2007 to witness a boom in commercial space

Bangalore, Dec 31: Fuelled by foreign investments, the real estateindustry in the country, especially the commercial space is likely towitness a boom in 2007 with the growing Indian economy, especially theIT sector clamouring for more space across the country.

''India is a hot market and currently an investment fund of overUS Dollars 500 million is waiting on the wings for invesment in thesector, especially for commercial space and the potential was nearly usdollars 20 Billion'', Mr Prakash Gurbaxani, CEO of TSI Ventures toldUNI in an interview.

He said with the sector opening up for FDI in 2005, this year mostof the financing companies firmed up their offerings and groundbreaking projects for these investments was expected to take place from2007 onwards.

Besides the IT.BPO sector, the growing retail market, Hospitalitysector, residential homes and demand for other commercial space wasfuelling the growth he added.

Though only a handful of foreign real estate developers havepitched their tent in India for a long time play, the FDI flow in thesector was mostly from financial institutions, Mr Gurbaxani said.

Bangalore, Hyderabad, Pune, Chennai, Kolkotta, Mumbai and Delhiwere the key areas where the growth was witnessing. Besides thepotential was there in 30 other cities, he added.

Mr Gurbaxani said out of 25 to 26 million sq ft of business area leasedin the country in 2006 Bangalore alone had a share of one third andnext year the expected demand was 30 million sq ft and Bangalore wouldhave a major part of it. He said TSI Ventures (India) Private Limited,a joint venture between Tishman Speyer and ICICI Venture will start wonon its first project in the country coming up in Hyderabad in thesecond quarter of 2007. With an investment of US dollars 100 millionTSI would in phases develop 1.5 million square feet of Class A officespace at Gachi Bowli area of Hyderabad. The first phase providing aboutone million sq ft would be ready by 2009, Mr Gurbaxani said.

TSI ventures was also planning integrated townships in majormetros of the country and talks were on in Bangalore, Delhi, Mumbai,Chennai and other areas both with governments and landowners, he added.

The Hyderabad project would be the first Asian investment forTishman Speyer - the New York based developer and owner of signatureproperties that is already active in North America, South America andEurope. The company also expected to invest in China in the near future.

Formed in August 2005 TSI Ventures, based out of Bangalore,specialised in developing "Destination" properties that are trulyworld-class. '' We are not only interested in funding realty projects,but alo are keen to top class projects ourselves'' he added.

According to another survey Bangalore had gobbled up 12 million sq ftof space in 2006 with the IT/ITES companies continuing to play asteller role. R and D centres of manufacturing companies, retail,banking and finance sectors have also staked a claim to the city'soffice space. According to industry sources office space developershave initiated construction of as much as 21 million square feet during2006 in view of the growing demand. Of this, nearly 7 million squarefeet was made available till the end of the third quarter of thecurrent fiscal, while the balance is scheduled to be for completed by2007 and 2008.

A report release by Knight Frank India said an estimated 103million square feet of new office space is likely to hit the Indianmarket by 2008. Bangalore tops the chart with 19 per cent share ofthis, followed by Hyderabad 15 per cent, Chennai 14 per cent, Mumbai 13per cent, National Capital Region 12 per cent and Pune and Kolkata 8per cent each. The balance was accounted for by Chandigarh, Mysore,Jaipur, Indore, Nagpur, Coimbatore, Vishakhapatnam and Kochi.

The city has been undergoing a considerable change in itsdevelopment profile, which has been reflected in the emergence of newgrowth centres.

UNI