“Tata Consultancy Services (TCS) has leased 400,000 square feet of office space in Noida due to increased demand. Delhi-NCR has seen the highest leasing activity, particularly in the flexible space sector. The supply of office space has increased, leading to a rise in vacancy rates. Large companies are driving this demand. Comments from Cushman & Wakefield are included. The IT-BPM sector has seen a high volume of activity“
Tata Consultancy Services (TCS), India’s largest IT company, has leased 400,000 square feet of office space in Noida, marking one of the largest office space deals in Delhi-NCR.
The space is located at Assotech Business Cresterra on the Noida expressway.
Return-to-office policies adopted by large companies are driving increased demand for high-quality office space, especially Grade A properties. IT companies, which traditionally require a lot of office space, are returning to office work, leading to an expected rise in demand for Grade A office space in the coming months, said Vibhor Jain, Managing Director, North India, Cushman & Wakefield.
Assotech Business Cresterra spans 2 million square feet, and this deal with TCS involves the last available building in the project.
Previously, Genpact and Celebal Technologies had also leased space at the same complex.
Delhi-NCR witnessed a gross leasing volume (GLV) of 3.7 million square feet during October–December, the highest volume recorded in 2023. The GLV was 10% higher quarter-on-quarter and slightly lower compared to the robust volumes seen in the same quarter last year, according to Cushman & Wakefield.
Most of this GLV comprised new space take-ups, accounting for 83%, followed by pre-commitments at 11%. Interestingly, the flexible space sector was the largest consumer of space in the fourth quarter, with a 24% share, surpassing the typically dominant IT-BPM sector, which had a 23% share in leasing.
Delhi-NCR also saw an influx of approximately 2.9 million square feet of new space in the quarter, bringing the total annual launches for 2023 to 4.9 million square feet. Due to the significant supply entering the market in Q4, which was nearly 1.2 times higher than the average of the past 6 quarters, the vacancy rate increased slightly by 50 basis points quarter-on-quarter.
There is a visibility of over 19 million square feet of new space coming up from 2024 until 2026, with nearly 44% of that in prime submarkets of Gurgaon and Noida. This is expected to push the vacancy rate higher, although strong demand is anticipated to mitigate this to some extent.
(Credits: ET Realty)
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