Information Technology companies are the largest office space occupiers in low-cost markets like Navi Mumbai and as much as 76% of commercial space in Navi Mumbai is occupied by IT and IT-enabled services companies, said property consultant JLL India.
Banking, financial services & insurance sector and manufacturing & industrial sectors each occupy 8% of commercial spaces leased in Navi Mumbai.
In the IT/ ITes value chain, business process outsourcing (BPO) call centres are most sensitive to costs, as they operate on a $1 real estate cost strategy (i.e. the real estate rent of 1 sq ft should not exceed the US dollar exchange value of Rs 65). BPOs are followed by knowledge process outsourcing (KPO) firms and software design firms, which operate on slightly better margins.
“In Navi Mumbai, software technology parks of India (STPIs) and IT-special economic zones (SEZs) prove to be very attractive for such IT/ ITeS players due to the inherent benefits in operating out of these. That is the reason behind around 95% occupiers being based out of STPIs and IT-SEZs from the total office stock in Navi Mumbai,” said Ramesh Nair, COO – Business & International Director, JLL India.
Moreover, banks’ back offices / data processing centres that fall under the BFSI classification prefer Navi Mumbai, and many operate out of IT buildings. A variety of reasons like this region’s better infrastructure, lower office rentals, connectivity to Mumbai and other areas in Mumbai Metropolitan Region (MMR) as also a high density of professional and higher education institutes lead to this preference for Navi Mumbai, he added.
The common perception about Mumbai is that though it is India’s financial capital, it has no major Information Technology (IT) presence. Although that is true for the Island City, the Navi Mumbai sub-market more than makes up for Mumbai’s lack of a strong IT footprint.