B`lore`s 75% of Sez Office Space Pre-committed

by : Property

Nearly 75 per cent of the 5.8 million square feet of the Special Economic Zones (SEZ) office space set to enter the Bangalore market in 2008-09 are pre-committed.

Built-to-suit (BTS) or campus developments have gained greater momentum in the SEZ space occupancies in the city and developers are busy with BTS arrangements by signing up large companies like Cisco, Accenture and IBM.

Of the SEZ space supply entering the Bangalore real estate market, the ITÃ?ITeS sector alone accounts for over 90 per cent of the approved projects.

In the SEZs for the IT/ITeS sector, about 21.4 million square feet of the notified land is under development in the city. Of this, 19.70 million square feet have been formally approved. This includes 11 projects which have been notified and formal approval has been pending for 12 projects, said international property consultants DTZ's report 'SEZ in India'.

Also, 10 projects have been approved in-principal and three-fourth of this is accounted for by non-IT/ITeS sectors like textiles and aerospace, the report added.

IT SEZs' space supply is coming up along the peripheries of the Outer Ring Road (ORR) and Whitefield. Some of the projects are developed by regional players.

Prominent projects are Vrindavan Tech Village (Outer Ring Road) - 9 million square feet, Adarsh Tech Park (Outer Ring Road) - 5.6 million square feet, Divyashree Tech Park (Whitefield) - 7 million square feet, Manyata Tech Park (Hebbal, Outer Ring Road) - 6 million square feet, Cessna Business Park (Sarjapur, Outer Ring Road) - 3.5 million square feet, Global Tech Park (Mysore road) - 1.2 million square feet and Primal Projects (Varthur) - 1.9 million square feet.

'With the steady supply of SEZ space in the market, rentals range between Rs 40 per square foot to 45 per square foot, which is marginally higher than the average peripheral business district (PBD) rentals. The cost, however is substantially lower when compared to the Grade A office rentals of Rs 90 per square foot to Rs 110 per square foot in the central business district (CBD) and off-CBD regions,' said DTZ.

As for the SEZ space supply outlook, DTZ says: 'Year 2007 saw supply exceeding demand in non-SEZ space. Over 10 million square feet is expected to further add to the existing stock over the next two years. The SEZ space, on the other hand, is limited and the present level or development is guided by a demand-led supply through re-commitments. Ready to move in SEZ options available over the 8 to 12 months would be limited.'