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IT Sector Expanding Horizons in Tier III Cities


IT Sector Expanding Horizons in Tier III Cities

Last updated: February 28 2007
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  • IT Sector Expanding Horizons in Tier III Cities

    Tier III cities are in realty race and are attracting large interests from real estate developers as well as potential investors. IT/ITes companies and upcoming retailers are jostling hard to make profits on the first mover advantage in these markets. They are counting on the factors like low property rates, availability of vast land, a great workforce, and improving living standards.

    The growth of Indian rich and consuming class coupled with dropping rates and other fiscal investments on home loans has been major reasons increasing appetite of the average Indian consumer. This has been further fuelled by growing working population in the age group of 25-55.

    Increasing transparency, liquidity in real estate industry is changing the picture of the realty in India. The cities that are likely to zoom in the wake of new interests from sunrise sectors include the names like Chandigarh, Ludhiana, Lucknow, Jaipur, Ahmedabad, Goa, Vishakhapatnam, Coimbatore, Baroda, Guwahati, Bhubaneswar, Surat, Nagpur, Indore, Mysore, Vijaywada, Mangalore.

    Driven by positive growth in the economy and large scale investments in the IT and ITes sectors, real estate in Tier III cities ostensibly flourishing. For example, with the development of Chandigarh Technology Park (CTP), Chandigarh is going to be another hub for IT companies.

    Also, an approved SEZ, CTP has attracted biggies like Infosys, Wipro and IBM. DLF Group has developed DLF Infocity to provide spaces for the tech firms.

    Though Chandigarh does not have much to offer in terms of residential development, the report says that the peripheral areas including Panchkula, Mohali, Zirakpur, Dera Bassi and Nada Sahib are seeing a lot of development.

    As such, the city of rock garden does not have much to offer as far as residential development is concerned. The development has been shifted to the areas of Pinjore, Zirakpur, and Kharar from Mohali and Panchkula. The size of these colonies ranges from as low as 5 acres to as high as 200 acres.

    Bhubaneswar is another place which is offering a conducive atmosphere to IT sector. IT majors Infosys and Satyam are planning to spread their wings here. Apart from Infocity-I, DLF is coming up with IT Park in Chandaka Industrial Estate. Genpact has also announced its plans to set up BPO SEZ in Mancheswar Industrial Estate. A bio-tech park is also on the anvil.

    Great Going for Tier III cities!!!
  • #2


    Re : IT Sector Expanding Horizons in Tier III Cities

    What about Faridabad, HR

    I found this article on a Gurgaon Community Portal GurgaonScoop... It says a lot about become the next hot-spot for BPOs and other IT companies... Quite interesting

    "Call it a simple twist of fate. After years of suburban obscurity, Faridabad, the third largest satellite town of the National Capital Region (NCR), is now calling the shots as far as IT and ITeS-led development is concerned. After Gurgaon and Noida, IT and ITeS companies are now shifting their focus to Faridabad.
    Low rentals in Faridabad are attracting the companies in droves. The rentals in Faridabad 25-30% less than in Noida and Gurgaon. If rentals in Noida and Gurgaon are in the range of Rs 45-80 per sq ft, Faridabad asks for Rs 25 and Rs 40 per sq ft. No wonder, IT companies are making a beeline for this new market. Over 100 acres of IT-led development is planned in the area with more six projects already in the pipeline.

    Says Kabul Chawla, MD, BPTP: "Given the rising costs in other towns, IT companies are increasingly eyeing new hubs and Faridabad is the hot new destination in NCR. In fact, cities with populations of over a million nearer to a big city are becoming a outsourcing and offshoring destinations."

    Agrees Rajeev Bhel, director, Realtech Group: "While Gurgaon and Noida were growing through a hectic pace of development, Faridabad remained in the shadow. But things are changing. Over the past few years, Faridabad has been growing on the back of malls, IT and residential developments -- hitherto witnessed only in prime suburbs. Even as the prime suburbs of Gurgaon and Noida have become costlier for the home buyer, Faridabad has emerged as a viable alternative, considering that its connectivity to Delhi is quite good."

    (Click on "Full Story" for more)

    Besides, Faridabad is the industrial hub of Haryana and has more than 300 large and 10,000 small scale industries. With increased industrial and commercial activity, the real estate market here has seen an increase in capital values for both the retail and residential sector.
    Says Rohtas Goel, CMD, Omaxe Group: "Traditionally, Faridabad remained neglected as far as core development was concerned, but things are changing now. With various civic agencies like HUDA and MCF coming forward to develop the area as a whole, we can expect a brighter future for Faridabad. We believe that this market will mature faster than Gurgaon or Noida.

    We expect it to become a typical upper middle class destination with better connectivity and amenities. It is not only a suburb to Delhi but also a city in its own right with the population crossing two million and a large mass of affluent middle class that is necessary for any consumer boom. With increased industrial and commercial activity, we should soon see a boom. However, all this is possible when organised private sector partners join government agencies in developing world class housing and recreational facilities."

    In a study done by real estate consultant Jones Lang LaSalle, up to 70% of the demand for office space is driven by the over 7,000 Indian IT and ITeS companies. About 15% is accounted for by financial service providers and the ************** sector, with the remaining due to other sectors in these suburbs.

    According to industry watchers, rising land cost and lack of adequate infrastructure support in urban areas are driving away companies to smaller towns that have land and a large pool of educated and skilled workforce.


    Have any questions or thoughts about this?