‘IT MNCs keen on exploring Ahmedabad’

Gujarat may get a second chance to catch the IT bus it missed in 2000. The multinational information technology companies are exploring possibilities of foraying into Ahmedabad market.

The environment is conducive for IT companies in terms of talent pool, lower pay packages along with lower attrition rate in the industry. However, split commercial space is one of the major hurdles in the city.

The Indian IT companies have make their presence felt in the city and now its turn of the multinational companies. "Our clients are willing to foray in Ahmedabad market and we have received a good number of inquiries for space on lease," said Anuj Puri, chairman and country head of Jones Lang LaSalle (India).

The IT companies will come in small size in the initial period. The inquiries are for around 25,000 square feet to 40,000 square feet and likely to employ around 250-400 employees. The companies want to test the market before they come in big way.

According to Puri, enough number of talent and lower attrition rate, initially zero, are among the main attractions for the IT MNCs for coming to Ahmedabad. "The attrition rate is more than 50% in Bengaluru," he said.

However, non-availability of bigger commercial space on lease will be one of the key issues for the large IT companies. "The Ahmedabad commercial market is yet to mature as offices are split in narrow space making the building more troublesome for maintenance," added Puri.

Moreover, prohibition is another issue faced by MNCs that are run by expatriates for coming to Gujarat. "If prohibition is lifted in SEZs, more IT MNCs could come to Gujarat," claimed Puri.

Talking about residential segment, he said that real estate developers in Mumbai and Delhi are under more pressure compared to other parts of the country. "I saw stress upon faces of developers in Mumbai and Delhi, which was not case in Ahmedabad," Puri said. Unlike their counter parts in developed markets like Delhi and Mumbai, the realtors in Ahmedabad do not over-leverage, they do not have to pay much to the banks, they do not use private equities route to raise fund and have back up of investors and end users, he said.

He said that the property prices in Delhi and Mumbai are heading towards correction along with Bengaluru and 15-20% correction is likely in the near future.