1 Research & Forecast Report | January 2015 | Colliers International

Recovery seems to be on cards with revived IT/ITeS demand The NOIDA office market seems to have entered recovery mode in the second half of 2014. Revived tenant demand from the IT/ITeS sector and other associated industries has resulted in an increase in office absorption towards the end of the year. In 2014, NOIDA recorded total office absorption of around 1.8 million sq ft compared to last year’s 2.28 million sq ft.

The city continues to be driven by back offices of medium-sized IT/ITeS companies that contributed 59% of the total office absorption, followed by BFSI 21% and engineering, media and entertainment 19%. Among the landmark deals concluded during the year, Samsung leased 0.15 million sq ft of Grade A office space in Okaya Building located at Sector 62. NEC HCL took 0.12 million sq ft in Logix Techno Park at Sector 127 and RDB Insurance took 0.10 million sq ft in building A-31 located at Sector 64. Private equity fund Blackstone’s acquisition of two commercial properties, 3C’s Ozone IT SEZ comprising of 1.5 million sq ft of built-up-area and IDFC owned Galaxy IT Park comprising of 1.3 million sq ft is viewed as a ratification of NOIDA as an important current and future IT destination.

This year, not many projects witnessed completion in NOIDA, and only 1.07 million sq ft of Grade A office space was added to the city’s total inventory. With approximately 19 million sq ft of office space at different levels of construction, developers refrained from launching more speculative supply.

The market witnessed 2% average increase YoY in rental

Research & Forecast Report

NOIDA | OfficeJanuary 2015

Rental Values

*Indicative Grade A rents in INR per sq ft per month**Sector 18***Sector 16A, 62, 125-142****Sector 124, 57-60, 63-75

MICRO MARKETS RENTALVALUE*

% CHANGEQoQ YoY

Commercial Sectors** 95 - 110 0% 0%

Institutional Sectors (Non IT)*** 50 - 100 -7% 0%

Institutional Sectors (IT)*** 30 - 75 5% 0%

Industrial Sector (IT)**** 18 - 50 5% 8%

City Office Barometer

INDICATORS 2014 2015

Vacancy

Absorption

Construction

Rental Value

Capital Value

2 Research & Forecast Report | January 2015 | Colliers International

values for Grade A office space across all the micro-markets. Capital values also increased by 3% YoY, indicating market revival.

In 3Q 2014, the local governing body approved the hike in circle rates by 2% for commercial properties, except for sectors 18 and 38A, where a 17% hike was approved. For institutional properties, the circle rates increased by 10%. On the contrary, the development authority gave a nod to the much needed mixed land-use policy that allows commercial activities in residential sectors. These commercial activities are allowed in residential areas having roads with width of 24 m or more. This is likely to stimulate further other real estate activities like construction of hospitals, banks, schools, ATM kiosks, guest houses and other business premises.

Trends to watch for in 2015:

In 2015, occupiers, especially from IT/ITeS, will remain as the prime drivers, similar to 2014. Approximately 10 million sq ft of grade A office space is at various stages of construction in NOIDA, which is expected to complete in next 3 years. However market is likely to see limited new supply in 2015 as developers will refrain completing project and adding more speculative supply until substantial leasing volumes return. The rents expected to increase marginally in medium term due to restricted new supply.

Source: Colliers International

Top 5 Transactions of 2014

Key Under Construction Projects

CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE

Samsung Okaya Building 150,000 Sector 62 Lease

NEC HCL Logix Techno Park 120,000 Sector 127 Lease

RDB Insurance Independent Building - A-31 108,000 Sector 64 Lease

Harris Broadcasting Correnthum 80,000 Sector 62 Sale

Mediatek SB Tower 68,000 Sector 16A Lease

BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION

Delhi One The 3C Company 2,000,000 DND Flyway 2015

Mist Avenue Bhasin Group 1,000,000 Sector 143 2015

I Thum Beaver International 500,000 Sector 62 2015

Average Rental And Capital Value Trend

70

90

80

8,000

10,000

16,000

14,000

12,000

6,000

4,000

2,000

0

60

50

40

30

10

20

0

Notes:

1. Office Market: NOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and125-142,

industrial sectors include Sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.

2. Rents/Capital Value: Market average of indicative asking price for Grade A office space.

3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.

4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.

5. All the figures in the report is based on market information as on 25th December 2014.

Forecast

New Supply (In Mln sqft) Absorption(In Mln sqft)

New Supply And Absorption Trends6

5

4

3

2

1

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2009

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2012

2013

2014

2015

2016

Rent

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R Pe

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ft P

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