Pace City Sector 37 Gurgaon: Office Space for Rent

Office space for rent in Pace City, Sector 37 Gurgaon runs at roughly Rs 12 to Rs 40 per sq ft a month — somewhere between a sixth and half of what the same phrase buys anywhere else in the city. That is not a bargain anyone has missed. It is the price of a different kind of property, and this page is mostly about what that difference costs you.

At a glance

Pace City is an industrial estate, not an office district

Pace City 1 and Pace City 2 sit at Sector 37 as an HSIIDC industrial estate — the Haryana State Industrial and Infrastructure Development Corporation still runs e-auctions of industrial plots here. What is let as "office space" is, in the great majority of cases, floor space inside an industrial building: sheds, independent factory blocks, and upper floors above a working unit.

Some of it is genuinely good space. One building here is marketed explicitly at IT, BPO, KPO and multinational occupiers, on a 1,000 sq m plot with about 27,000 sq ft built up. But the land underneath is industrial land, and that fact governs everything that follows.

The rents, and what they actually are

Two things fall out of that table. The rate rises as the unit gets smaller and more finished, which is the ordinary shape of any market. And the top of this range, Rs 40 for a whole building fitted for offices, is below the bottom of what a plain commercial building fetches elsewhere in Gurugram.

Set it against this site's own research on the rest of the city. A building off NH-8 lets at about Rs 70 per sq ft a month. Mixed retail-and-office space on Sohna Road runs Rs 33 to Rs 70. The institutional end at DLF Cyber City is Rs 135 to Rs 160. Pace City at Rs 12 to Rs 40 is not competing with any of them. It is a different product with a different buyer.

The question that decides whether you can sign

An HSIIDC plot is allotted for industrial use, on conditions. Using it as a commercial office is not automatically permitted, and the machinery for changing that is real and slow: Haryana grants change of land use under the Punjab Scheduled Roads and Controlled Areas Act of 1963, on form CLU-I to the Director, with scrutiny fees set at Rs 2 per sq metre for industrial and recreational use and Rs 10 per sq metre for everything else. The state has separately allowed conversion of industrial plots to non-industrial use in estates developed before that Act — which tells you the default is the other way.

Alongside that sits HSIIDC's own estate management procedure, which governs allotment, leasing, transfer and — the word that matters — resumption. A plot held in breach of its allotment conditions can be resumed. Your lease is only as good as the landlord's own title to be letting it to you for the use you intend.

So before anything else, establish three things in writing:

1. What the plot is allotted for. Ask for the HSIIDC allotment letter and the current conditions, not a summary of them.
2. Whether your use is permitted on it. A software team is not a manufacturing unit. If a change of land use or an estate permission is required, find out whether it has actually been obtained, or whether you are being asked to occupy on the assumption that nobody will look.
3. Whether the allotment is in good standing. Dues paid, conditions met, no resumption notice outstanding.

If the landlord cannot produce those, the Rs 12 is not a rate, it is a risk premium — and it is being paid by you, not by them.

What the capital side says

The sale evidence here is thin and inconsistent, which is itself worth knowing. A Pace City 2 building on a 2,100 sq m plot with about 52,000 sq ft built up is quoted at Rs 16 crore, which is roughly Rs 3,077 per sq ft of built-up area. A much smaller 3,000 sq ft factory unit is quoted at Rs 2.80 crore, which would be about Rs 9,333 per sq ft — three times the rate. Those two cannot both be describing the same thing, and the likeliest explanation is that the smaller quote is priced on its land rather than its shed.

Take the Rs 3,077 as the workable number and put the rents against it:

Those are large numbers by Gurugram standards — Golf Course Extension pays 6.5 to 8.7 per cent and the prime districts compress to 5 or 6. A yield of 15 per cent is not the market being generous. It is the market pricing industrial land-use risk, a narrow tenant pool, a building that will not re-let to a corporate occupier, and an exit that depends on finding another industrial buyer. The yield is the compensation, and it is roughly the right size for what is being compensated.

Who this genuinely suits

Written plainly, because the low rate will attract people it does not suit:

• It works for back-office, warehousing-with-admin, testing labs, data and hardware operations, service workshops, and anything where floor area matters more than address.
• It works for a growing company that needs 20,000 sq ft now and cannot pay Rs 70 for it.
• It does not work for client-facing offices. Nobody's investor is visiting a factory block at Sector 37.
• It does not work if you need certainty of tenure. The land-use question does not go away because a lease has been signed.
• It does not work for a landlord-quality covenant. You are dealing with small industrial owners, and your deposit is with them.

Frequently asked questions

What is the office rent in Pace City, Sector 37 Gurgaon?

Roughly Rs 12 to Rs 40 per sq ft a month. The published quotes run from Rs 90,000 for 7,500 sq ft in Pace City 1, which is about Rs 12, up to about Rs 40 for a whole independent building fitted for office use. Industrial sheds and factory units in between sit at about Rs 19 to Rs 36. The spread is mostly the size and the finish of the unit.

Why is it so much cheaper than the rest of Gurgaon?

Because it is not the same product. Pace City is an HSIIDC industrial estate, so what is offered as office space is usually floor area inside an industrial building. A building off NH-8 lets at about Rs 70 per sq ft a month and DLF Cyber City at Rs 135 to Rs 160. Pace City is not a discounted version of those, it is a different market with a different tenant and a different land use.

Can I legally run an office from an industrial plot here?

Not automatically. HSIIDC plots are allotted for industrial use on conditions, and non-industrial use may require a change of land use, which Haryana grants under the Punjab Scheduled Roads and Controlled Areas Act of 1963 on form CLU-I. HSIIDC's own estate management rules also provide for resumption of plots held in breach of allotment conditions, so the rules are not decorative. Ask for the allotment letter, ask whether your use is permitted on that plot, and ask whether the allotment is in good standing — before you pay a deposit.

What is industrial property worth to buy in Pace City?

The workable figure is about Rs 3,077 per sq ft of built-up area, from a Pace City 2 building on a 2,100 sq m plot with roughly 52,000 sq ft built up, quoted at Rs 16 crore. A small 3,000 sq ft factory unit is quoted at Rs 2.80 crore, which implies about Rs 9,333 per sq ft — three times as much, and almost certainly priced on the land rather than the shed. Do not average the two.

What yield does an industrial building here produce?

A rental yield here is unusually high. On Rs 3,077 per sq ft, a rent of Rs 19 is about 7.4 percent gross, Rs 28 about 10.9 per cent and Rs 40 about 15.6 per cent. Those look generous against Golf Course Extension at 6.5 to 8.7 per cent and the prime districts at 5 to 6, and the gap is the point: it is paying you for land-use risk, a narrow tenant pool and a harder exit. Treat the yield as the price of those risks rather than as free money.

Is Pace City suitable for a client-facing office?

Realistically, no. It suits back-office work, labs, warehousing with an admin function, workshops and hardware operations — anything where floor area matters more than address. If clients or investors will visit, the saving on rent will cost you more than it saves.