Sezs to Fulfill Office Space Demand in Hyderabad

By: George Gonigal

With the combination of high quality IT infrastructure, excellent employable human resources, business friendly policies and a proactive government, Hyderabad is among the most preferred real estate destinations of India. It has 40 IT SEZs and hopes to reach US$7 billion mark with a prospective growth of 50 per cent during the current financial year.

An estimated 60-70 million sq. ft of IT/ITeS specific commercial office space is expected to come up through special economic zones alone by 2010 in India. And out of the seven cities where such zones are coming up, Hyderabad leads with about 30 per cent (25 million sq ft) of the total expected supply of real estate, then Pune comes with nearly 23 per cent (23 million sq ft) of the total supply estimated to come up by 2010. Pune is followed by Bangalore with 13 million sq ft and Chennai with 15 million sq ft.

The south zone has been the frontrunner of the special economic zone movement in the country, accounting for 36 per cent of all approvals coming through, till date. One state that has clearly dominated the scene is Andhra Pradesh, which accounts for nearly 25 per cent of total notifications. Pockets of maximal real estate development activity in the state include the districts of Hyderabad and Visakhapatnam.

In fact, the supply of new office space supply in the special economic zone space is going to far outstrip the fresh supply in non-special economic zone space in the coming years. This is because building real estate in special economic zone comes out to be 15-20 per cent cheaper than building space for non-special economic zone space.

While IT/ITeS SEZs are the smallest (10-30 hectares of land area), multi-product (over 1,000 hectares) and sector specific SEZs (100-300 hectares) account for most of the largest SEZ developments in the country. Hence while the maximum applications processed are for IT/ITeS usage, the total land area under real estate development for them is far lower.

However, non IT/ITeS SEZs which, on the other hand, are much larger in size and have a larger share of investments compared to IT/ITeS SEZs, will take at least five to seven years more to mature.?

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