Forget size, dozens of IT SEZs go ahead with plans

SUDIPTO DEY

TIMES NEWS NETWORK[ MONDAY, APRIL 09, 2007 02:49:22 AM]

NEW DELHI: Size does not seem to matter for the developers of IT SEZs.
Unperturbed on the brouhaha over size of multi-product SEZs, many
developers of IT SEZs are going ahead with their plans and at least two
dozens of them are likely to hit the street over the next 12-18 months.
And the early birds are looking at commanding a premium in the lease
rentals.

One of the new ones to jump onto the bandwagon is Mumbai-based Royal
Palms Estates, which is setting up an IT/ITeS SEZ spread over 25 acres,
with projected development cost of around Rs 650 crore over the next
three years. While many IT SEZs are targeting large users — with minimum
leased space requirement of 50,000 square feet — Royal Palms plans to
devote substantial chunk of space to small users whose demand may
typically vary from 2,000 sq feet to 50,000 sq feet. "Not many are
targeting smaller users, who would not mind paying a premium to be part
of an SEZ, which is within city-limits," said Dilawar Nensey, joint
managing director, Royal Palms Estates.

Another IT SEZ coming up in Mumbai is the one being developed by
Hiranandani Builders at Powai. Sources in real estate market said IT
major TCS have already booked over 60% of the space in the Powai SEZ.

Analysts point out that larger users of office space generally prefer to
position themselves on the outskirts of cities, where rentals are much
lower, while smaller users tend to stay closer to city-centres.
Typically, large users are able to bargain harder for lower rentals,
while smaller ones end up paying premium for the space.

As per industry estimates of the 140-odd IT/ITeS SEZs approved by the
central government, at least 25-odd such SEZs should be up and running
by end-2008.

While the uncertainty over extension of the STPI scheme beyond 2009 may
give some SEZs edge in marketing themselves to new players entering the
space, existing players who currently operate under the scheme are
keeping their expansion plans flexible. "Many corporates, who are used
to plan their office space needs three years in advance, are now just
looking at their requirements for the next 18 to 24 months," points out
Ankur Srivastava, MD, DTZ India, a real estate consultancy firm.

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