Noida, India – Real estate giant DLF is embarking on a substantial investment of Rs 3,400 crore in phases to develop the DLF Techpark in Sector 143, Noida. This expansive project, spanning 25 acres, has the potential to create nearly four million square feet of commercial space. Approximately 1.2 million square feet of this space is currently in use, accommodating both an IT block and data centers, according to a senior official from the company.
Situated just a 45-minute drive from the upcoming Noida International Airport and a mere 700 meters from the nearest metro station, the DLF Techpark offers a prime location for businesses.
The initial two structures within the Noida complex have already garnered pre-commitments of 4.5 lakh square feet. These structures include a data center and an IT block totaling around four lakh square feet. Additionally, the data center has been tailor-made to suit the requirements of a specific client, while the IT block has already secured nearly 70 percent of its available space commitments. The Noida data center has also received further commitments from the same data firm for another 3.7 lakh square feet, which is currently under construction.
Karun Varma, Senior Executive Director of North Offices Business at DLF, stated, “We have recently received inquiries for more IT space in the area, and that encourages us to plan for the next phase there. Out of the 1.15 million square feet that has already been constructed as part of the first phase, one million square feet has already been committed by clients.”
The second phase of development, expected to be close to two million square feet, will be contingent on market demand. Varma emphasized, “We are studying the market and also looking at the next phase of development, which is expected to be between one and two million square feet depending on the demand.”
While the Gurugram market has dominated commercial real estate take-up in the National Capital Region (NCR), with almost 80 percent of the leased space, Noida is now emerging as a promising growth corridor. Varma noted that there is increasing interest from legal firms and IT companies, predicting that Noida Expressway will become the next focal point for commercial development.
Regarding client preferences, Varma explained that demand in Gurugram primarily stems from existing clients, whereas Noida attracts new customers. He noted that new customers have shown a keen interest in commercial real estate space in Noida, unlike Gurugram, where both existing and new clients occupy A Grade spaces in new properties.
In Gurugram’s Downtown project, more than two million square feet is already operational and occupied by prominent tenants. An additional tower, spanning two million square feet, is currently under development, with 95 percent of the space already committed. This project is set to launch in the first quarter of 2025, comprising over eight million square feet of space, including a mall and office spaces.
DLF has also introduced close to three million square feet of commercial space in Atrium Place in Gurugram.
Varma highlighted the growing importance of global capability centers (GCCs), which are offshore units of large multinational corporations performing technology operations. He mentioned that DLF recently leased an under-construction asset in Gurugram, with 80 percent of the space designated for GCCs. This space is expected to be ready for fit-outs in 15 to 16 months, and the GCC trend is anticipated to continue for IT providers.
The appreciation of the dollar has influenced commercial real estate leasing in India, resulting in increased rental rates. While Gurugram commands rents ranging from Rs 70 per square foot to Rs 150 per square foot for A Grade commercial space within its 85 million square feet of commercial stock, Noida’s rental rates are between Rs 50 and Rs 60 per square foot.
Regarding the impact of the Special Economic Zones Act 2005 being replaced with the Development of Enterprise and Service Hubs (DESH) Bill, Varma noted that there is some uncertainty among new customers about the advantages of working in an SEZ versus a non-SEZ. Vacancies in SEZs may take longer to return to pre-COVID levels, which could now be in double digits. However, he expressed hope that the Ministry of Commerce, the Department of Revenue, and the Ministry of Finance would soon issue a gazette notification for floor-wise denotification for IT SEZs, which could boost uptake in this segment.