Tech Parks



During the 1950s when the Nehruvian model of socialism was considered de
rigueur for India’s industrial growth, the effusive PM had called heavy
engineering PSUs the ‘temples of modern India.’ The passage of half a
century has dramatically altered the scenario: the failure of the Nehruvian
model meant the bell has tolled the final time for many of these temples.

Instead of state-controlled heavy engineering units, the current era of
liberalization has witnessed the growth of state-of-the-art tech parks as the
‘temples of 21st century India’. And, thankfully, keeping up with the
socio-economic and business dynamics of the times, these parks are not only
government-owned, plenty of private players, including global ones too, have
joined the boom.

Campus vs Park
Though lay industry observers include every state-of-the-art campus owned by
IT companies, dotting most of the large cities across the country, as tech
parks, the discerning experts are more particular of the nomenclature. Anshuman
Magazine, managing director, CB Richard Ellis, South Asia, defines a tech park
as one that essentially has office buildings where design and support services
are incorporated to facilitate operations of an IT company.

In contrast, large IT behemoths like Infosys, TCS or Wipro, at least in
cities where they are headquartered, have gone for own campuses; while in other
cities they have set up shops in tech parks for their second or third centers.
Magazine explains that generally companies who develop their own campuses
already have substantial operations. Having own campuses, therefore, gives them
future flexibility for expansion and better-controlled environment and, most
importantly, this entails only one-time capital investment. He also predicts
that this trend will slowly increase, especially with companies that are looking
at scaling up operations.

An important reason why IT companies prefer tech parks is because of the
increasingly larger menu they get to customize their offices. Consider the 1,440
acre Mahindra City near Chennai, jointly promoted by Mahindra & Mahindra
(M&M) and infrastructure firm IL&FS. This complex offers two more
options to IT companies other than the traditional ‘ready built’ option:
campus, and built to suit. Under the ‘campus’ format, companies can buy the
land and develop their own structures. If a firm prefers the ‘built to suit’
option, the design and other needs are carried out as specified by the client.
Of course, the city will also have a 200,000 sq ft ready built structure. The
city also offers other infrastructure necessities like unlimited bandwidth, 24/7
power, besides food courts.

The New Temples
Notwithstanding many of these privately owned campuses, tech parks are
growing in harmonic progression across the country. If information technology is
the religion of modern India, tech parks are the new temples. Tech parks are
being planned in almost every state, across the country. Not only the usual
suspects like Bangalore, Hyderabad, Chennai, or Pune and Kolkata, more recently
added to the list, the spread encompasses diverse cities from Kochi to Panjim,
from Bhubaneswar to Vishakapatnam, and from Chandigarh to (believe it or not)
Ladakh in Kashmir.

Government-run STPIs have succeeded in creating IT pockets across the country. Now, with private tech parks coming up, this will help in further driving IT across the country

One thing is for sure-the world is definitely taking notice of this growing
tech park boom: not only are global players like GE and Singapore-based business
space provider Ascendas joining the fray, but when Ascendas added a new building
called “Inventor” to the sprawling complex of the International
Technology Park, Bangalore, the Deputy Prime Minister of Singapore Tony Tan flew
into the city to inaugurate it. The first halt of Chinese Prime Minister Wen
Jiabao’s maiden visit to India in April 2005 was Bangalore-not capital New
Delhi-and the most important engagement was a visit to the IT park.

When they first started coming up in the late nineties, software technology
parks (STPs)-as they were called then-redefined the landscape of large
Indian cities. Now, these parks are part of the new mantra being mouthed by
state governments who missed the IT bus in the previous decade. (See The India
Map for the locations of STPs across the country.) And with all companies in
STPs coming under the Export Oriented Units (EOU) scheme, whereby they enjoy tax
holiday for software exports, more and more private tech parks that are coming
up now include them into the STP umbrella.

The Lifestyle Card
After Mumbai and Bangalore reached a saturation point, cities such as
Chennai, Pune and Kolkata have became attractive destinations. In 1999-2000,
75-80 sq ft was allocated, per person. This increased to 95-110 sq ft, per
person, in 2004. The space includes employee amenities and facilities such as a
cafeteria, gymnasium, nursing and training rooms. BPO companies have been
consuming the bulk of office space in recent years. Landlords and private
investors are changing building specifications and transaction terms to include
larger and more efficient floor plates and improve service standards. The
upcoming tech parks built by government agencies also conform to this trend.

Take the case of the Rajarhat project in West Bengal that will have retail
stores and entertainment facilities and a 500,000 sq ft open-air landscaped
podium, ATMs, gyms and even a multiplex. The first phase of the tech park is
ready and the project will be completed by mid-2006.

Another classic example of metros playing the lifestyle card for tech parks
is the Magarpatta City in Pune. Global majors Avaya, EXL, Sybase and several
others have already been bought into the concept.

Scalability options are also provided in ample that gives scope for future
expansion of companies in the same campus. Built-to-suit buildings are also
offered wherein the companies can have their own individual building with
customized specifications and requirements. Incidentally, it is approved as the
largest Private IT park by STPI.

The Foreign Hand
The need for ‘plug-and-play’ facilities for administrative purposes near
government offices and airports drive the demand for built-up spaces.
Multinationals may have long-term plans but they generally prefer to occupy tech
parks on a leased basis. This is the reason why more than 80% of the occupants
in India’s tech parks happen to be MNCs. There is also a requirement for
temporary accommodation from companies based in India that wish to conduct
recruitment and training before they shift into a permanent facility. According
to a market report, it takes 8 to 10 months for a company to create its own
facility. As much as 100,000 sq ft of space may be used for such projects.
Companies occupy interim facilities on a leased basis during construction.

Since more than 80% of the occupants in India’s tech parks are
multinationals, quality is emerging as a defining parameter at these parks. They
offer global class amenities for offices at costs which are many times lower,
compared to what similar facilities cost in the West. Uninterrupted power,
broadband (in many cities, wireless) connectivity, high speed elevators,
futuristic steel and glass buildings were always a given in major tech parks
such as those in Hyderabad, Bangalore and Chennai.

Now the bar has been raised even further with global builders moving in. For
instance, the contract for building the Gujarat Infocity in Ahmedabad was handed
over to Florida-based Creative IT after processing global bids. Singapore-based
Ascendas recently acquired the 47% stake held by the Tata group in their joint
venture that runs Bangalore’s IT park. Ascendas is also developing a cybercity
near Chennai in alliance with the government of Tamil Nadu. According to Goh Kok
Huat, CEO, Ascendas India and chief operating officer of Singapore-based parent
company, Ascendas Pte, “Chennai is one of the cornerstone cities in our
Pan-India strategy, the others being Bangalore, Hyderabad, Kolkata and Pune.
Ascendas is committed to develop Phase 2 and 3 of the International tech park,
to create a property of international standards.

With the launch of this project, Ascendas is also well on its way to
achieving its goal of managing at least 3 mn sq ft of prime business space in
Chennai. This will consist of 1.5 mn sq ft in International tech park, and
followed closely with nearly 1 mn sq ft in Mahindra City and other projects that
we are currently developing in this city. Says Chong Siak Ching, president and
CEO of Ascendas Pte, “ITPC is Ascendas’ flagship project in Tamil Nadu,
and fourth in India We intend to extend the Ascendas experience to customers
across India. By end 2005, we will be managing 4 mn sq ft. We hope to double
that in the next 2 years as we plan to undertake another two International tech
parks planned for Kolkata and Pune.”

The Town Park
Now these concepts are being replicated in smaller towns and second rung
cities. Consider the IT Park in Coimbatore, about 500 km from Chennai, in Tamil
Nadu. Spread across 150 acres of land, it boasts of a communication satellite
earth station, fibre optic connectivity, health clubs, meditation centres, a
business centre and four seminar halls among others. Thanks to the single window
clearance process, all one needs is to write a cheque for the required space and
start an IT or BPO business. This is the reason why KG Information Systems, Asia’s
largest medical transcription company is based in Coimbatore and employs more
than 1,000 people at the park.

Other states are also hopping onto the IT bandwagon, with Kerala being a
prominent one of them. The existing 180-acre Techno park at Trivandrum is being
expanded. Three new tech parks are coming up. A 200 acre park at Kochi will
offer 10 mn sq ft of space. Another park being set up by a Kerala
entrepreneurship, the Muthoot Group, will have 300,000 sq ft of space. And an
NRI group is setting up a third IT park, spread over 500,000 square feet.

The Punjab government is setting up two tech parks-a 15-acre IT park
offering 1.5 mn sq ft of space; and another 50 acre park with 1.7 mn sq ft of
space at Mohali, on the outskirts of Chandigarh. A 400-acre cyber city is coming
up in north Goa, to supplement a 75 acre IT park in the state capital, Panjim.
Engineering giant Larsen and Toubro is building a 200,000 square feet IT park
and a 50-acre IT village in Vishakapatnam, on the eastern coast. Also on the
eastern coast, Orissa has two tech parks-the 205-acre Infocity which is
located just outside the city, and the 3,50,000 square feet Fortune Towers
situated in the city premises.

-Anshuman
Magazine, managing director, CB Richard Ellis, South Asia

“An
important reason why IT companies prefer tech parks is because they
can customize their offices according to their specific needs”

The concept of tech parks is spreading to even third rung towns. Nashik,
about 200 km from Mumbai, was known for grapes and as a pilgrimage centre for
Hindus. Now, some of the biggest players in the BPO sector, such as WNS Global,
have located their processing centres there. Similarly, cheap Air Deccan flights
have made the municipal corporation of Hubli, a town located about 500 km north
of Bangalore, dust up plans of their plans for an Infotech Park.

Initially, state governments struggled to sell smaller destinations to
customers. But once the pioneers set the trend, others usually follow. When
Maharashtra Industrial Development Corporation (MIDC) first tried to promote the
Infotech Park in Talawade near Pune, it did not receive much attention. But once
Kanbay, a Chicago-based IT consulting firm focusing on the financial sector
moved in, the scene changed. Kanbay’s e-solutions center in Talawade now
houses almost 2000 employees. Global IT majors Syntel and Xansa followed suit.

Warning Signals
The rental rate in Talawade Infotech Park, of about Rs 13 per sq ft, is half
of the rate of Rs 25 per sq ft that the CIDCO Infotech Park, situated at
Vashi-Belapur near Mumbai, commands. For IT companies that do not see any
particular advantage in being close to cities such as Mumbai and Bangalore, the
cheaper costs in hi-tech cities springing up in the hinterland are a boon. The
Techno Park in Jaipur costs as low as Rs 8.50 per sq ft in monthly rentals.

While the boom happens, market watchers warn that cities should be quick
enough to capitalize on that. Says Ramesh Nair, associate director-Corporate
Solutions, Jones Lang LaSalle India, “The developers need to become
pro-active with their projects and should build the facilities. But we see many
of the developers sitting on the projects asking to bring in the companies
first, so they can start building the facilities later. But companies scouting
for office space want ready built facilities. This is indeed one area the
developers need to look at, and adapt to the changing scenario.”

Nair also voices his concern over the spiraling land prices in cities like
Chennai. For instance, in the IT Corridor the land prices have multiplied by
many times and many of the developers pull back after hearing inflated prices.
Says Nair, “The government should put in place a land regulation act and
provide cheap land for developers. This will foster more developers to jump into
building office spaces and will drive overall development in this space.”

Hot
Destinations for IT Parks

IT Park

Developer

Area

Status

Occupying Companies

Kolkata

Rajarhat Sunrise City

West Bengal Government

40 acres

Upcoming

Wipro, HSBC, GE, Cognizant, TCS

Rajarhat New Town

West Bengal Government

200 acres

Upcoming

 

Bengal Intelligent Park

West Bengal Government

6 lakh sq ft

Running

SkyTech, IBM

Bengal Intelligent Park

West Bengal Government

0.75 lakh sq ft

Upcoming

 

DLF IT Park

DLF

13 lakh sq ft

Upcoming

 

Infinity Benchmark

Infinity Infotech Parks

5.5 lakh sq ft

Upcoming

 

Infinity Waterside

Infinity Infotech Parks

5.3 lakh sq ft

Upcoming

 

Infinity (Tower I & II)

Infinity Infotech Parks

3.6 lakh sq ft

Running

Lexmark, AIG, Bharti Cellular, HCL
Technologies, Calakol, Nortel

Technopolis

Phoenix Software

6.75 lakh sq ft

Upcoming

 

The Hub

 

3 lakh sq ft

Upcoming

 

Millenium City

 

4.2 lakh sq ft

Upcoming

 

 

Ascendas

20 lakh sq ft

Upcoming

 

 

Videocon

20 lakh sq ft

Upcoming

 

 

Unitech

20 lakh sq ft

Upcoming

 

 

Keepeland

20 lakh sq ft

Upcoming

 

Pune

Marigold

Vascon Engineers Ltd

 

Running

MphasiS, PTC, Mastek, Red Hat India,
S1, E2E Serve, Saama, Cybage, Capsilon, SerWizSol

Magarpatta City

Magarpatta Township and Development
Ltd

 

Running

EXL, Aviva, Sybase, Avaya, Amdocs,
Patni, WNS, John Deere, Mellon

Cerebrum Park

Kumar Builders

 

Running

Mastek, Cybage

Weikfield IT Citi Info Park

Vascon Engineers Pvt Ltd

17 lakh sq ft

Upcoming

 

GigaSpace

Kolte Patil Developers

10 lakh sq ft

Upcoming

 

eSpace

Kolte Patil Developers

1.15 lakh sq ft

Upcoming

 

Delta 3

Kolte Patil Developers

4.5 lakh sq ft

Upcoming

 

Gigabyte

Kolte Patil Developers

1.2 lakh sq ft

Upcoming

 

Delta 1 & Delta 2

Kolte Patil Developers

0.4 lakh sq ft

Upcoming

 

Park Street

Pride Housing

10 lakh sq ft

Upcoming

 

Total IT Park Construction

Panchshil Realty

60 lakh sq ft

Upcoming

 

Cerebrum IT Park

Kumar Builders

6.15 lakh sq ft

Upcoming

 

Chennai

The Millennia
Tower

Millennia Realtors

5.5 lakh sq ft

Upcoming

 

Khivraj tech park

 

11.8 lakh sq ft

Upcoming

 

 

ETL Infrastructure

5.15 lakh sq ft

Upcoming

 

International tech park

Ascendas

4.82 lakh sq ft

Upcoming

 

 

Mahindra City

3 lakh sq ft

Upcoming

 

 

Vishranthi Homes

3.85 lakh sq ft

Upcoming

 

Tidel Park

ELCOT, TN Government

 

Running

TCS

 

Harinder Singh

4.20 lakh sq ft

Upcoming

 

 

Srinivasa Shipping and Property
Development Limited

2.5 lakh sq ft

Upcoming

 

 

Rajyog Constructions

2.75 lakh sq ft

Upcoming

 

As tech parks continue to expand and new ones begin to sprout, they are
redefining the concept of quality business space for Indian and foreign
companies in other sectors. Gurgaon’s BPO cluster, for example, is setting
benchmarks for companies in other sectors like auto components. In Mumbai,
healthcare, financial service and infrastructure service companies that are
moving to the emerging business district of Bandra-Kurla are benchmarking their
new headquarters with those in tech parks in Bangalore and Hyderabad.
Mushrooming tech parks is good news for India as it will help retain the country’s
cost advantage.

Rajneesh De With
Inputs from Srikanth G and Shipra Arora

High Five

  • Jammu & Kashmir recently
    announced that an IT Park would be established in Ladakh, a region with few
    inhabitants, boasting of an average height of over 10,000 feet above sea level
    and rarefied glacial air.

  • A relatively IT backward state,
    Uttar Pradesh now wants to turn five of its cities into "IT Cities",
    and in 2004, roped in corporate honchos to help the state plan these cities

Enter Singapore

  • Global players like GE and
    Singapore-based business space provider Ascendas, among others, have also joined
    the fray. When Ascendas added a new building called "Inventor" to the
    sprawling complex of the International Technology Park, Bangalore, the Deputy
    Prime Minister of Singapore Tony Tan flew into the city to inaugurate it.

Reinventing the Park

  • The Rajarhat project in West
    Bengal will have retail stores and entertainment facilities and a 5,00,000 sq ft
    open-air landscaped podium, ATMs, gyms and even a multiplex. Touted to be the
    largest IT park in Kolkata, Rajarhat spans an area of 1.3 mn sq ft and can
    accommodate 20,000 executives.

  • The 400 acre Magarpatta City in Pune, with a
    tech park called Cybercity Magarpatta, is a modern township built around a
    cybercity. It functions on ‘walk to school, walk to work’ concept. The
    township boasts of a golf course, a 25-acre park, food courts, health clubs,
    lakes, schools, a mall and swanky residences with solar heaters and water
    recycling plants-almost everything that defines good life.

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