Have you considered reviewing your commercial office space lease lately? Now may be a good time!

Real estate costs for any commercial establishment could be a pain given that in certain cases, the rentals go as high as 25% (usually between 9-15%) of the operating expense, and yet the discussion about saving a lot of potential money does not live for more than a few weeks after the yearly P&L review where in most cases, the rental cost is highlighted in red.

If your company has an existing lease with less than a year term remaining, this may be just the right time to either renegotiate it with the current land lord or start looking out for better options that could save money for the company and also increase productivity in certain cases (consolidation). This write up gives you a snap shot of what the current emerging commercial real estate market in Delhi NCR looks like and also in the wake of the recent trend of companies acquiring and doing consolidation of multiple facilities. Many MNC’s that are operating out of multiple offices in the same geographical zone and are anticipating a frantic growth, have done strategic consolidation and moved to upcoming cost effective commercial hubs that are coming up throughout the national capital territory to save money for the company on a long term basis.

Big companies like Pepsi, Yatra dot com, Aircel, E&Y, Sumitomo, HDFC bank, XL capital, UHG, Ingersoll Rand, Mercer, Capgemini, were front runners in taking up commercial space in Delhi NCR in the previous couple of years.

With ever changing quick financial and technological trends the market out there is fairly competitive for SME’s as well as large corporate, to be able to survive and excel in this scenario, it is not only important to keep a tab on everything that’s transpiring in the market by the minute, but also to focus on maximizing the revenue and cutting on the costs where ever possible. And, low Real Estate costs are a significant factor in increasing the operating profit of any successful business.

The last 5-10 years have been quite transforming for the Delhi NCT area. An all around infrastructural development model including metro network, widening of major highways and notification of master plan 2021 Delhi, the landscape of NCR has changed for better and given way to several upcoming cost effective business hubs. Most of these locations present a compelling argument to any company to re evaluate their current lease or even if any company is looking at expanding or consolidating.

Major upcoming business hubs in Delhi NCT area

Land Use Location Rent Range
Gurgaon Commercial MG road, Golf Course Road, GC ext Road, Sohna Road Rs 45 to Rs 110/sq ft
Gurgaon Institutional, ITES and IT Sector 32, 44, DLF cybercity, NH8, Infocity, Sohna road, GC road Rs 35 to Rs 85/sq ft 
Gurgaon Industrial areas  Udyog Vihar, Sector 18, Pacecity, Sec 33, 34, Infocity  Rs 25 to Rs 50/sq ft
 Delhi Commercial Dwarka, Sadar, Netaji Subhash Place, Jasola, Mayur Vihar, Vikaspuri, Piragarhi, Moti Nagar, Aerocity,  Rs 50 to Rs 100/ sq ft
 Delhi Institutional ITES  Vasant Kunj, Qutub Institutional area, Mohan C area, Janakpuri, Tuglakabad, Rohini Rs 60 to 140/sq ft
 Delhi Industrial  Moti Nagar, Kirti Nagar, Bawana, Patpatgunj, Okhla, Kanjhawala, Naraina,  Rs 25 to Rs 60/sq ft 
 Noida Commercial  Sector 18 Atta, Sec 2, 3,4,5,6, sector 63,61, 25  Rs 30 to Rs 70/sq ft 
 Noida Institutional ITES and IT  Sector 62, sec 16, 63, 125  Rs 20 to Rs 45/sq ft
 Noida Industrial  Sector 63, 83, 80, 65, Hosiery Complex  Rs 15 to Rs 25/ sq ft

 

Strategies to save the Costs and increase efficiency:

v  Do an internal review of space standard for each hierarchy level, with open work space culture; you may be surprised how much you could save by cutting on those huge cabins.

v  Look out for cost effective business destination options across the region to do a commuting time/hours analysis and improve operational efficiency.

v  Watch out if you are paying a fortune for those “A” grades buildings in maintenance bills and have relatively less usable area.

v  Consolidate offices at multiple locations within the same region under at one centralized and well connected location.

With FDI in retail opening up and governments liberal policy for investment in various other sectors, the commercial real estate market in Delhi NCR is fraught with a lot of enthusiasm, and this has been met with a spike in rentals of the existing main hubs of Delhi NCR like Connaught place, Saket, Bhikaji, Nehru Place, GK, ATTA, MG Rd, South Ext, Laxmi Nagar, Khan Market, Amidst the saturated main hubs, emerging destinations not only provide extremely low rentals but will also morph into the main hubs of global brands in the days to come!.

Values mentioned in the table above, for the most part, don’t count for RETAIL rates!