KOCHI: After lying low for a while, SmartCity-Kochi (SCK), the 246-acre IT park in Kakkanad, has suddenly sprung into action with Prestige Group receiving the central government’s non-processing zone clearance for its Cyber Green I project, which is expected to attract keen interest from several large MNCs.
Moreover, Lulu IT Infrabuild’s twin IT tower, coming up on 12.74 acres at SCK, will be ready to be leased out in the third quarter of this calendar year. Bengaluru-based Maratt Group’s ‘Knowledge@Maratt’, a 5 lakh sqft LEED-certified grade ‘A’ office space, is also fast progressing with 70% of work completed. A Canadian company with operations in over 50 countries has also taken four acres of space at SCK. SCK is a joint venture between SmartCity (India), an affiliate of Dubai Holding (84%), and the Kerala government (16%).
The big boost, however, was Prestige Group receiving the commerce ministry’s board of approval (BoA) on February 6 for its Cyber Green I project under the non-SEZ category via the recently inserted 11B clause of SEZ (special economic zone) rules. Under this clause, there can be non-processing areas for IT/ITeS SEZ. It permits co-existence of SEZ units and non-SEZ IT/ITeS businesses on the same SEZ premises. This is to enable SEZ developers to optimally utilise vacant spaces in existing SEZs.
The Bengaluru-based real estate developer wanted its facility to be treated as a non-processing area, saying the 15-year financial incentives that developers and IT companies enjoyed at SEZs under the ‘sunset clause’ have ended, making it unattractive for firms to establish units in these zones.
According to sources, a global consultancy firm is likely to occupy an entire tower of the Prestige property, while many MNCs have expressed keen interest to take up space in the second tower. Cyber Green I, which occupies 4.61 acres at SCK, has a total built-up area of 8.78 lakh sqft and a leasable area of 5.4 lakh sqft – across two towers.
Lulu Group sources said the company is keeping its options open on zone classification within SCK. “We will test the market because ours will now be the only property with SEZ benefits. So, we are not taking any decision in a hurry,” said an official.
Companies with SEZ clearance can cater only to the export market while non-SEZ firms can serve the domestic market as well. An official with Lulu IT admitted the end of fiscal exemptions for IT companies in SEZs has made it difficult for developers to attract companies.
The 29-storey Lulu twin tower, which will be the highest such tower in Kerala, will have a total built-up area of 36 lakh sqft. Lulu’s IT project is estimated to cost over Rs 1,200 crore.
According to Lulu officials, a company established a month prior to April 2020 can enjoy financial incentives for 15 years. This means, the new rule will impact companies that have been in existence for the past 15 years or more, while a company established in a SEZ prior to April 2020 can enjoy benefits until 2035.
Earlier, companies like Prestige were banking on the Development of Enterprise and Service Hubs (DESH) Act, which will replace the Special Economic Zones (SEZ) Act, 2005, for a solution. The DESH Act was expected to provide some concessions, including extension of financial sops for IT companies, flexibility for developers to convert SEZ areas into non-SEZ (an entire complex or even specific floors in a building), etc. However, the Union government inserted the 11-B clause to the existing SEZ rules following the delay in the DESH Bill.
Major projects @ SCK
Prestige Group’s Cyber Green I (4.61 acres) - two towers ready for occupation
Lulu IT Infrabuild’s twin IT tower (12.74 acres) - to be ready in 6 months
Maratt Group’s ‘Knowledge@Maratt’, 5 lakh sqft - 70% complete
Canadian MNC - takes 4 acres