Booming real estate cities

The reality of non-metro cities – Tier II and Tier III cities in corporate jargon –like Pune, Mysore, Visakhapatnam, Bhubaneswar, Chandigarh, Coimbatore and Jaipur, fast emerging as the new IT hotspots is dawning on IT and BPO majors sooner than expected. For, these cities are witnessing a surge in infrastructure development—telecom, power, construction, facility management, transportation, catering and other services. And, they are on the radar screens of IT majors like Wipro, Infosys, TCS, HCL Technologies and Satyam, who have already set up or are planning to build large IT campuses.

These new cities, says Sunil Mehta, vice-president, Nasscom, are fulfilling the requirements that IT companies look for when deciding on expansion, namely availability and costs of labour and real estate, business environment as well as physical and social infrastructure. Consider this. Software exports from these cities have shown a dramatic increase from a mere 5% a couple of years ago to 15-18% at present.

They are now set to go up to 25-30% by 2010. Bullish on their prospects, the world’s leading real estate consultancy firm, Jones Lang LaSalle, projects that a couple of them could mature into major centres over the next five years.

“These new IT hotspots are expected to employ 30% of the projected strength of 850,000 IT professionals and 1.4 million ITeS-BPO professionals by 2010,” estimates Mehta.

The offshore IT and BPO industries directly employ around 700,000 professionals and provide indirect employment to approximately 2.5 million workers.

Mehta cites a balanced regional development, in addition to all round infrastructure development, as key benefits of this fast-growing trend. Besides, these cities have built primary infrastructure that has fostered several IT centres. On their part, the respective states have pitched in by providing various sops and a regulatory environment.

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