Tata Realty and Infrastructure plans to launch 5 million square feet (msf) of office space in Bengaluru, including two IT parks, with an investment of Rs 4,000 crore by the end of this year.
The company is currently foraying into cities such as Bengaluru, Hyderabad and Pune for its commercial segment, Ritesh Sachdev, Senior Vice President and head of commercial leasing and asset management at Tata Realty told Moneycontrol.
"The company plans to develop about 8 msf of office spaces in Bengaluru and Pune with an investment of Rs 6,000 crore. Additionally, we will grow our commercial portfolio substantially from ~7.6 msf today, within the next six years across major cities in India," he added.
Sachdev said Tata Realty plans to continue developments in Tier I cities, with an exception for Kolkata owing to poor supply-demand dynamics in the city's real estate sector.
For Bengaluru, the company plans to launch at least two IT parks in the office segment.
The launches will sprawl across about 30 acres and will be taking place in the northern part of the city like Hebbal and the eastern IT corridor of Whitefield. "We are also looking at the outer ring road (ORR) and Sarjapura road, however, the infrastructure is still a challenge in these areas, other than high land costs," he added.
Last year September, Bengaluru saw major waterlogging in parts of ORR and Sarajapura that led to a loss of Rs 225 crore for the IT companies along the stretch.
For Pune, the company plans to invest Rs 2,000 crore to add 3.5 msf in the non-IT commercial segment branded as Intellion Edge. About five years back, the company rebranded their commercial segments under Intellion, with the IT parks being called Intellion Park and the smaller office spaces called Intellion Square.
"In Pune, we are targeting the established office locations. The east corridor is saturated and I think the west will be the next growth corridor. For Hyderabad, we are selectively evaluating deals in the IT corridor. However, the city is currently saturated," Sachdev said.
Currently, the company has a presence across three key markets of Chennai, Mumbai and Gurugram sprawling 10 msf.
"We already have about 4.5 msf flagship office park in Chennai and we have another 3.5 msf in Gurgaon. We are developing the largest development to date in Navi Mumbai which is about 7. Additionally, we are also developing about 1.6 msf of smaller office space in Gurgaon. And we have a small IT park development in Mumbai's Malad," he added.
With the global headwinds slowing down the real estate sector globally, Sachdev added that the recovery in the commercial segment was encouraging last year.
"The absorption was about 50-60 msf last year when we already did more than 60 msf in 2019. Due to the slowdown in the US and European market coupled with the Ukraine-Russian war, we will see slow absorption in the second and third quarter of this month for the commercial segment," he said.
However, the banking and manufacturing firms will lead the demand, with global capacity centres (GCCs) and the semiconductor industry playing a large role in India's commercial sector.
This is an updated version of the story.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
