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ITs and ITeS looking for a new address
With Indian real estate values witnessing a major correction, industrial hubs across the country are turning into new IT & ITeS destinations. The markets witnessing such a shift include NCR, Bangalore, Mumbai, Chennai and Pune. Many of these markets are offering 25-40% less rental values and that’s why these companies are opting for these new locations.
The reason for this sudden shift is cheap available space, coupled with better connectivity. These locations create a competitive option for these companies as they provide for cost optimization.
Says Ravi Ahuja, director (project marketing), Cushman & Wakefield India: “To capitalize on the real estate opportunity created by the IT & ITeS sector and given the escalating cost of land in city limits and outskirts, the real estate industry has witnessed the emergence of industrial locations as IT destinations. A visible shift has started occurring in the perception of these industrial locations. By and large, the demand is being seen from companies that develop software, outsource their business processes directly or through third party sources, research & development, call centers, data centers and a host of activities.”
As a matter of fact, developers or landlords at a number of these industrial locations are willing to provide refurbished structures to IT firms’ needs. Real estate developers who wish to position themselves in these locations have also launched new IT buildings which provide quality office premises with requisite infrastructure and amenities, commensurate with their needs, at reasonable prevailing rentals.
In 2008, Udyog Vihar in Gurgaon will provide an estimated 2 million sq ft of IT office space supply. Chennai has also seen a significant development within the Ambattur industrial area, with a more than 5 million sq ft of IT/ITeS office supply coming up this year. This location has been identified by real estate developers because it is in close proximity to the city and offers reasonable rental rates to end users. Mumbai has also seen prices skyrocket in the last four years. As a result, IT companies now are considering Navi Mumbai and Thane as new destinations as these also offer reasonable rental values.
Says Manpreet Chadda executive director, Wave Infratech: “These industrial locations are situated within close proximity to workforce and talent pool which is a major IT demand driver. These locations create a competitive option for these companies as they provide for cost optimization in a competitive marketplace. Given the rising costs, IT companies are increasingly eyeing new hubs.”
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