A brand new office district with over 20 million sq ft of IT SEZ space is in the works in Gurgaon that could extend the axis of development in the city.
Gurgaon-based builder IREO and a joint venture of Singaporean IT park specialist Ascendas and sovereign fund GIC are separately planning to build IT SEZ space in a large master planned development on Gurgaon’s Golf Course Extension Road on the southern edge of the city.
At present, the largest office space conglomeration in Gurgaon is the DLF Cyber City that stands at the entrance of the city on the National Highway 8. It has about 13 million sq ft of space built by DLF over the past 15 years but is nearing saturation in terms of leasable space with under 10 per cent vacancy level, according to property advisory firm JLL.
In this new development, IREO plans to build about 12 million sq ft of IT SEZ space over 85 acres in the Golf Course Extension Road area, spending Rs 5,500-6,000 crore on it. It will start with a million sq ft development in the first phase.
Ascendas India Growth Fund, which includes Ascendas and GIC, on the other hand, will build about 8 million sq ft of IT and commercial mixed use space that will include IT SEZ, retail amenities, corporate office and some hospitality elements with a project cost of Rs 2,500-3,500 crore. This will be over 60 acres. It will start with a 1.3 million sq ft development in the first phase.
Lalit Goyal, vice chairman and managing director of IREO, a private equity fund which has invested in its own development arm, said the IT SEZ capacity in Gurgaon is almost over and there is enough demand for a large development like this.
“We are both FDI companies and we will ensure that this development can be benchmarked with any other international development of this type,” said Goyal.
While each of the two will build on their own, the larger development on the two contiguous parcels of land will be according to a common infrastructure master plan that will ensure it will be a highly planned development.
Goyal said the development will have international specifications and include traffic planning, state-of-the-art infrastructure. Traffic studies for this office district have already been completed and roads and other infrastructure will be built accordingly.
Sanjeev Dasgupta, the chief executive officer of Ascendas Property Fund India said SEZ supply in Gurgaon right now is fairly tight and it doesn’t look likely that there will be space available around Golf Course Road and Golf Course Extension Road. “Our belief is that this area in terms of connectivity and infrastructure will be better than the Udyog Vihar side (of Gurgaon) which is increasingly becoming congested,” he said.
Ascendas, he said, has already started getting interest from tenants for this location.
What will also work for the area is the fact that the metro railway phase that is currently under construction will stop at the edge of the Golf Course Road, about a kilometre away from this new office district and it could be extended further. Goyal of IREO said Gurgaon does need another big office district. Analysts and real estate watchers agreed.
Anckur Srivasttava, chairman of GenReal Property Advisers, said this new move will change the development axis in Gurgaon over the medium term and also improve end-user attraction for housing in and around the Golf Course Extension Road and the Sohna Road area.
Mayank Saksena, managing director, land services at JLL said the city of Gurgaon is currently lopsided in terms of office space development, with Cyber City at one edge. “This new office district will balance it. The moment you have this, south of Gurgaon, which is more affordable, will start growing and it will also reduce the stress on NH8,” he said.
The overall Gurgaon market currently has about 56 million sq ft of office space, of which 13 million is in Cyber City. Of this, 38-40 million sq ft of space is in the IT/IT SEZ segment.