Gurgaon continues to dominate as a corporate hub with increased investments in real estate by institutional investors and developers, according to a recent CBRE report.
With presence and availability of high quality gated residential communities and stagnation in Delhi's urban development environment has resulted in over 70% of office leasing making Gurgaon, the new Central Business District for the national capital region (NCR).
Over the past 3 years, while Noida transacted between 1-1.5 million square feet of gross leasing annually, Delhi was even lower at an average of 800,000 sq ft. Gurgaon in comparison was far ahead with an average gross leasing of 5.5 million sq ft annually with last year clocking a high of 7 million sq ft commanding a 70% share of office leasing in NCR.
This is driving significant institutional interest (as well as investment commitments) to capture the growth wave of increasing lease rents and high sale prices. Further, increase in such demand is further leading to an increase in working population thereby generating additional demand for housing in Gurgaon.
"Gurgaon has superior social infrastructure compared to all other locations of NCR, including Delhi. Its physical infrastructure has got a boost via connectivity with Delhi Metro and its own city level Rapid Metro. The presence of almost all the top Indian and MNC corporate offices in the city provides it with a large pool of affluent residents who contribute to growth of its economy, augmenting the growth of residential projects suitable for high ranking professionals." Said Ashish Jerath, Head of Sales, Emaar MGF.
With over one billion dollar of investments by way of land acquisition and financing in 2106, the overall long term outlook is bullish with commercial office markets in overdrive and emerging areas of Gurgaon offering excellent residential development opportunities. While prime areas of Gurgaon such as Golf Course Road and MG Road are saturated and considered expensive for residential space, emerging areas such as Golf Course Extension, Dwarka Expressway and New Gurgaon offer multiple development opportunities tapping demand from first home buyers as well as investors.
"These micro-markets like MG Road are already nearing their saturation in terms of space availability, and also due to the premium pricing tag commanded here. This has led to the emergence of new luxury hotspots such as the Golf Course Extension Road and upcoming areas like the Dwarka Expressway and New Gurgaon markets. The price curve here is becoming positive since the start of 2016, driven primarily by ready-to-move-in properties on offer", adds Jerath.
In addition to bullish investors, prominent international developers from China and other neighboring countries are evaluating Gurgaon as their first market for investment. Reputed developers have joined hands with strong institutional investors to actively acquire strategic land positions within emerging areas of Gurgaon, which is a clear indicator of the expected long term dividends.
"Investments by institutional investors and developers alike show enhanced confidence in Gurgaon's future. Future ready trunk infrastructure such as roads, power and water; ready social infrastructure clubbed with affordability has been the key driving factors of the region," said Anshuman Magazine, Chairman - India and South East Asia, CBRE.
BW Reporters
Naina Sood is a Economics graduate and has done her post graduation in International economics and Trade. She has deep interests in Indian economy and reforms
