Compact office demand increasing in post-COVID scenario
As the population in Noida’s newer areas has grown, commercial and office space has become essential. Following residential acceptance, office spaces are gaining traction; the demand has grown as office spaces in East Delhi are nearly full and do not meet modern demands for ultra-tech and swanky offices. Demand is increasing, not just for larger spaces, but also for compact spaces that meet the needs of smaller businesses. The vicinity of Noida’s sector 129 has emerged as the place for the office segment. The places have been able to make a point because of the improved connectivity in the last few years thanks to a lot of infrastructural developments.
Overall, the office real estate market is thriving, with demand for Grade A office space skyrocketing and vacancy rates in prime locations falling. The demand metrics for the office leasing segment of the commercial real estate market had remained stable. “Companies have continued to concentrate on employee well-being as a result of the growing Covid-19 second wave around the country; the increased sense of obligation has meant that offices which were working from cramped spaces in city centers would search for compact offices in plush locations and buildings in NCR,” says Deepak Kapoor, Director, Gulshan.
After COVID, many companies decided to distribute a number of employees in one office to many offices, which has helped them expand their reach. Giving more insight, Yukti Nagpal, Director, Gulshan says, “The amount of lease retention in properties that are already operational has largely followed past trends. However, some corporate office occupants are downsizing their space needs, resulting in a demand for compact offices. The demand-supply gap could temporarily expand due to a steady pipeline of assets becoming operational in the near future.”
Although some large-scale leasing deals have been announced, the volumes may not be sufficient to cover the rise in completed stock from the larger organized developers. Nonetheless, long-term demand prospects for the sector appear favorable, given that Covid-19 has had no material market effect on the large occupier base in such properties. “Over the medium to long term, a return to earlier levels of demand will rebalance the current demand-supply mismatch.
Talking of Noida, the office developments cannot sustain if not supported by infrastructure projects. Overall, Noida is expected to witness healthy investment in infrastructural projects. Noida is also changing day by day, as it has designated commercial and residential areas, giving residents a sense of planned growth. The aspect of transportation has also been taken care of with Metro connectivity. “In response to demand, developers created commercial hubs with dedicated office spaces as an alternative for people who worked from home or in a shopping center. The minimum area for office space begins at 300 square feet, giving start-ups and entrepreneurs with small budgets a choice,” says Mr. Kapoor.
Interior designers, chartered accountants, travel agents, insurance agents, bank DSAs, attorneys, architects, and property brokers are among the industries that profit from these choices. With so many infrastructures planned and so many people moving to these areas, compact commercial office real estate is expected to expand by leaps and bounds. The rentals for office spaces are in the range of Rs 40-75 per sqft depending on the size & location.
“The abundance of options in these areas has aided these individuals in moving their operations from their homes or unlicensed buildings to swank office environments. These office spaces are built to meet the growing demand for high-quality work environments due to the amount of time people spend in offices, as well as to make a good impression on their clients/customers,” says Yukti Nagpal.