With a significantly large English-speaking workforce and technically skilled manpower available at relatively affordable costs, India rose to fame as an offshoring hub. The term ‘Bangalored’ - coined for the country’s preferred offshoring destination – reflects the global impact of India’s IT industry.
With revenues of around $160 bn and the IT industry undergoing transmutation from low-value offshoring processes to high-end analytics functions, it seems like a good time to look at some key office corridors that have become synonymous with our IT industry.
Reflecting the huge demand that comes from technology occupiers, both global and domestic, approximately 70% of India’s commercial Grade A stock comprises of IT and SEZ developments. Each of the major cities has prominent corridors preferred by the IT industry.
The OMR pre-toll location sees the maximum traction from the IT industry, with rentals as high as $1.24 per sq. ft. per month. This IT corridor consists of Grade A buildings with easy access to the city centre. Proximity to good social infrastructure also helps it to remain a location of choice for major MNC firms. With limited vacancy and no new upcoming office buildings in the future, the rentals in this corridor are expected to rise.
With 92 million sq. ft. of IT-specific real estate inventory in the market, Bengaluru takes top spot as a leading IT destination. Accounting for the presence of over 35% of all IT companies in India, including a mix of MNC back offices, captive back offices and Indian tech giants, the city is undoubtedly the largest contributor to the IT market in terms of space take-up. Major IT corridors include the entire Outer Ring Road (ORR) corridor and Whitefield. ORR is the most expensive, with rentals rising to $1.24 per sq ft per month.
Increasing real costs are resulting in creation of newer IT corridors within the larger cities as well, with development moving further away from the city centres for offshoring occupiers. The talent and infrastructure in select Tier 2 and 3 cities will also be attractive for IT occupiers for undertaking entry-level outsourcing work, and the affordable real estate costs in such cities will also be an added incentive for them.