Lucknow realty firms go for IT

The sector is leaving residential and commercial complexes for newer avenues.

Real estate in Lucknow is reaching sky high, quite evident by the hectic construction activity undertaken in the city by almost every major property developer.

Leaving behind the routine residential and commercial complexes, however, developers are now in search of new avenues "" 'cyber complexes' or more popularly called 'cyber hubs', being recent on the agenda.

Most of the developers have pulled up their socks to charm top information technology (IT) companies in the state, thus providing them favourable environment to set up their work offices in the city.

"Because of high rental and cost of living in the metropolitan cities, many multinational companies and Indian corporates are shifting their operations to Tier III cities like Lucknow, which offers cost-effective office space, modern infrastructure and availability of skilled human resource," Rahul Agarwal, director, Tirath Housing, told Business Standard.

The company is busy with the construction of their project 'cyber tower', targeted for IT/ ITES (IT-enabled services) companies, where they will be provided land on lease with all the facilities for their operations. Spread over an area of 11,000 square feet, it is scheduled to be completed in a year.

An official also confirmed queries from companies like Aegis Communications Group Ltd, IBM Daksh and Siemens for participation in their latest project.

"The advantage for tier II and III cities lie in the fact that whereas the office rental charges in metros ranges from Rs 200-300 per square feet per month, in Lucknow and around it is Rs 30-60 per square feet only, thus cutting the cost of living," Agarwal added.

Besides, Ansal API (Ansal Properties and Infrastructure) has dedicated about 52 acres for setting up an IT SEZ in its upcoming Sushant Golf City on the Lucknow-Sultanpur road.

"Lucknow offers great potential for IT companies and for their smooth functioning within the city, we propose to offer 24-hour uninterrupted power supply," Anurag Trivedi, manager, sales, Ansal API, said. However, the officer agreed to disclose the names of the interested parties, only 'once the deal is finalised'.

Currently, approximately 100,000 square feet is taken up by the IT and ITES companies in Lucknow. This is expected to increase manifold in the near future. "Companies are very keen on Lucknow as an IT destination, lower rental charges being the major reason. If things fall in place, 500,000-600,000 square feet more could be absorbed by them in the near future," said a property broker based in the city.

The interested parties, according to the consultant, include around four multinationals and eight private Indian companies. Tata Consultancy Services (TCS) is also expanding its workforce from its current 250 to 1,000 employees and is busy bringing out a new office at Gomtinagar in Lucknow.

Spread over an area of 225,000 square feet, it will be developed as a software development centre.

Besides cyber complexes, a software technology park is also in the pipeline in Lucknow, which will function for software export benefit operations. The park is a TCS venture. Spread over an area of 5 acres, it is aimed to promote development and export of software and software services through technology assessments, market analysis, marketing segmentation, marketing support, etc.

"One of the basic requirements for the IT sector to boom at a place is the ample presence of qualified persons which is the basic raw material for the industry. With top of the line academic institutions like IIM Lucknow and IIT Kanpur and a rich recruitment belt, Lucknow provides an excellent destination for the IT and ITES industry," Jayant Krishna, principal consultant and centre head, TCS, Lucknow, said.

"We need more initiatives to check migration from the state to the ever attracting national capital, as the investors will have more options now," Agarwal added.

But what about the lingering negative perception of lack of basic infrastructure requirements likes roads and power in the state, because of which the top companies shun away from the state for investments.

"At least in Lucknow, the power condition is good enough to support such an infrastructure. Also the road conditions, when compared with other cities are far better. Saturation in tier I cities is another factor, compelling the top IT companies to look out for new destinations. Besides Lucknow, Allahabad, Kanpur and Varanasi could be other favorite spots," Krishna added.

"We carried a survey involving top IT companies to recognize their demands and interests along with their respective perceptions about Lucknow as IT destinations. The results are quite encouraging," informed Saumya Jauhari, Public Relations Officer, Tirath Housing.

Additionally, the recent emphasis of the state government on e-governance and offering the citizens an online interface with right to information, offers a huge business opportunity for the IT companies.

"There is every indication of Lucknow's emergence as a 'hot and happening knowledge city of the future'. This is well reflected in the Lucknow vision 2020 finalised by the Government. Now our Government needs to catalyze the process together with the industry. This would surely skyrocket Lucknow's brand equity as a many splendor mega city on the move," Krishna said.

However the developers have put forth their grievances to the state government to consider them as well for incentives, particularly engaged in building cyber spaces.

"Although exiting industrial policy does not support the real estate developers, this can be worked out in future," V.N.Garg, Principal Secretary- Information Technology, U.P. Government said.