15th June, 2023 - Property Market Wrap - Gurgaon May, 2023

May saw traction in both office leasing markets and also residential sales.

Velocity in office space leasing held strong as deals were signed in extension, Udyog, MG and Golf Course Road.

There is now upward pressure on market rents as business expansion occurs in India from both MNC & Indian companies.

Deals signed in Gurgaon varied from 20000 sft – 2 lac sft across submarkets in what is healthy absorption numbers. Demand side varied from IT, Manufacturing, FMCG cos and consultancy cos.

Supply side pressures on office space occurred in prime CBD as we see tightening of new launch space and limited land parcels in the city.

Innovative lease terms were signed from bare shell to fitted out space with longer

lock-ins for fitted out premises of course. As a general trend market lock-ins

are up over the last month. We see a steady pipeline of demand hit deal tables

as SBD space gets mopped up.

Gurgaon Grade A space showed incremental rents to the tune of 10% in our latest report yoy. Most deals occurred on bare shell. Escalation

in old leases is back in vogue covering pandemic blues for the office space

sector. Large deals are being scouted by MNC and Indian companies with an

impetus to raise headcount in the North particularly Gurgaon and Delhi.

With office supply expected to decline visa via greater absorption rates in the next 2-3 quarters and the hold on new pipelines with not much supply addition in prime office space, rents expected to rise by as much as 10-15% by end 23-24 FY.

Residential resales counted greater number this quarter visa vi the last. primary sales showed slight dip in volumes but pricing remains buoyant.

NRI investments into both commercial office and residential has hit good ticket sizes. There is a demand for larger units. Residential rents escalated by 5% over the last month and a half period.

Deals signed at premium end happened at world spa, vilas, ivy and laburnum to name a few.

Retail space saw some top notch brands renew leases at escalated rentals beyond lock-ins. Most areas in Gurgaon are catchment driven by local traffic in the area.

A word in on institutional investment, funds continue to look for both core assets prime and SBD, and land for JV developments.

There is synchronous movements of office space expansion & relocation, residential movements and retail locations picking up sales.

All in all a thumb up for May for deal action in Gurgaon, India.