The future of real estate in India could be in an integrated, campus style development that reduces the load on city infrastructure and allows for sectors like hospitality, education, health, retail, warehousing and logistics and others to flourish, notes Thomas Teo, Chief Executive Officer, Ascendas India Operations, who also manages the company’s real estate business in India which includes the development and management of IT parks and integrated projects.
IT parks have played a major role in laying the foundation for a growing Indian IT industry in the 90s. They continue to be the backbone of IT & ITES services in India. These IT parks provide state-of-the-art infrastructure under one roof and are a major factor for MNCs providing IT & ITES services setting up base in the country. The government’s support by providing tax breaks to developers is a big impetus.
One of the reasons for the success of IT parks is the availability of quality business space that enhances one’s lifestyle by providing a host of amenities. The availability of an easy layout, flexible floor plans and other infrastructure facilities like business centres, food courts, banking and ATMs, and multi-level car parking make these IT parks the preferred choice for MNCs and local companies across different sectors including IT & ITES, banking and financial services, call centres and telecommunication. Most IT & ITES companies, especially MNCs, prefer renting space to investing in fixed assets.
Organisations have become more cautious with every rupee or dollar spent. In office space, the current trend goes beyond providing infrastructure and technology. It is about offering more value per square foot. Corporates are also looking at cost-effective locations, which could mean moving from central business districts to suburban business districts.
The future of real estate in India could be in an integrated, campus style development that reduces the load on city infrastructure and allows for sectors like hospitality, education, health, retail, warehousing and logistics and others to flourish.
Developers, too, are beginning to now focus more on developing integrated community projects with sustainable development options. A host of amenities and services including retail space, crèche services, hotel and service apartments, schools, hospital and residential units are now being offered to provide a complete ‘work-live-play’ ecosystem within the park. As a result of these services developers are able to attract clients while charging a premium. These added offerings have also opened other avenues of income for developers.
The IT parks in Bangalore, Chennai, Hyderabad, Pune and NCR region still command 70-75 per cent of the total IT office space market and are a favorite destination for newer IT parks. Given global economic uncertainties and an overall IT industry slowdown, IT space markets have witnessed a drop in demand. However, developers are waiting for improved economic indicators to expand their product offerings in IT parks and the long-term outlook for IT parks remains positive.