A surprising number of foreign companies make their first and most expensive India mistake before they've hired a single person: they sign a commercial lease in Gurgaon or Noida to "have a base" and only work out whether the market, the talent, and the delivery model actually fit their business after the ink is dry.
The hidden costs nobody quotes upfront
Commercial real estate in NCR runs on a set of local norms that are easy to miss if you're negotiating from outside the market:
- Broker commissions and quiet kickbacks. Local brokers are frequently paid by the landlord as well as by you, and the property they steer you toward isn't always the best available option — it's often the one paying the broker the most.
- "Fit-out" costs quoted separately, then inflated. The headline rent looks reasonable until electrical work, HVAC, cabling, and furnishing come back as a second, much larger invoice — often from a contractor connected to the same broker or landlord.
- Long lock-in periods signed before you know anything. Three-to-nine-year lock-ins are common in Grade A commercial buildings, and they're frequently signed in the first few months a foreign company is in-market, before anyone knows whether the hiring plan, the team size, or even the city is right.
- Security deposits of six to ten months' rent, tied up for the full lease term regardless of whether your headcount plans change.
- Vague CAM (common area maintenance) charges and power backup fees that aren't in the headline rent and can add a meaningful percentage on top every month.
Why this happens to foreign companies specifically
None of this is unique to India — every commercial real estate market has local norms that outsiders don't know to negotiate against. The difference is that a foreign company setting up its first India office usually has no one on the ground checking the lease against what a comparable local company would actually pay, so the markups go unquestioned.
The street-smart move
Don't sign a multi-year lease to validate a market you haven't tested yet. Start with plug-and-play dedicated seats in an existing, already-fitted-out office — no broker commission stacked into your rent, no separate fit-out invoice, no lock-in longer than your actual commitment. That's the model behind our own space at Spaze iTech Park in Gurgaon: dedicated developer seats you can scale up or down as the team grows, without the real estate risk of committing to your own office before you know India is the right long-term base.
Once you've proven the model — the team performs, the delivery works, the cost math holds up — that's the right time to evaluate your own entity and your own lease, negotiated with someone who already knows what a fair NCR commercial deal looks like. Getting the sequencing right saves most companies six figures in wasted real estate spend before their first engineer is even hired.
