total absorption this

 year. Last year, I/IeS accounted for only 53% of the total

absorption.

Due to its connectivity advantages and affordable rents,

NH8 remained the most preferred location and accounted

for 31% of the total absorption followed by Institutional

Sectors (16%) and Udyog Vihar (14%).

 With the overall cautious market sentiments during the year,

developers had deferred constructing new office space.

 As a result, new supply in 2014 was 3.2 million sq ft, down

from 4.53 million sq ft in 2013. Te city is expected to see

completion of about 3.5 million sq ft of new office space

in 2015 as developers are expected to focus on completing

their existing projects, especially those with ready

structures.

More than 16.8 million sq ft of office space is available

for lease in the Gurgaon market, of which about 37% is

located in the Golf Course Road Extension and Sohna Road,followed by NH8 (19%), Udyog Vihar (18%) and Golf Course

Road (12%). Vacancy is expected to remain stable in 2015 as

developers will remain cautious in adding more speculative

Research &Forecast Report

Gurgaon | OceJanuary 2015

Rental Values

*Indicative Grade A rents in INR per sq ft per month

MICRO MARKETS  RENTAL

VALUE*

% CHANGE

QoQ YoY

MG Road 90 - 140 2% -2%

DLF Cyber City (IT) 85 - 90 4% 11%

Golf Course Road 85 - 140 0% 0%

Institutional Sectors(Sec 44, 32, 18)

55 - 95 0% 0%

Golf Course RoadExt./Sohna Road

55 - 75 4% 15%

National Highway 8 50 - 150 5% 14%Udyog Vihar &Industrial Sectors

35 - 50 0% -11%

Manesar 40 - 42 9% 0%

City Ofce Barometer

INDICATORS 2014 2015

Vacancy

Absorption

Construction

Rental Value

Capital Value

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2 Research & Forecast Report | January 2015 | Colliers International

supply in view of current vacancy levels.

Office rents witnessed an average increase of about 6%

 YoY across the micro-markets. A few locations, such as

Institutional Sectors, Golf Course Road, Sohna Road and

National Highway 8 recorded increases in the range of 10 to

15%, while Udyog Vihar and Industrial Sector witnessed an

annual decrease of about 11%.

Te city lacks basic infrastructure and has not witnessed

any improvement in 2014 either. However, a few projects,

such as the Rapid Metro project by DLF and the Subhash

Chowk Flyover, have picked up pace and are expected to be

completed by 2016. Gurgaon District Administration has

revised the circle rate in its five zones, Gurgaon, Manesar,

Sohna, Farukhnagar and Pataudi, on an average by 15%.

rends to watch for in 2015:

Gurgaon will remain the preferred office destination in NCR.

Te leasing profile will be dominated by corporate offices

of large I/IeS companies. As business confidence in the

economy picks up, we expect these tenants to commit to

large office spaces, especially in Special Economic Zones.

Supply demand equilibrium will keep rents in check in

peripheral locations; however, rents in micro-markets

like Cyber City, Udyog Vihar and NH8 will continue to

strengthen further. Golf Course Road and its Extension

Road are positioning themselves as significant future

development destinations with large upcoming supply.

However, the development of Golf Course Road and Golf

Course Extension Road will be tied to Metro projects and 16

lane highway which are set to serve this market by 2016.

Top 5 Transactions of 2014

Key Under Construction Projects

CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE

Aricent Unitech Infospace   550,000 Sector 21, Dundahera Lease

TCS Hines Skyview Tower   450,000 National Highway 8 Lease

WNS DLF Silokhera   145,000 National Highway 8 Lease

Accenture Unitech Infospace   120,986 Sector 21, Dundahera Lease

Copal PartnersIndependent Building -

Plot 267  120,000 Udyog Vihar Lease

BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION

Business Club AIPL Group   700,000Golf Course Extension

Road  2015

Parsvnath IT Park Technicia Parsvnath Developers   695,000 Sohna Road 2015

Unitech Infospace, Phase 2

Building 7Unitech Developers   450,000 National Highway 8   2015

Average Rental And Capital Value Trend

100

120

140

8,000

10,000

14,000

12,000

6,000

4,000

2,000

0

80

60

40

20

0

Source: Colliers International

Notes:

1. Office Market: Te 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 city’s new office destination.

2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.3. Available Supply: otal Grade A office 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 figures in the report is based on market information as on 25th December 2014.

Forecast

New Supply (In Mln sqft) Absorpt ion(In Mln sqft)

New Supply And Absorption Trends

6

5

4

3

2

1

0

2010 2011 2012 2013 2014 2015F 2016F

        2        0        0        8

        2        0        0        9

        2        0        1        0

        2        0        1        1

        2        0        1        2

        2        0        1        3

        2        0        1        4

        2        0        1        5

        2        0        1        6

   R  e  n   t  a   l   V  a   l  u  e  s   I   N   R

   P  e  r  s  q   f   t   P  e  r

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   C  a  p   i   t  a   l   V  a   l  u  e  s   I   N   R

   P  e  r  s  q

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