Special Economic Zone (SEZ) space accounts for 22 percent of office stock in India. As per a recent report, cities like Chennai, Bengaluru, Kolkata, Hyderabad, Pune, Mumbai and Delhi-NCR account for 80 percent of this SEZ stock.
The finding comes across in a recent report by CBRE named ‘SEZs in the Sunset Era: To Go or Not to Go?’ It also states that almost 30 percent of the overall SEZ stock was added in 2015 to the first half of 2018.
In fact, more than 20 percent of the total upcoming office supply lined up for completion over the next two years in India is expected to consist of SEZ developments. Also, the report states that 23 percent of the overall office absorption in the country during the period from 2015 to the first half of 2018 happened in SEZ.
“We feel that the space take-up in SEZs should remain strong till the end of 2019,” Business Standard quoted Anshuman Magazine, Chairman, as saying. “We also expect that at least till the end of 2019, there will be a continuity in several trends in the SEZ segment of the commercial real estate market with a growing preference for SEZ spaces by corporate….”
Talking about sector-wise segmentation, it is the tech industry that dominated SEZ space take-up with over 60 percent space absorption in the past three years. The other leading industries in this league are banking, e-commerce, pharmaceutical, engineering and manufacturing and research, consulting and analysis.
The report’s finding seems to be the result of the government’s roadmap that it laid in 2015 to successfully reduce corporate tax from 30% to 25% till 2019. A sunset date was announced for the tax exemptions granted to developers and occupiers of SEZs.
The government of India had introduced the SEZ policy in the year 2000 with the purpose of accentuating foreign investment and propelling exports.