Which are the most ex­pen­sive IT cor­ri­dors in ma­jor In­dian cities?

HT Estates - - HTESTATES - Ramesh Nair ht­es­tates@hin­dus­tan­times.com The au­thor is CEO & Coun­try Head, JLL In­dia

In­dia is touted as one of the biggest IT des­ti­na­tions in the world, and it was one of the first coun­tries to ben­e­fit from the out­sourc­ing trend that orig­i­nated in the early 1990s. With a sig­nif­i­cantly large English-speak­ing work­force and tech­ni­cally skilled man­pow­er­a­vail­ableatrel­a­tively af­ford­able costs, In­dia rose to fame as an off­shoring hub. The term‘Ban­ga­lored’- coined­forthe coun­try’s pre­ferred off­shoring des­ti­na­tion - re­flects the global im­pact of In­dia’s IT in­dus­try.

With rev­enues of around $160 Bil­lion andtheITin­dus­tryun­der­go­ing trans­mu­ta­tion from low­value off­shoring pro­cesses to high-en­d­an­a­lyt­ics­func­tions, it is a good time to look at some key of­fice cor­ri­dors that have­be­come syn­ony­mous with our IT in­dus­try.


Re­flect­ing the huge de­mand that comes from tech­nol­ogy oc­cu­piers, both global and do­mes­tic, ap­prox­i­mately 70% of In­dia’s com­mer­cial Grade A stock com­prises of IT and SEZ de­vel­op­ments. Each of the ma­jor 7 cities is has prom­i­nent IT cor­ri­dors that are pre­ferred des­ti­na­tions for the IT in­dus­try.


With 92 mil­lion sq. ft. of IT-spe­cific real es­tate in­ven­tory in the mar­ket, Ban­ga­lore­takestopspot as one of the lead­ing IT des­ti­na­tions. Ac­count­ing for the pres­ence of more than 35% of all IT com­pa­nies in In­dia, in­clud­ing a mix of multi­na­tional firm back of­fices, cap­tive back of­fices and In­dian tech gi­ants, the city is un­doubt­edly the largest con­trib­u­tor to the IT mar­ket in terms of space take-up.

Ma­jor IT cor­ri­dors in Ban­ga­lore in­clude­theen­tireOuterRing Road (ORR) cor­ri­dor andWhite­field. ORR is the most ex­pen­sive cor­ri­dor, with­rentals goin­gupto $1.24 per sq. ft per month, owing to its good road in­fra­struc­ture, well-es­tab­lished res­i­den­tial catch­ments in the vicin­ity and wellasin­no­va­tive­in­fras­truc­ture such as a sig­nal-free cor­ri­dor.

There is a lot of fo­cus on in­fra- struc­ture de­vel­op­ment in this mi­cro-mar­ket, mak­ing it a go-to lo­ca­tion for IT firms.

Alack­of­sup­ply­with­sus­tained de­mand­hasen­abled­land­lord-favour­ing mar­ket con­di­tions, and this cor­ri­dor is bound­toseer­ents grow­ing fur­ther.


The Delhi – NCR IT cor­ri­dor has Cy­bercity and Sohna Road, in ad­di­tion to Noida where most of the IT in­dus­try is con­cen­trated. While the av­er­age rentals for most of the lo­ca­tions range be­tween $0.62-0.93 per sq. ft. per month, DLFCy­berci­ty­is­the­most ex­pen­sive mar­ket with rents trending at $1.7 per sq. ft. per month.

Cy­bercity has 13.4 mn sq. ft. of qual­ity of­fice stock con­trolled by a sin­gle land­lord, giv­ing the en­tire mar­ket a cam­pus-style en­vi­ron­ment.

It has ex­cel­lent con­nec­tiv­ity via NH-8 to and from Delhi, as well as mul­ti­ple in­fra­struc­ture ini­tia­tives to curb­peakhour­con­ges­tion – Rapid Metro, 16-lane ex­press­way, good­traf­fic man­age­ment and con­trol, pu­bic park­ing spa­ces and walk­ways be­tween build­ings to re­duce pedes­trian move­men­ton­roads. The­mar­ket also has ex­cel­lent sup­port re­tail.

It is one of the most ex­pen­sive F&Bhigh­streets, an­dis­ades­ti­na­tion of choice for pro­fes­sion­als and res­i­dents.


Hitech City is Hyderabad’s most ex­pen­sive IT cor­ri­dor and has re­mained the most sought-after lo­ca­tion for IT/ ITeS firms dueto its ex­cel­lent ecosys­tem, qual­ity Grade-Aof­fice spa­ces, large floor plates and­p­res­ence­o­fa­com­bi­na­tion of Non-IT, STPIandSEZs­paces. With well-rounded de­vel­op­ment, it ex­hibits aper­fect­blendof res­i­den­tial projects, up­com­ing re­tail malls, ho­tels, of­fice spa­ces and ex­hi­bi­tion cen­tres.

With­most of­fice projects here op­er­at­ing on a pure lease model, private equity funds have been ac­tive in trans­act­ing large-sized projects. Other ma­jor IT cor­ri­dors for Hyderabad are Gachi­bowli, Nanakramgu­daandRaidurg, all with av­er­age rentals of $0.70-0.80 per sq ft per month.


In Mum­bai, the west­ern­sub­urbs cor­ri­dor is the mos­t­ex­pen­siveIT mar­ket with rentals trending at $1.3 per sq. ft per month.

Large multi-na­tional firms pre­fer this lo­ca­tion to set up­busi­nesspro­cessin­gu­nit­sand­cap­tive back of­fices. This is be­cause it of­fers easy ac­cess to tal­ent, and ex­cel­lent so­cial in­fra­struc­ture with prox­im­ity to malls an­dres­i­den­tial catch­ment ar­eas adding to the at­trac­tive­ness of this loca- tion. The up­com­ing metro line will en­able greater con­nec­tiv­ity in this cor­ri­dor and as a re­sult, rentals are­seein­gas­teep­up­ward trend­o­fover10-12% yearonyear.

OtherIT­cor­ri­dors in­clude the Thane and Navi Mum­bai belt with pep­pered sup­ply across the East­ern Sub­urbs. NaviMumbai, whichisanal­readyestab­lish­cor­ri­dor, is ex­pected to be­come one of the most sought-after des­ti­na­tions in the fu­ture. With large floor plates, ease of ac­cess, mar­ke­trental­saslowas$0.70 persq. ft per month and am­ple SEZ and nonSEZ­s­tock, it is ideal for large­for­mat IT parks.


The dis­tricts of Sec­tor V in Salt Lakecom­mandthe­high­estrentals rang­ingfrom$0.54-0.70 persq. ft. per month. This cor­ri­dor has of­fice build­ings with medium to large size floor plates and is lo­cated close to the main city ar­eas. Th­ese fac­tors, cou­pled with the avail­abil­ity of qual­ity Grade A of­fice spa­ces, cre­ates high de­mand from of­fice oc­cu­piers andthere­byre­sults in higher lease rentals as com­pared to Ra­jarhatNewTown, whichis­the other IT cor­ri­dor com­mand­ing av­er­agerentalof$0.46-0.59 persq. ft. per month.


The OMR pre-toll lo­ca­tion sees the max­i­mum trac­tion from the IT in­dus­try, with rentals as high as$1.24 persq. ft. per­month. This IT cor­ri­dor con­sists of Grade A build­ings with easy ac­cess to the city cen­tre.

Prox­im­ity to good­so­cial in­fras­truc­ture­al­so­help­sit to re­maina lo­ca­tion of choice for ma­jorMNC firms.

With lim­ited va­cancy and no newup­comin­gof­fice­build­ingsin the­n­ear­future, therentals inthis cor­ri­dor are ex­pected to rise.


Puneis­apop­u­larITlo­ca­tion due to the avail­abil­ity of alarge­tal­ent pool­reg­u­lar­lye­merg­ingfromthe city’s many ed­u­ca­tional in­sti­tutes.

Kharadi-Hadap­saris­the­most ex­pen­sive IT cor­ri­dor in the city, com­mand­ing av­er­age rentals of $1 per sq. ft. per month.

Ex­cel­lent con­nec­tiv­ity and prox­im­ity to so­cial in­fra­struc­ture have­been­the­ma­jor­drivers for this cor­ri­dor, firm­lyestab­lish­ing it as a des­ti­na­tion of choice.

Low va­cancy cou­pled with a ro­bust de­mand mo­men­tum is driving rental growth here.

Hin­je­w­adi­hasal­soe­mergedas a favoured IT des­ti­na­tion, sup­port­ed­by­gov­ern­ment­pol­i­cypro­mot­ing­cam­pus­de­vel­op­men­tand its rel­a­tively af­ford­able rents. Firms pre­fer to en­ter into longtermleasea­gree­mentsinthis­cor­ri­dor.


Thetal­entabun­dan­ceinthe­large cities has been the pri­mary rea­son­fortheITin­dus­try­toflour­ish, with the avail­abil­ity of qual­ity real es­tate and sup­port in­fra­struc­ture be­ing of equal im­por­tance to IT oc­cu­piers.

In­dia’s strength asanout­sourc­ing des­ti­na­tion will re­main in­tact asit con­tin­uestochurnout skilled en­gi­neers and in­dus­trycompat­i­ble grad­u­ates.

Th­e­se­firm­swill also be­able to af­ford the slightly high­er­rentsin es­tab­lished IT cor­ri­dors.

In­creas­ing real costs are re­sult­ing in cre­ation of newer IT cor­ri­dors within the larger cities as well, with de­vel­op­ment mov­ing fur­ther away from the city cen­tres for off­shoring oc­cu­piers.

Realestate­ac­tiv­i­tyinthewest­ern sub­urbs has in­creased sub­stan­tially in the re­cent decades­dueto the es­tab­lish­ment of com­mer­cial of­fice com­plexes in the And­her­iGore­gaon-Mal­ad­belt. En­hanced con­nec­tiv­ity via the West­ern Ex­press high­way helped in the re­gion’s de­vel­op­ment as a key of­fice mar­ket of the city.

Withtheim­prov­ing­so­cial­fab­ric of there­gion, mas­siveres­i­den­tial de­vel­op­ments have cropped up in th­ese ar­eas. Presently, the west­ern­sub­urbs’hous­ing­sup­ply ac­counts for around 44% of the to­tal ad­di­tion in Greater Mum­bai, and nearly 13% of the en­tire MMR. Re­puted de­vel­op­ers such as Oberoi Realty, Lodha Group, Acme Hous­ing and Omkar Re­al­tors, among many oth­ers, have res­i­den­tial de­vel­op­ments in the west­ern sub­urbs.

Con­cur­rently, the cen­tral sub­urb­sal­so­grewrapidlyasasig­nif­i­cant amount of in­dus­trial land was con­verted for res­i­den­tial pur­poses. Ini­tially, lo­ca­tions such as Ghatkopar, Powai and Mu­lund­de­vel­ope­das­ma­jor­res­i­den­tial ar­eas in the cen­tral sub­urbs. In fact, Powai has evolved as one of the posher lo­ca­tions of the cen­tral sub­urbs due to the pres­ence of the Hi­ranan­dani

Kan­jur­marg has ex­cel­lent con­nec­tiv­ity with the business dis­tricts of Thane, Powa­iandBKCas well as South Mum­bai via LBS road, JVLR, East­ern Ex­press high­way, SCLR and the East­ern free­way. It is also well-con­nected via the cen­tral line of Mum­bai sub­ur­ban­rail­waynet­work. Over thetime, con­ver­sionofind­us­trial land has helped in un­lock­ing a trea­sure trove of land parcels for res­i­den­tial de­vel­op­ments.

Th­e­se­land­parcel­swerepre­vi­ously oc­cu­pied by com­pa­nies suchasCromp­tonG­reaves, Ech­jay Forg­ings, Ex­ide in­dus­tries, Whee­labra­tor Al­loy Cast­ings, etc.

Abun­dant so­cial in­fra­struc­ture is an­other fac­tor that has helped Kan­jur­marg’s evo­lu­tion as a res­i­den­tial hotspot in the city. Prox­im­ity to Huma Mall, R-Ci­tyMal­landthe­high­street­sof Powaiprovide­mas­siveshop­ping and en­ter­tain­ment op­tions for


DLF Cy­bercity has ex­cel­lent road con­nec­tiv­ity via NH­8 to and from Delhi

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