Recent times have recorded growth in the development of campuses for IT or ITES requirements, redefining the role of IT realty heads and showcasing opportunities for stakeholders in the real-estate sector.
Over the past two decades, IT companies have been propelling the employment scenario in India and it is likely to be the largest industry sector in the coming five to six years. Experts indicate that the IT or ITES business will grow well beyond a $200-billion sector. And, this has had an impact on the real-estate industry as well.
In the past five to six years, there has been a growth in campuses for IT or ITES requirements, driven in large part by companies high on recruitment. As Sriram Natarajan, Director-Project Management, CBRE South Asia, says, ¨This includes developments by companies themselves for their captive use as well as developers building speculative spaces and built-to-suit campuses for IT companies.¨ Nagendra Sharma, Senior Manager-Real Estate & Facilities, Oracle India, adds, ¨Further, you save on rentals and other services, and business interdependent teams can be under one roof, enabling more person-to-person collaboration.¨
Many of these large campuses are being built in Tier-II
and Tier-III cities, a growing trend. The key catalyst is that IT or ITES companies are looking at consolidation and portfolio optimisation, pure expansion towards growing captive end-use requirements, DRS requirements, business growth in emerging markets globally, and catering for domestic growth in sectors like telecom and healthcare.
Both Indian and foreign multinationals in IT are adding space. ¨Campuses are largely seen with Indian IT companies who would typically go to government, buy land at a subsidised rate and build their own campuses,¨ says Ashutosh Limaye, National Director-Research, JLL India. He points out to companies such as Tata Consultancy Services (TCS), Wipro and Accenture that have gone the campus route and with some of them also having taken space on a built-to-suit basis from the developers. So, expansion plans are well-known and infrastructure can be established. Most companies - interestingly, this also includes the mid-sized ones - look at the long-term requirement and invest in land.
¨IT companies also have their own norms, and may want to set up infrastructure as per their needs,¨ says NDVS Chowdary, Deputy General Manager-Facilities & Services, working for renowned IT company. ¨There has been good support from state governments in giving single-window clearances to IT companies to set up their campuses.¨
At present, TCS is looking at developing around 3-3.5 million sq ft of consolidation and has asked Hiranandani Constructions to construct the same in Thane, informs sources. Also, Google is known to be building a new campus in Hyderabad with plans to ramp up its engineering investments at its Bengaluru and Hyderabad facilities. And Microsoft, too, has plans for a massive new campus in Bengaluru, according to reports. The company has offices in 10 cities in India, and employs 7,000 people here.
Also, early this year, Oracle announced plans to expand campuses outside the US, and open one in Bengaluru as part of the ´Make in India´ campaign. When the company´s CEO Safra Catz visited India, she reportedly stated that India represents the company´s second largest employee base outside the US, with nearly 40,000 employees and an additional 2,000 job openings.
It is known that the Bengaluru campus will include nine incubation centres and will train half-a-million students each year during this expansion. Sharing more details, Sharma says, ¨The Bengaluru campus is expected to be developed in three phases and be ready in about five years. Phase-I is expected to be developed in the next three years. The campus, spread across 14 acre, will be able to accommodate 14,000 employees.¨
Wipro has plans to construct around 1.5 to 2 million sq ft across various cities. A senior official from Wipro Technologies shares, ¨We already have three to four campuses in Bengaluru and, in the coming years, have plans to introduce more. All projects go through the standard process of tendering and purchase.¨
For its part, TechTuners Software Services is planning a campus that will bring all its employees together, offering them recreational areas, sports centres, etc. Syed Iftekharuddin Ahmed, Director-Infra & Operations, TechTuners Software Services, confirms, ¨We are, at present, in a lease building and, by mid-2017, will shift into our own buildings in Hyderabad and Mumbai. While in Mumbai, we are looking at an office from the sales perspective, in Hyderabad we are eyeing a complete development centre built as per our infrastructure needs and development capabilities.¨
Everyone is moving towards integrated development. There is a cult sustained and this goes beyond just residential accommodation to include a retail space embedded within, a hospital, sports area and more. If the requirement is large, one can go in for a campus that offers a conducive environment because the number of people there is high and almost all amenities need to come in. There is a separate block for amenities, says Sharma, which includes gym areas and recreational facilities like yoga rooms. He adds, ¨In our campus, we are coming up with a swimming pool too. It´s a sports block where there is a complete range of recreational activities.¨ And, Chowdary shares his list: ¨Facilities also consist of development centres and cafeterias; some companies even opt for dormitories, gym area and accommodation for families and associates.¨
Today, designs and development regulations are moving towards an eco-friendly environment. And most IT companies are developing green - right from balancing energy to ensuring conservative use of water and limiting soil contamination. The direction is clear. As Limaye points out, ¨Whatever new the IT companies build, they are conscious of the carbon footprint, focus on energy-efficiency, and want the campus to be LEED-certified.¨ He gives the example of Infosys stating that the company´s buildings built in the late 1990s may not be green compliant, but over a period of time, these may have been converted into green. Also, all new construction today is completely focused on green. Sharma emphasises, ¨As global and Indian environmental standards are getting more stringent on building smart campuses, the emphasis on meeting and obtaining such standards has become a norm.¨ He shares that the company´s upcoming campus is being designed sustainably, saying, ¨We are looking at insulation of solar energy and use of LED lights; we have a specialised STP and full-fledged water treatment plant coming up.¨
¨Large integrated campuses do have avenues to develop as self-sustainable developments,¨ says Natarajan. And, a highly refined and focused green and sustainability concept will eventually converge at smartness. Chowdary adds that most IT companies are looking only at sustainable development - with 75 per cent of the land comprising greenery along with the many green initiatives that support the project.
¨The LEED rating has been a big encouragement,¨ remarks Cyrus Pithawalla, Director-Engineering, Hiranandani Constructions. ¨Focusing on LEED standards automatically brings in the important aspects of saving energy and using recyclable materials.¨ He elaborates with an example: ¨In the case of double-glazing windows, power consumption comes down; double glaze also comes with a soundproof feature and is acoustic. So, using the correct type of glass can definitely save energy.¨
IT is the future
While the growth of IT campuses is on an upsurge, it is dovetailed with the growth of the economy. With huge opportunities in new states such as Telangana and the IT policy changing in Maharashtra, there will certainly be myriad opportunities in the development of IT campuses for another five years.
Indeed, IT has been playing a prominent role in India´s real-estate sector in the past two to three years. That said, Ahmed points out, ¨Many reconsider involving an architect in the development as it will cost more. But it is the architect who will offer appropriate solutions on how to build the campus areas - how the structure is and how much pillar length is required.¨
All considered, the current momentum is high. The IT industry has already brought in immense changes in infrastructure and real-estate has grown in terms of cutting-edge technology - in innovation, construction and sustainability. Evidently, this is the time for IT´s innovation in real estate!
Realty head steps in
A real estate or facilities management professional deals with the architects, several builders and project management companies involved in a project.
NDVS Chowdary, Deputy General Manager-Facilities & Services, working for a renowned IT company, shares, ¨Some companies appoint real-estate heads and project managers who collaborate with the purchase team to identify the architect and civil professionals separately, float the quotes and then have negotiations.¨ This may differ as some companies outsource the job through external integrated solution project management vendors. Nagendra Sharma, Senior Manager-Real Estate & Facilities, Oracle India, adds, ¨Basically, we are at the front end of the real-estate and facilities organisation. We work with the business units and take their requirement and roadmap for the next three to four years, on the basis of which we brainstorm and come up with suggestions regarding the construction of a new campus or facilities.¨
Ashutosh Limaye, National Director-Research, JLL India, observes, ¨Some companies have a function: Corporate Real Estate (CRE) and Asset Management. This department is mandated to build or extend campus areas and they will typically employ project management consultants like JLL. We are responsible for handing over finished products as per the company´s requirement and we tender on their behalf to contractors, architects, and others. At times, the company also floats a competition among design and architectural firms. The winning design becomes a project brief for the project management consulting firm to execute.¨
IT companies look at a tight schedule to finish work at a faster pace. Cyrus Pithawalla, Director-Engineering, Hiranandani Constructions, says, ¨For TCS, we are developing 1.2 million sq ft and some more will follow, say almost 2 million sq ft.¨ The development is being done in two phases: In Phase-I, about 1.2 million sq ft is expected to be completed by August 2017, and the second phase by December 2017 or January 2018. Pithawalla adds, ¨Each floor plate of the slab is 80,000 sq ft and we are trying to finish it in about 12 days, whereas our original plan was 21 days.¨ Success, according to him, depends on coordination and revving up the pressure. It´s also important to have a good connect with the client and do what best you can to ensure that the company can be converted into a repeat client. For instance, Hiranandani is expecting a repeat project from Net Magic.
Architects plan the design and engineers do the work. As far as technology is concerned, Pithawalla confirms, ¨The best technology is available in the market and that is what we use.¨ In terms of procurement, he says, ¨Sourcing of materials depends on the RFP. If the IT company prepares the RFP and gives it to us, and our sales department agrees, the materials are procured.¨ The IT company is also involved in procurement. Pithawalla reveals, ¨In the TCS campus development, the focus is on the internal finishes, and we are doing the shell construction. Our scope of work in the upcoming Net Magic campus is similar.¨
The shell includes all the outside block machinery, windows, and inside internal plaster, etc. ¨We basically do the structure, which includes, waterproofing, external plaster, external facade and other external services including basements,¨ says Pithawalla. ¨We also apply the unique flat slab technique in all our projects.¨ The flat slab has no beams in between. So, internal beams are completely removed; instead, there are drops and columns. Suppose a slab is 300 mm, the drop will be about 225 mm. This brings in economy in design, improving quality and speed of construction as well.
- Shriyal Sethumadhavan