The Central and state governments' policies have changed the IT and non-IT office space dynamics in the country.
According to Nitika Masih, assistant manager, Jones Lang LaSalle-Meghraj, "Government sops by way of tax benefits, higher floor space index (FSI) and setting up of single window agencies which are incentivising developers to build more space. They are developing more IT spaces. This is changing the IT and non-IT office space dynamics."
"This has resulted in the hyper growth of real estate catering mainly to the IT sector in the cities of Bangalore, Chennai, Hyderabad, Delhi, Pune and Mumbai. This has also widened the office space rental gap between the IT and non-IT office space in similar or same locations. This has created a great divide between the two," she added.
With this scenario developing in the country, as on December 31, 2007, the total IT office space stock stood at 85 million square feet while non-IT space was 35 million square feet. From 2001 to 2007, IT space grew at a compound annual growth rate (CAGR) of 52 per cent, while non-IT space grew at a CAGR of 14 per cent.
"Based on the current pan-India commercial project announcements of companies, we foresee this trend to continue in the near future," said Nitika Masih, without giving any timelines. Presently, among the IT office space destinations, Bangalore is the most affordable with the lowest rentals.
The city quotes between Rs 28 per square feet per month and Rs 48 per square feet per month. Chennai is second after Bangalore with Rs 30 per square feet per month to 48 per square feet per month, followed by Hyderabad at Rs 32 per square feet per month to Rs 48 per square feet per month, Delhi at Rs 35 per square feet per month to Rs 70 per square feet per month, Pune Rs 38 per square feet per month to Rs 46 per square feet per month and Mumbai Rs 45 per square feet per month to Rs 90 per square feet per month.
In non-IT office space, rentals in Hyderabad are lowest compared with other cities. Rentals quoted here is Rs 40-60 per square feet per month.
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Bangalore is second with Rs 50-70 per square feet per month and is followed by Pune at Rs 50-75 per square feet per month, Chennai at Rs 55-65 per square feet per month, Mumbai Rs 80-110 per square feet per month and Delhi Rs 110-160 per square feet per month.