Tomorrows Metros

The cities of Nagpur and Kochi are witnessing robust real estate development
across various sectors. Both cities have made their place on the list of the new
hot spots for investment in India, leveraging their inherent strengths and
development initiatives which seek to capitalize on these advantages. The
literacy level in both cities is about 90% and the majority of the population is
less than 35 years old. Both cities house a large number of colleges and
institutions that impart professional education and provide a sizeable
English-speaking talent pool suitable for the IT/ITeS sector.

Traditionally, Nagpurs economy was primarily driven by manufacturing and
export and trade industries. However, the last two decades saw Nagpur emerge as
an educational center for engineering. The city hosts excellent physical
infrastructure due to the competitiveness of its urban local bodies (Nagpur was
the first city to privatize the maintenance and construction of intra-city
roads). Similarly Kochi scores due to its burgeoning middle class population and
investments led by repatriation of NRI earnings from abroad.

Over the past few years, both cities have been gaining presence on the IT/ITeS
business map of India. This is due to the large operational cost savings,
availability of fresh talent and the possible tie-ups which the IT companies can
forge with the educational institutions in Nagpur and Kochi. At present, the
total Grade A and B office stock in Kochi and Nagpur is about 0.8 mn and 0.25 mn
sq ft respectively. This is expected to rise to 2.0 mn and 0.7 mn sq ft
respectively by end-2008. To support this growth, the retail and residential
sectors of both these cities are also witnessing faster growth than ever in the
past.

Nagpur: The MIHAN Boost

Nagpur is witnessing the development of a multi-modal International
Passenger and Cargo Hub Airport (MIHAN) project. The government of Maharashtra
is redeveloping the existing Nagpur airport as MIHAN. This project, spread over
43,000 hectare, is expected to trigger growth in Nagpur. MIHAN has a strategic
location as it is at the geometrical center of the country and is well connected
with railways and roads. Nagpur is also expected to emerge as one of the largest
logistics hubs in the country.

MIHAN will include an international airport, SEZs, IT parks, a health city,
an international school, a captive power plant, manufacturing units and a
railroad terminal. The project is expected to complete in the next 5-6 years.

This project is to be developed over a total land area of 4,025 hectare, out
of which 2,086 will be used for the SEZ. Till now, 2,468 hectare has been
acquired. Approximately 1,300 hectare has been allotted for real estate
developers and IT companies.

Leading IT companies registered in the MIHAN SEZ include TCS, HCL Technology,
Satyam Computers, Wipro, and Hexaware. Leading Developers like L&T
Infrastructure Development Projects, DLF, Shapoorji Pallonji & Co, Ascendas,
Ambuja Realty Development, RMZ Corporation and Karamchand Realtech have been
allotted land for setting-up IT parks in the MIHAN SEZ.

Nagpur Tech Park

Kochi: The Smart City

The Smart city project, an IT/ITeS hub is being developed by the Dubai
Internet City Group developer in Kakkanad in the suburbs of Kochi.

At present Kochi has 0.8 mn sq ft of Grade A and B office space, which is
concentrated in Kakkanad. The prominent occupiers present in this region are TCS,
CTS, Wipro, and Sutherland Global. About 2 mn sq ft of Grade A office space is
under construction in this precinct which is expcted to be completed by end of
2008. Of this, 1 mn sq ft of Grade A space is being developed by IT major Wipro
as a part of its campus development. This will be the largest Wipro campus in
the state.

The smart city project is to be developed over 1,000 acres, out of which 200
acres has been acquired. The project will be completed in two phases and is
expected to create more than 1 lakh new jobs in the first phase and around
500,000 jobs over the remaining ones. On the whole the smart city will give a
tremendous boost to the states image as an IT/ITeS destination. It will provide
an opportunity for Kerala to compete with its neighboring states of Karnataka
and Tamil Nadu to attract IT/ITeS business.

Visakhapatnam : Indias Bay Area

Primarily a port city, it is the second IT hub for the state after Hyderabad.
Located along the eastern coast of India amidst the ranges of Eastern Ghats and
bordered by the Bay of Bengal, it is endowed with natural beauty with a
remarkable combination of hills and beaches, making it a tourist destination.
The city has an industrial economic base with large-scale industries like the
Vizag Steel Plant, Hindustan Petroleum Corporation, National Thermal Power
Corporation, Bharat Heavy Plates and Vessels, etc. Moreover, the eastern naval
command of the Indian Navy is located in the city. The presence of these major
industries and naval defence bases caused immigrants from all parts of the
country to head toward Vizag, giving it a cosmopolitan feature.

Vizag has a population of 1.45 mn with a growth rate of 37%. It has a land
area of 1,721 sq km under the jurisdiction of the Visakhapatnam Urban
Development Authority (VUDA), which includes 515 sq km of land area under the
jurisdiction of the Greater Visakhapatnam Municipal Corporation (GVMC). The
citys literacy level is at 70.46%, which is higher than the national average of
65%. It has a proactive government, in which the municipal corporation, urban
development and other authorities collaborate with each other for the overall
development of the city.

Vizag is emerging as the next IT/ITeS hub in Andhra Pradesh after Hyderabad
because of the availability of required skilled labor, infrastructure and
comparatively cost-effective real estate in the city. The government has been
very proactive in attracting IT/ITeS companies into Vizag, with IT firms such as
Satyam, HSBC, Symbiosis Technologies and Phoenix Technologies already operating
in the city. The government has also planned an IT layout at Madhurawada in
Rishikonda, 10 km from the city center. About 2,000 acre of land has been
allocated for this IT layout, which will be used by software companies such as
IBM, Oracle, Infotech, Kanbay, Symbiosis and Kenexa to develop their facilities.
This IT layout is unique in terms of its location, as it will be built on three
hills overlooking the sea. Recently, Kenexa has started its operation while
other companies are in the process of setting up their facilities in the IT
layout. The government also allotted about 1,700 acres of land to Unitech to
build a Knowledge City near NH-5. Meanwhile, Wipro is constructing its facility
adjacent to the Satyam Development Center at the TB Hospital Center.

Currently, the total Grade A commercial stock in the city is about 0.15 mn sq
ft, with one building at Siripuram, the citys CBD, occupied by HSBC. The other
commercial developments are mostly Grade B+ and B standalone buildings with
small floor plates. The current rentals for Grade A space range from Rs 20 to Rs
25 per sq ft per month.

Vizag will witness the development of three IT/ITeS SEZs and will attract
multinational companies to the city. Satyam is developing an IT SEZ at
Totlakonda about 30 km from the city, while the other two SEZs are being
developed by APIIC at Madhurawada. Moreover, the city will witness the
development of a biotech SEZ called Jawahar Pharma City. Biocon, one of Indias
leading biotech operators, has announced that it will develop a manufacturing
facility in this SEZ.

City Infrastructure

Greenfield Port, Airport and Bus Rapid Transport Systemits all happening
in Vizag. To improve infrastructure Vizag has air connectivity with few major
cities in India. Until recently, the Vizag airport supported only daytime
landings. It started the night-landing facility up to 20:00 in the evening to
accommodate more travellers. A new 10,000-ft runway will be constructed for
international flights.

The Andhra Pradesh government has proposed the development of a Greenfield
International airport with world-class facilities in Rayavaram, 60 km from the
city.

Vizag has good road connectivity, with NH-5 connecting Kolkata to Chennai,
and this forms part of the Golden Quadrilateral passing through the city. The
NH-5 is a major cargo-transport route and supports Vizags seaport activities.
The city has good bus service through the state-road transportAndhra Pradesh
Road Transport Corporation (APSRTC)for intra-city, intercity and interstate
connectivity. The city authorities have planned a bus rapid transit system (BRTS)
within the Jawahar Lal Nehru National Urban Renewal Mission (JNNURM), and this
is expected to be operational by 2009. The city is well connected to all parts
of India through a railway system. Visakhapatnam Railway Station is at Waltiar,
and it is an important station in the rail route connecting Chennai to Kolkata.

The Visakhapatnam port, which can draw ships up to a depth of 15.3 m, is one
of the largest ports and oldest shipyards in India. It is on a natural harbor,
which also includes the navy base and a ship-building yard. The Vizag Port is
described as the brightest jewel among all Indian major ports for its
outstanding performance and productivity. As recorded in April 2008, the port
managed 64.59 mn tonnes of cargo from 2007 to 2008, which is 12.5% of the total
cargo handling in India. It witnessed a growth rate of 14.56%, compared with
last years 56.39 mn tonnes. It has location advantage for trading with
Bangladesh, Myanmar and other South East Asian and Far East countries. The port
is being upgraded to handle about 140 mn tonnes of cargo by 2020. A new port,
with the countrys deepest draft of 21 m, is also being constructed in
Gangavaram, which will be able to handle heavy international vessels even up to
0.2 mn DWT ( Dead weight tonnage)2. It will be operational in June 2008.

Vizag houses the Simhadri Thermal Power Plant of NTPC and benefits from
efficient power supply distributed by Eastern Power Distribution Company. The
GVMC is responsible for the citys water supply, distribution and management.
About 440 MLD (million litres per day) of water is drawn from these reservoirs
daily to serve the city. There are also three treatment and filtering plants in
Vizag. The Godavari drinking water supply project is also complete, and will
cater to the future water requirements of the city. The telecommunication
facility in the city is good, with presence of all reputed service providers.
Vizag has a satisfactory social infrastructure, with the presence of schools and
hospitals. There are about ten private and three government hospitals in the
city, including Apollo Hospital, Care and Seven Hills Queens NRI Hospital. In
addition, about 458 schools, including 44 degree and 2 medical colleges, can be
seen in the city. The city also houses two universities, Andhra University and
GITAM, for technical and management studies

Abhishek Kiran Gupta,

The author is associate director, Research & REIS, Jones Lang LaSalle
Meghraj

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