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Mr Ramalinga Raju, Chairman, Satyam Computers, Ltd, greeting Mr Krishna Reddy, Chairman, Kousalya Constructions, at the inauguration of Satyam Computers' development centre at Sholinganallur in Chennai on Monday. Looking on is the Tamil Nadu IT Secretary, Mr Vivek Harinarain. — Shaju John

Chennai , June 28

"IF you are not in India today, you may as well not be in business," says Mr Pol-Henry Cox, Managing Director, Jones Lang LaSalle, an international property consultant.

Real estate development in India is estimated to be in the region of $12 billion, growing at a rate of 30 per cent every year. Almost 80 per cent of all real estate developed is residential. Of this $10 billion is residential space and the rest office, shopping malls, hotels and hospitals.

The double-digit growth has been attributed to the offshoring business, which in 2003 accounted for 10 million square feet. The two other segments that have driven the business are organised retail and residential space.

In India, Chennai has been projected as the most attractive destination for investment to all our clients, said Mr Cox.

He was speaking to presspersons here on Monday at the inauguration of the city's first build-to-suit facility for Satyam Computer Services Ltd at Sholinganallur on the Old Mahabalipuram Road. The 1.5-lakh square feet office space, developed by Ascendas Pte Ltd, was constructed at a cost of Rs 35 crore.

Mr Cox said that the research done by Jones Lang LaSalle had shown that Chennai was the destination of choice for IT and information technology enabled services (ITES). The reasons were that almost 5 million square feet of space has been identified for development for this sector, the city also had a solid well-managed industrial base and an educated workforce.

Mr Cox said that Chennai has a large pool of educated work force with strong work ethics so the attrition rate was lower than in other cities. The average worker is conservative and would not jump jobs for a "few rupees more", he said.

Though there was potential for growth in outsourcing, call centres and other ITES, the quality of real estate available was not sufficient to match the demand of the IT industry, he said.

He said the Government plays a crucial role in the development of real estate by facilitating acquisition of land and tax restructuring. Government should improve the infrastructure such as road, power and public transport, which will encourage foreign investment.

The Government should also promote Chennai as a destination to attract investment.

Mr Cox said that compared to Bangalore, which was a more mature real estate market for IT and ITES companies, land cost in Chennai was lower. In the North, Delhi was the only market for IT investment while Bangalore, Hyderabad and Chennai were competing IT centres in the South.

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