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Vizag The Next Sought-after IT Spot
Posted by Pradeep Sadanapalli | July 4, 2008 | 1,448 views
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Loading ...Visakhapatnam is emerging as the next best investment destination in Andhra Pradesh after Hyderabad. Availability of skilled labour, infrastructure and comparatively cost-effective real estate in the city makes Vizag an ideal location for IT companies.
It is expected to be one of the next growth drivers in the coming decade. Besides, the city’s retail property market is also picking up with six malls expected to be operational by 2010, according to a property report by Jones Lang LaSalle Meghraj (JLLM).
Development of a greenfield international airport and a new seaport at Gangavarm will be the added attraction as it will help fuel trading activities. “Satyam has 1 lakh square feet facility in Vizag. The company is also developing an SEZ in the city. Wipro’s facility is also under development, while HSBC has a large BPO centre operational in the city. Besides, IBM Daksh and EDS are planning to expand their operations to Vizag,” said George Johnson, regional director, JLLM.
According to him, the demand for real estate by IT companies is expected to go up in future. “With an expected global slowdown, IT companies will look at reducing their cost of operations and Vizag will be an ideal location for them as real estate prices are cheaper here compared to Hyderabad. Even with a normal growth rate, companies will find this place attractive as it offers a good talentpool. Besides, attrition in tier-II cities will be lower compared to tier-I cities like Hyderabad,” he said.
The report suggests that the state government is also pro-active in attracting IT/ITeS companies to Vizag. The government has planned a 2,000-acre IT layout in Rishikonda, 10 km from the city. Kenexa has already started operations in this layout and other companies such as Infotech, Symbiosis, IBM and Oracle are expected to start operations soon, said the report.
The state government has allocated over 20 hectares to Satyam for developing an IT SEZ in Vizag. Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is setting up two IT SEZs and it has received 16 hectares and 36 hectares respectively near the city. Ramky Group is developing an SEZ — Jawar Pharma city — and Biocon has already announced to open a facility there with an investment of 1,000 crore. The government has also allotted 1,700 acres to Unitech to build a knowledge city.
“Vizag has pipped Vijayawada in terms of IT investments mainly due to talent availability. Vizag is already home to Vizag Steel Plant, HPCL, NTPC and Bharat Heavy Plates and Vessels (BHPV), which helped the city grow. Eastern naval command also has a base there. This has triggered the growth of educational institutes whereas Vijayawada mainly comprises a trading population. Vizag has over 20 lakh population as against 10 lakh in Vijayawada, making it easy for companies to scale up their operations,” said Johnson.
The JLLM report indicates strong investments across sectors in Vizag. The total Grade A commercial space in the city is about 0.15 million sq ft with current rentals ranging from Rs 20- 25 per sq ft per month.
The retail market is also showing an upward trend. “Currently, the city has no operational malls, but there are six malls under various stages of construction expected to be operational by 2010. Of these, three malls totalling a built-up area of 4,00,000 sq ft will be operational in the next 15 to 18 months,” the report said.
VANTAGE POINTS
- Development of a greenfield airport and a seaport at Gangavarm is turning to be an advantage
- With global global slowdown, IT companies are looking at ways to reduce costs
- Vizag will be an ideal location as realty prices are cheaper when compared to Hyderabad
- There is a good talent pool here
SOURCES:
Economic Times
Topics: Reports, Information Technology |
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