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February 25, 1998


Soft Soil

In the time of recession, real estate developers are looking
at the immune software industry to bail them out.

Email this story to a friend. Real estate dealers and land developers, who for some time now have been facing bad business, are turning to the computer software industry for the better deals it can offer.

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These enterprises, according to industry sources, have become key private providers of infrastructure and even promoters of at least nine computer 'software technology parks' that are due to come up in Bangalore.

A rapidly growing information technology industry in the country is consuming office space voraciously. And accelerating matters are some state governments, which have been offering sops to software entrepreneurs in the hope that they build base on their soil, bringing along juicy jobs and revenue.

The attraction is natural, concedes M R Jaishankar, managing director of the Brigade Group, a 10-year-old construction major.

The Group is investing Rs 1-1.5 billion in an array of infrastructure projects targeted at seven software technology parks. Six of these will be set up within the interior city and one at Whitefield in the next 6 to 18 months.

It is purely a market driven trend, says Jaishankar. For the past two years, all major sectors of industry have gone into severe recession.

The real estate segment has slumped by 30-50 per cent for commercial and agricultural land. But computer software is the only sector that is still talking of 100 per cent growth. Its average growth rate is 1997-98 is projected to be well over 100 per cent.

Besides, an infrastructure policy that is in the offing also promises several concessions and tax incentives to projects related to the software business.

And so, these providers are constructing modern office spaces, high-speed communications lines and continuous power supply, all targeted at big and small IT companies.

"This is the growth industry," agrees M R Jairam, chairperson of the Rs 6 billion M S Ramaiah Group. The Group made its mark with real estate and has started diversifying into hi-tech industrial activities.

It is now converting about 160 acres of prime land it holds at the proposed international airport at Devanahalli near Bangalore into a Rs 950 million technology park.

Perhaps the tallest order in this category would be Space City, the Rs 4.78 billion venture proposed in the vicinity of the International Tech Park Limited, a prestigious STP in which the Karnataka government has a stake.

The 360 metre, 104-storey Space City will be India's tallest structure when completed, says Inder R Jaggi, its Bombay based chief promoter and managing director of DNDC Infrastructures Limited.

Not only is DNDC tapping a large component of resources for Space City from a major international funding agency, it also plans to invest in a similar venture in Pune called Cyber City.

The Bangalore project is to have residential training centre to provide that much needed expert labour, besides a star hotel and convention centre.

Some 60 acres of land is being acquired for the project and its location is being finalised around Attibele or Bommasandra, well out of the line of private experimental aircraft flights.

Space City, says Jaggi, is targeted at Silicon Valley blue chips, programming and networking businesses, robotics and hardware.

The Brigade Group projects will house small and big domestic and international companies. The Technopolis, according to Jairam, will mainly be for 60-70 non-polluting units - in informatics, avionics and electronics. It may also end up as a second PDC base for companies that are planning to move out of Penang for want of skilled labour.


- Compiled from the Indian media

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