DLF Plans to Build an IT Complex and Data Centre in Noida at a Cost of INR 3400 Crore

1. Overview:

DLF, India's leading real estate firm, is set to invest Rs 3,400 crore in the DLF Techpark located in Sector 143, Noida.The facility spans 25 acres and can offer up to four million square feet (msf) of space.

2. Current Utilization:

Out of the potential four msf, 1.2 msf has been utilized for an IT block and data centers.

3. Location Benefits:

The Techpark is strategically located, being a 45-minute drive from the upcoming Noida International Airport and just 700 meters from the nearest metro station.

4. Pre-commitments:

The company has secured pre-commitments for 4.5 lakh sq ft in the first two structures in Noida, which include an IT block and a data center.The data center has been tailored for a specific client, while the IT block has seen about 70% commitments.The same data firm has shown interest in an additional 3.7 lakh sq ft, which is under construction.

5. Future Plans:

DLF has received increased inquiries for IT space, prompting them to consider further development in the area.The next development phase could offer up to two msf, based on market demand.Over the past 3-4 years, the National Capital Region (NCR) has seen a lease of 9-12 msf of commercial real estate. Gurugram dominated with 80%, followed by Noida at 19%, and Delhi covering the rest.

6. Market Dynamics:

Noida's commercial real estate hasn't grown as rapidly as Gurugram's. However, there's a rising interest from legal and IT firms, positioning the Noida Expressway as a potential growth hub.While Gurugram's demand stems from existing clients, Noida's demand is primarily from new customers.

7. Gurugram's Scenario:

In Gurugram, over two msf is operational with high-profile tenants. Another two msf tower is in the works, with 95% already committed.DLF has also introduced nearly three msf in Atrium Place in Gurugram.

8. GCC Growth:

Global capability centres (GCCs) are gaining momentum. These are offshore units of MNCs focusing on tech operations.DLF recently leased an under-construction asset in Gurugram, where 80% of the two msf is dedicated to GCCs.

9. Market Impact Post-COVID:

Post-COVID, many companies are relocating closer to talent pools, leading to a growth surge in the NCR.

10. Dollar Influence:

The dollar's appreciation has impacted commercial real estate leasing in India, causing a rise in commercial rentals.

11. SEZ Act Concerns:

Uncertainties surround the SEZ Act, especially after the 2022-2023 Budget announcement about its replacement. This has led to confusion among new customers and increased vacancies in SEZ areas.

Inference & Impact:

DLF's significant investment in Noida underscores the region's potential as a burgeoning IT and commercial hub. The strategic location, coupled with the upcoming Noida International Airport, positions the DLF Techpark as a prime real estate asset. However, the uncertainties surrounding the SEZ Act might pose challenges. Overall, DLF's move is a testament to Noida's growing importance in the NCR's commercial real estate landscape.