CHENNAI: Chennai has a 16 per cent share in the Special Economic Zone (SEZ) office space spread across seven leading cities, according to a report by property consultant CBRE.
The report ‘SEZs in the Sunset Era: To Go or Not to Go?’ says that SEZ space accounts for 22 per cent of office stock in India and cities like Chennai, Bengaluru, Kolkata, Hyderabad, Pune, Mumbai and Delhi-NCR account for 80 per cent of the stock. The report states that almost 30 per cent of overall SEZ stock was added in 2015 to first Half of 2018.
“More than 20 pc of the upcoming office supply lined up for completion over the next two years in India is expected to consist of SEZ developments and 80 per cent of this supply pipeline is expected to come up in Chennai, Hyderabad, Bengaluru and Delhi-NCR,” the report stated.
Interestingly, of the upcoming office supply, Chennai accounts for 14 per cent of the SEZ supply in 2018-19. It is learnt that 34 million square feet of SEZ space was absorbed across the seven cities from 2015 to the first half of 2018, led by Bengaluru, Hyderabad, Delhi-NCR and Chennai. This amounts to 23 per cent of the overall office absorption in the country during the period.
According to the sector-wise segmentation of SEZ space take up in India between 2015 and 2018, tech industry led consumption, followed by banking, e-commerce, pharmaceutical, engineering and manufacturing and research, consulting and analysis. The government in 2015 laid a roadmap to successfully reduce corporate tax from 30 pc to 25 pc by 2019. In this light, it was announced to simplify the tax structure, profit or investment – linked incentives and area-based deductions would be phased out.
This also included announcing a sunset date on tax exemptions granted to SEZ developers and unit holders. The report states corporates have continued to view SEZs favourably, not only due to their direct and possibly indirect tax benefits, but also due to availability of high-quality, large-sized floor plates that are ideal for their consolidation.
80 pc of stock
SEZ space accounts for 22 per cent of office stock in India and cities like Chennai, Bengaluru, Kolkata account for 80 per cent of the stock
14 pc
Chennai accounts for 14 per cent of the SEZ supply in 2018-19 of the upcoming office supply
3.4 cr
square feet of SEZ space was absorbed across the seven cities from 2015 to the first half of 2018