IT COS' DEMAND FOR SEZ SPACE RISING, POST-BUDGET

Moumita Bakshi Chatterjee, New Delhi, March 17, 2008
The Hindu Business Line

Real estate developers are seeing a sharp rise in enquiries from IT and BPO companies making a beeline for space in Special Economic Zones (SEZs), barely a fortnight after the Budget ducked the crucial issue of extension of the Software Technology Park of India (STPI) scheme.

“Due to non-extension of STPI benefits, all of a sudden we are seeing a very large demand in all our IT SEZs and we see the rentals also moving upwards. This year, we expect the IT SEZ business to do phenomenally well,” Sanjay Chandra, MD, Unitech Ltd, told Business Line.

According to real estate advisor DTZ, by 2010 as much as 60-70 million sq ft of IT- and ITES-specific commercial office space is expected to come up in India through SEZs alone. Close to 60 percent of the SEZ projects in the pipeline belong to the IT and ITES, as STPI benefits are set to end in March 2009.

On similar lines, Indiabulls said there has been a definite “build-up in demand of late”, although it was early days to quantify the uptake. “Large IT companies will go for their own SEZs, so it is the mid-sized companies that are primarily looking for space,” said Gagan Banga, CEO of Indiabulls, which has two SEZs — one each in Mumbai and Nasik.

Parsvnath Developers also said there has been an increase in enquiries post-Budget. According to Dr B.P. Dhaka, Chief Operating Officer of the Delhi-based real estate company, “many companies are in active dialogue with Parsvnath for space — although we are yet to start the bookings.”

Confirming that there was a surge in demand for SEZ space, with more and more IT clients seeking space in SEZs, Anuj Puri, Chairman and country head of Jones Lang Lasalle Meghraj pointed out that while many new projects would move to SEZs, the high-end work involving researchers and scientists may continue within the city in STPs, as companies will not want to risk losing such professionals.

However, DTZ points out that none of its clients had held back SEZ plans ahead of the Budget. “Several of our clients were evaluating moving to SEZs, irrespective of the Budget announcement,” said Vivek Dahiya, Director of DTZ.