TCS Leases Four Lakh Sq ft Office Space in Noida
Tata Consultancy Services (TCS), India’s largest IT company, has recently leased 400,000 square feet of office space in Noida, making it one of the biggest office space transactions in the Delhi-NCR region. The company secured the space at Assotech Business Cresterra on the Noida expressway. The demand for high-quality office space has been evident due to return-to-office policies implemented by large corporations, highlighting the need for Grade A properties. As companies begin to bring employees back to the office, there is an expected increase in demand for such office spaces in the coming quarters.
Delhi-NCR Records Highest Leasing Volume, Flex Space Sector Takes the Lead
According to Cushman & Wakefield, during October-December, Delhi-NCR witnessed gross leasing volume (GLV) of 3.7 million square feet, the highest volume recorded in 2023. The GLV in this quarter was 10% higher compared to the last quarter and slightly lower than the significant volumes recorded in the same quarter last year. The majority of this GLV consisted of new space take-up, accounting for 83% of the total volume. Additionally, the flex space sector took the lead in occupying space with a 24% share, beating the IT-BPM sector, which traditionally dominates the office space needs.
Supply Increases, Vacancy Rate Rises
Delhi-NCR received approximately 2.9 million square feet of influx in the last quarter, bringing the total annual launches for 2023 to 4.9 million square feet. The heavy supply entering the city in Q4, nearly 1.2 times higher than the average of the past 6 quarters, has caused the vacancy rate to increase slightly by 50 basis points on a quarter-on-quarter basis. The increase in supply is a significant factor contributing to the rise in vacancy rates.
Visible Supply and Forecasted Demand
Looking ahead, there is visibility of over 19 million square feet of supply expected to come up from 2024 until 2026. Around 44% of this supply is concentrated in prime submarkets like Gurgaon and Noida. While the increased supply may lead to higher vacancy rates, the strong demand from companies is anticipated to act as a counterforce to some extent. The forecasted demand reflects the overall positive outlook for the office space sector in Delhi-NCR. In conclusion, Tata Consultancy Services’ lease of four lakh sq ft office space in Noida indicates the renewed demand for high-quality office spaces in the Delhi-NCR region. The rise in gross leasing volume, led by the flex space sector, showcases the evolving changes and preferences in the industry. However, the increase in supply also contributes to a slight rise in the vacancy rate. Despite this, the forecasted demand and visible supply point towards a favorable future for the office space market in Delhi-NCR.
