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Gurgaon: Corporate India's new mecca


Gurgaon: Corporate India's new mecca

Last updated: February 16 2012
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  • Gurgaon: Corporate India's new mecca

    A few minutes of travel on the gleaming highway that connects Delhi to Jaipur will help you believe that all of corporate India is moving to Gurgaon, one of Delhi’s two main satellite cities.

    On both sides of the eight-lane road (it appears to be four-laned due to the unchecked parking on both sides of it), 21 gigantic towers that span 8 million square feet have changed the skyline of this sleepy town beyond recognition. Passersby will be forgiven for thinking they are in Hong Kong, so dazzling is the glare of this mega concrete jungle with its innumerable lights at night.

    Just behind Cybercity (which by 2010 will comprise 15 million square feet of office space over 150 acres of which 8 million is already built) and touching on one side the “Mall of India” (India’s largest retail mall), there is DLF’s special economic zone. Here there is a cluster of another 15 buildings that will offer close to another 5 million square feet of office space to companies primarily in the IT arena.

    Further on the same road, close to the DLF Golf Club on what is called the sector road, new buildings have come up in the last few months for American Express (which has moved its corporate headquarters to Gurgaon in a DLF building that spans over a million square feet), and Ernst and Young (built by Alpha G), consolidating several small offices spread around Delhi. Hewitt, Dell and Indiatimes are some of the other companies who now find themselves in close proximity of the Golf Course. DLF, which owns large chunks of land in the area, is chalking out grand plans, several of which will be in the commercial space.

    If one doesn’t take the left just after crossing the “ship building” and continues straight on the highway to Sohna road, there’s a second range of commercial space on offer — a series of retail-cum-office buildings by smaller developers. What distinguishes this from the Cybercity-like offices is that office spaces are smaller (5,000-10,000 square feet), cheaper and are usually on top of a mall. There are no exclusive made-to-order office space coming up along this road, which is currently aiming to offer just over a million square feet of combined office space.

    Developers like Universal and Vatika are offering space ideally suited to smaller businesses. For companies that don’t primarily care about location or client visits, there is a third option of setting up base at IMT Manesar — at least another 20-25 km further towards Jaipur from the ship building — which is expected to offer close to 1.39 million square feet of office space by 2009-10. Welcome to Gurgaon, corporate India’s new mecca. Initially when DLF started developing Gurgaon, it was promoted as the cheaper alternative for residents, looking for a reprieve from a crowded, waterless and powerless Delhi. However, over the years (especially since 2003), mainly companies and commercial growth have been shaping the new look of the city.

    In 1997, Gurgaon’s leading developer DLF set up its first commercial space on the Mehrauli-Gurgaon road — DLF Corporate Park (which was sold to companies), followed by many others staggered across the city. Similarly, developers like Unitech set up buildings like Global Business Park (again on MG road). However, till 2003, the total commercial construction by developers in Gurgaon was very low. “For instance, we (DLF) built just around 2 million square feet of commercial space till 2003. However, since 2003, the company is delivering around 2 million square feet of commercial space every year,” says DLF Commercial’s chairman A S Minocha.

    Since it started development in Gurgaon, DLF has built 17 million square feet in residential high rises (another 9-10 million is under development). But commercial development is already over 10 million in just four years. Rents have kept pace with the rise in demand. Buildings that were earlier (in 1997-98) leased at Rs 6-8 per square foot are now going at Rs 60-80 per square foot. While Noida — the other satellite city — is also adding to the total commercial supply, its growth is far slower than Gurgaon (by 2009-10, it will supply another 14.5 million square feet of commercial space).

    According to Frank Knight, one of the leading real estate consultancy firms, “strong pre-commitment demand is expected to continue in Gurgaon” which has “become the centre of new age office space development in NCR, and is today witnessing the development of some large formats office projects”.
    Last edited May 5 2008, 04:33 PM.
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    Re : Gurgaon: Corporate India's new mecca

    Gurgaon: Corporate India's new mecca

    It is the hub of all things corporate. The business is booming, the development is all encompassing. Industry players and experts are confident that Gurgaon has all that it takes for a city to become the financial centre of any place if a few things are taken care of

    If it was not for the industrial and corporate activity way back in the 90s, Gurgaon would have remained a sleepy small town situated close to the capital of the country.But as luck would have it, this quaint little town has today become a powerhouse of multinationals and industries across segments. A major corporate hub of NCR, it figures prominently on the business scene with real estate, IT, manufacturing sectors growing by the day,but does it have the potential to become the financial capital of Haryana or for that matter the NCR?

    Anshuman Magazine,Chairman & MD, CBRE South Asia Pvt Ltd, explains, "Gurgaon already is a key growth driver for the state of Haryana and the entire National Capital Region.Being the hub of real estate activity in the region,Gurgaon has a vast base of multinationals, industrial corporations, institutions and commercial enterprises.

    While the Municipal Corporation of Delhi (MCD) Act in 1957 prohibited any large scale private development activity in Delhi,Gurgaon originated as a result of private sector initiatives. In more than a decade,commercial office stock in Gurgaon has grown from a meagre 2 million sq ft to almost 35 million sq ft, housing some of the biggest global enterprises and posing a major challenge to existing CBD." Considering the fact that the country is emerging as one of the economic superpowers of the world, further industrial and financial growth is the only way forward. Retail market is opening up to international players. The western world may be having second thoughts on whether to outsource work to Indians and Chinese, yet inexpensive but qualified labour and cost savings continue to be the reasons bringing companies from across the world to India. And, cities like Gurgaon are the first choice of these investors.

    Even when it comes to Indian companies,they prefer to be in the vicinity of Delhi, yet not in it thanks to increasing office rentals and space crunch.All this makes Gurgaon stand in good stead. Partha Basu, CFO and Whole-time Director,Akzo Nobel India, a leading paint manufacturing company, points out the advantages that a city like Gurgaon holds, "It has strong location advantage as it has proximity to New Delhi and strong connectivity, robust urban planning,high quality infrastructure at affordable prices, availability of talent which helps in smooth operation of business and everlasting development, spreading much beyond the current city limit, among many others." He elaborates by adding that the areas of operation in Gurgaon cover all segments, so there is something for everyone. He says, "The one unique advantage that Gurgaon has is the presence of all businesses which makes it easy to connect and do business. So you'd have everyone from financial services operations with back-office of banking, insurance and asset management companies, capital market and trading, private equity, hedge funds and of course IT Services among other things."

    There is no doubt that the growth of this region has been immense, now eventually also benefiting the nearby areas of Manesar, Bhiwadi, Sonepat and beyond too. Sandeep Goyal, founder and CEO of PackagingConnections, a research and consultancy firm in the packaging industry, is emphatic in his assertion that Gurgaon can be the financial hub of Haryana.But,he feels it is time the Millennium City is accorded the status it should have got by now.He suggests,"All the regulatory bodies need to move to Gurgaon and not stay in Chandigarh or at least have a branch office with better turn around time.

    Basically, Gurgaon needs to be treated like a state capital owing to the rapid growth and investments happening here. While we call it NCR, it should also be treated like one and not part of another state. Many laws here are rigid.And of course,better open entertainment places for general public."

    Point taken. All said and done, there are still certain concern areas that are a pre requisite for any financial capital in the world.The physical infrastructure in terms of roads,transport,security,etc., are issues that need to be addressed.Industry experts believe that while the city has the potential to take on the mantle, it can't be done without taking into account the basic amenities and improving the same. Udit Mittal, MD,Unison International,one of the leading HR companies in India,deals with human resource and getting people hired for the right job. Though people do tick Gurgaon as one of the cities they would like to work at,he expresses fear at the fact that of late this trend is on a downside.He shares, "The fact that Gurgaon is the hub of all corporate offices, big and small and that the standard of living is quite high. However, when a person shifts to a city to work and live with his family,he also is faced with issues like basic infrastructure, safety issues and also traffic. A cosmopolitan urban centre that our Millennium City is, it is imperative that the administration urgently diverts its attention to get cracking on the negatives it so that the businesses don't start looking for options to move out from here. Things should only get better now, not worse." Echoes Partha Basu of Akzo Nobel India, "Core infrastructure like road, drainage, master planning,transportation, electricity and water supply should be the backbone of the infrastructure in Gurgaon and must be developed with utmost urgency."

    Industry players are of the view that for Gurgaon to become the Mumbai of Haryana or NCR at large in terms of its being called as the financial capital, what it needs to do is follow the example of the maximum city.Anshuman Magazine of CBRE South Asia Pvt Ltd, suggests, "Gurgaon has amongst the highest per capita incomes in the country, besides

    Chandigarh,Mumbai and Delhi. However, it fails to offer a world class support infrastructure to global corporates to establish it as their leading regional headquarters. A focus on transport, connectivity, power, telecom and basic infrastructure would help enhance Gurgaon's profile against competing cities like Noida, Chandigarh, Bengaluru and Mumbai. The local government has also been largely focused upon the IT/BPO sector as a leading propeller of regional growth. This approach needs to change and a comprehensive policy regime seeking to set up a financial centre like the Bandra Kurla Complex in Mumbai needs to be developed and implemented on an urgent basis."

    If these suggestions are seriously thought over, there would be no trouble in giving it a turnaround to make the corporates stay put and also offer new businesses an opportunity to develop right here. Sandeep Goyal of PackagingConnections sums up, "I think there are definitive opportunities here as we are in the corporate hub and home to big multinationals and conglomerates.Better access to airport than some parts of Delhi has also played a contributory role in growth. This also offers small business an opportunity to set shop and run successfully. There is also an opportunity where infrastructure can be improved for families to bring up their children like affordable educational/sports schools. Hope the government bodies do something in this regard."



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