BENGALURU: The appetite for space in special economic zones is on the rise despite the fast approaching sunset date of March 31, 2020, after which new occupiers will not be eligible for direct tax benefits, industry officials said. Among the large corporates that have submitted proposals to occupy space in SEZs are Wipro and IBM, which have applied for office space of over 180,000 sq ft and 280,000 sq ft, respectively, in an operational SEZ in Madhapur, Hyderabad, they said. “The SEZs accounted for about one-third of the leasing activity in 2019, leading to an all-time high absorption of office space in 2019,” said Ram Chandnani, managing director, advisory & transaction services, India, at real estate services firm CBRE South Asia.
According to a CBRE report, gross leasing activity grew by more than 25% year on year to historic high of almost 61.6 million sq ft in 2019 with Bengaluru, Hyderabad, Delhi NCR and Mumbai together accounting for almost 75% of the overall space takeup.
Companies that have recently leased large spaces in SEZs include BNY Melon, Caterpillar, PayPal, Mercedes Benz, Microsoft, Salesforce, Cognizant and HCL, across Hyderabad, Chennai and Bengaluru.
This rush is despite single digit vacancy across major SEZs in the country.
As per real estate services firm JLL India, 16 million sq ft of SEZ space was completed in 2019, while another, 14 million sq ft is slated to be completed in 2020.
“SEZs continues to hold a consistent share in the India office stock with a long-term average share of 25% since 2014,” said Sarita Hunt MD (Bengaluru) at property consultancy Savills India. “Tech cities are likely to continue playing a significant role in the SEZ landscape, having a major share of the upcoming supply. There is mad rush to sign up with no space available,” she said.
March 06, 2020