Noida and Greater Noida continue to see expansion in office space absorption, despite issues of connectivity and uninterrupted power supply.
Many IT companies find value in expanding back-end operations in the twin cities as rentals are still much lower than Gurgaon.
Analysts say despite a slight increase in rates over the past two years, office space rentals in Noida and Greater Noida hover between Rs 50 and Rs 55 per sq ft (psf), which are at least Rs 20 psf cheaper than the Millennium City. In comparison, office spaces in Gurgaon command rentals of Rs 70 to Rs 75 psf.
3 Pillar Global, a USA-based IT company, plans to expand its Noida offices from 300 to 450 seats over the next one year.
“Noida is convenient for us. Being a relatively new company, we keep our costs low and in Noida, we get good talent and adequate space to do our work. We are looking at a 50% increase in workforce over the next 12 months, all in Noida,” Maria C Izurieta, CFO, 3 Pillar Global, told TOI.
In another instance, a tech-based customer relationship management (CRM) company, SalezShark, has shifted its corporate office from Gurgaon to Noida recently, because of low rentals and cheaper input costs.
“Initially, we had our back-end tech division in Noida, the corporate office was in Gurugram. But finally we decided to shift to Sector 132 some months ago as the rent was reasonably low and we could bridge connectivity issues by providing pick-up and drop facilities for our employees from the nearest Metro station,” said Ajay Chauhan, co-founder, SalezShark.
“So both our technology development section and corporate office are now in Noida. At a lower rent, we now have a better workplace in Noida than Gurgaon,” he added.
Another reason for companies shifting to Noida is the availability of inventory, say analysts. “Noida has a lot of supply of office spaces, so companies can easily plan expansion here. In October-November-December 2016, the office space absorption was 4,50,000 sq ft. In January-February 2017 alone, Noida has covered 3,50,000 sq ft office space absorption. This is a good sign for Noida,” said Surabhi Arora, senior associate director (research) of Colliers International-India, an international real estate research group.
“We see office space absorption in Noida expanding further as most companies would locate their research and development sections here, even if they retain corporate offices in Gurugram. It works for employers as talent cost is low in Noida as is cost of living,” she added.
SOURCE – HINDUSTAN TIMES