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News & Views on Indian Real Estate

Thursday, June 05, 2008

Squeeze on Tech Firms could pull down IT Office Rentals in NCR

An anticipated oversupply in information technology or IT office market is, expected to push down rentals of these buildings in the National Capital Region (NCR), which includes Delhi and its environs. The US is still the largest market for Indian information technology companies contributing to as much as 45% to the total IT and back office services outsourcing business in India. The demand for IT office space may come under pressure due to a slowdown in outsourcing from US companies. This could lead to an oversupply in such space in Gurgaon and Noida in NCR. Interestingly, while IT office building rentals are expected to come down, non-IT office buildings in Delhi and its suburbs command higher rentals, because of a lack of supply. Non-IT office rentals have also been growing at a faster pace than IT office rentals. Over the past six years, rentals have been growing at 9.4% and 16.5% for IT and non-IT office space, respectively. This is largely on account of the significant increase in IT office space over the past several years. The sealing of illegal buildings in Delhi has also created a shortage in the non-IT office space in Delhi and its environs. Hence, developers who have gone ahead and built non-IT office space will benefit from the rising rentals and high occupancy rates in the non-IT office market.

Anonymous said...

Yes because lot of rent is the main problem in Delhi,NCR area because if more than the actual value of land is not able to pay the every company.

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