The Hindu Business Line : Construction of non-IT office space on the rise

Good prospects
Construction of non-IT office space this year is destined to cross the 4-lakh sq ft mark, industry sources say.
In the next two years, however, a number of developers will be putting their money in the non-IT segment.
The Merlin group will build Acropolis near Ruby hospital with 4 lakh sq ft of office space.

Manish Basu

Kolkata, April 3 Construction of non-IT office space is fast catching up with its IT counterpart in Kolkata, thanks to increased activity in fields such as the financial sector, consumer goods, steel and media.

Construction of non-IT office space this year is destined to cross the 4-lakh sq ft mark, industry sources say. “The big push in this field started from the middle of 2007 when there was an acute shortage of non-IT office space. Before that, there was a situation of over-supply to the non-IT sector since the segment was not picking up and the economy was going through bit of a poor patch,” said Mr M.S. Mohta, Director, Merlin Projects. It was much more profitable then to build hotels, high-value residential projects and IT office spaces in premium locations, he said.

In the next two years however, a number of developers will be putting their money in the non-IT segment. The Merlin group will build Acropolis near Ruby hospital with 4 lakh sq ft of office space. Almost 90 per cent of this will be occupied by non-IT companies, Mr Mohta said. The South City projects will also come up with 5 lakh sq ft of office space in three plots near the Ruby crossing, he added.

The Rungta Group will add 2.5 lakh sq ft in Rajarhat, Unitech about 1 lakh sq ft at the Rashbehari-Eastern Bypass crossing, and Keventer projects another 1 lakh sq ft on AJC Bose Road. The Shrachi group is also coming up with the Synthesis Park in Newtown with 5 lakh sq ft for the non-IT sector.

While IT companies with only similar technology requirements club together, bringing a variety of non-IT companies under the same roof is easier, Mr Pradip Sen of the Kolkata-based Jain Realty said.

Commensurate with the rise in demand, rents are also moving northward, said Mr Abhijit Das, Regional Managing Director, JLL Meghraj.

“The rents in the business districts such as Park Street, Theatre Road, BBD Bagh have jumped from about Rs 80 per sq ft last year to Rs 150 this year which has been entirely demand driven” he said.

The non-business district areas such as the Eastern Bypass, Rajarhat, are fetching rents in the range of Rs 50-80, said Mr Rahul Todi, Managing Director of Shrachi Group.

The companies, on their part, however feel, getting an office space is still not a problem in Kolkata. “We have easily found space in places like BBD Bagh, Chowringhee and Salt lake recently,” said Mr Sbaranjan Patnaik of Max New York Life. Rents beyond Rs 100 per sq ft in the business districts are however unviable because with such high rents, “the break-even time gets pushed back”, he said.

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