Sick units will now house IT sector

R Jayaprakash / TNN / Jun 18, 2007, 01:37 IST

Text Size

Small
Medium
Large

Bangalore's old industrial belts are paving way for office spaces.

BANGALORE: Rajajinagar Industrial Area is a major landmark on West of Chord Road. Now, only the name remains. One of the oldest industrial belts is giving way for a IT-BT park now. Similarly, owners of sick industries in Hoodi Industrial Area are earning cashing in by renting out their premises as office space.
Close on the heels of some of Mumbai's industrial areas making way to residential projects, Bangalore's old industrial belts are paving way for office spaces.
The death of sick industries is also coinciding with the dearth of office spaces for IT, ITeS, and BPOs. As per estimates, Bangalore has to create another eight million sqft of office space to meet the current demand with over seven million sqft already absorbed in first six months of 2007. The eroding space for IT establishments has prompted industrial landholders to explore options for optimal utilisation of their properties.
The fall out: traditional industries, both large-scale as well as small-scale, are being converted to tech parks and integrated projects.

A clear testimony is Rajajinagar Industrial Area, which was set up in the 1970s and had 60 profit-making industries at one point. Now, about 35 units that produced machine tools and dyes are sick and facing lockouts.
But the space is being put to use by the government as it is in a strategic location. A new IT-BT park will be set up by the Karnataka State Industrial Investment and Development Corporation (KSIIDC), informed sources in the industries department.

Conceived as per international standards, this park will have modern amenities best suited for companies that operate on multi-point systems.
The park will have a total built up area of 2.4 lakh sqft, with around one lakh sqft dedicated to utility services and the rest for office space. The project is estimated to cost Rs 40 crore.
Since the industrial areas situated on the city's periphery, they are sough after properties now due to their prime location. Some old industrial areas, including Hoodi Industrial Area, Peenya Industrial Area and Old Madras Road, are new IT hot spots in the making.
The Hoodi Industrial Area had 200 units, of which only 50 have survived. Most of these units manufactured steel, glass, etc. They closed down because of labour, power problems and huge losses, explained sources in the realty sector.
The Yeshwanthpur Industrial Area, which hosted 70 industries dealing with mainly plywoods, is also on the verge of closure. Since this area is a mixed zone as per zoning regulations, office spaces, malls and integrated townships are mushrooming here.
The trend has snowballed with many industries taking their cue and entering this market as they've found it difficult to revive their industries due to various reasons. Industrial lands with an area of around 40 acres are up for grabs per sqft basis - nothing is less than Rs 1,600/sqft which is also selling for Rs 2,600/sqft.
These 'sick' industries, which are now flourishing office spaces, are yielding 200 per cent profits in terms of rent.

End of Article