IT SECTOR OFFICE SPACE
A study shows that in 10 yrs, IT sector alone will occupy 75% of the total demand. IT sector office space demand is increasing and likely to go up.
The highly successful Indian enterprise is fast-expanding and as a consequence is hungry for land was already known. But exactly how much office space would be needed in a fast-expanding domestic economy was not.
Some indication can now be had thanks to a study executed by McKinsey & Nasscom which estimate the total demand for office space at a possible 500 million square feet in the next ten years.
In fact, the study cites the continued growth in IT/BPO industry as being primarily responsible for 60-75% of commercial real estate demand during the period of 2005-15. While growth in the rest of Indiaâ€™s non-IT and manufacturing sectors will fuel the remaining 25-40% of commercial real estate demand by 2015.
The realty giant in India, DLF Group has zeroed-in on the projected need for office space and is aspiring to develop 110 million square feet of the same in the next ten years.
The company will develop 39 million square feet of office space, all of which is already locked-in, over the next three years. DLF is already among the largest office space providers in the country with 20-25 million square feet either already constructed or under development, the source revealed. The company has already a land base in place for a total of 50 million square feet, apart from strong technical skills, customer relations and superior marketing capability.
Demand to be mainly in a dozen cities. About 50% of planned office space is already in with land banks in place. Office space demand for the next five years is likely to be concentrated in just 10-12 cities like Delhi, Kolkata, Mumbai, Pune, Ahmedabad, Bangalore, Hyderabad, Chennai, Lucknow, Kanpur and Chandigarh.
The current office space scenario in comparison with other major world centers is given below,
COUNTRY / CITY——-OFFICE SPACE ALREADY BUILT(mn â€“ millions)
Hong Kong——————————-176 mn sq ft
Singapore——————————-65 mn sq ft
India——————————-100 mn sq ft
Bangkok——————————-72 mn sq ft
Mumbai——————————-12 mn sq ft
Even otherwise, Indiaâ€™s office space has doubled over the past three years to 90-100 million square feet in 2005 from 45-50 million square feet in 2002, while 55-60% of space is concentrated in large metros of the National capital Region, Mumbai, Bangalore and Chennai.
Despite recent growth, the domestic office space is much lower compared to other Asian countries or cities. The country has 95-100 million square feet office space against 176 million square feet in Hong Kong.
Mumbai has just 12 million square feet office space against 65 million square feet and 72 million square feet in Singapore and Bangkok, respectively.
In addition to the Mega and Metros of India other larger cities in near future may be making their contribution as IT hubs and accordingly providing the necessary infrastructure with improving communication systems in India. With the requisite skills in place already it is a matter of little more time for the larger cities to provide the office space.