Australian-based gaming content and technology company Aristocrat has leased 128,000 square feet of office space in the Candor TechSpace Special Economic Zone (SEZ) from Brookfield Properties in Noida.
The deal has gone through despite the fact that many other businesses are choosing to put on hold purchasing spaces in SEZs as the Development (Enterprise and Services) Hubs Bill, 2022 is slated to replace the Special Economic Zones Act. Meanwhile, the demand for office space in Noida is continuing to rise.
“Companies are looking for quality space and SEZ is not a deterrent for them. However, the new Act will help the developer in reducing vacancies. Demand for office space is rising in Noida, and the supply pipeline of Grade A buildings is also robust,” said Vibhor Jain, managing director, North India, Cushman & Wakefield, as quoted by The Economic Times.
Speaking on the delay of the bill replacing the SEZ Act, Sriram Khattar, managing director, rental business, DLF, said, “The vacancies are either in the SEZ due to the amendment in the Act, which is taking a little more time than we had anticipated.”
According to Sanjay Dutt, managing director of Tata Realty and Infrastructure Limited, the minister had announced a SEZ Amendment Act last year that would allow domestic businesses to operate in IT SEZs. Although the compliance requirements remain, multinational corporations (MNCs) believe there is no significant financial advantage to operating in SEZs following the sunset clause.
MNCs’ capabilities and service centers, as well as IT services businesses, occupy most of the IT SEZs in India. SEZs produce 2.3 million jobs and more than 30% of India’s exports. According to industry estimates, IT SEZs contribute significantly to SEZ exports and created $66 billion in revenue for IT and related services in 2020–21.
The demand for commercial space in the Delhi-National Capital Region (NCR), which is expected to increase as workers return to their workplaces, is expected to hit 11 million square feet this year, according to Savills India.