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.
riathareja
riathareja
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