New Delhi: After the information technology industry spurred the growth of real estate in India, the fast-growing biotechnology sector is creating demand for real estate space across the country, according to a report by realty consultant, Jones Lang LaSalle Meghraj.
Considering its rapid growth, the biotechnology industry will require around 100 million sq. ft of space, the report predicts. The development of biotech parks and manufacturing units to support this growing industry is expected to have a significant impact on the real estate sector, the report said.
Currently, six biotech parks are operational in India and an additional 19 are being developed.
The country’s real estate industry has been expanding at a very fast pace, mostly because of a booming economy and a healthy growth in India’s gross domestic product.
According to industry estimates, the country’s real estate industry has been growing at 33% compound annual growth rate and is currently a $12 billion (Rs47,880 crore) industry.
Prime estate: The Biocon Ltd headquarters in Bangalore. The firm is one of the major players in the booming biotechnology sector in India.
The information technology industry has largely contributed to the demand for quality office space. The estimated demand from the information technology sector alone is expected to be 150 million sq. ft of space by 2010.
But now, the biotechnology sector is also attracting huge investments. Over the last four years, the total investment in the biotechnology sector has grown significantly to $366 million in 2006 from $137.2 million in 2003.
A large part of the investment in the biotechnology sector goes towards setting up infrastructure and research and development centres. This is fuelling demand for real estate in the major biotech hubs of Hyderabad, Bangalore, Chennai, Mumbai, Pune and the National Capital Region, the report said.
According to the report, India is fast emerging as a key destination in the biotechnology sector. It is among the Top 6 emerging biotech leaders in Asia-Pacific alongside China, Singapore, Taiwan, Japan and Korea.
The major players in the domestic biotechnology sector are companies such as Biocon Ltd, Panacea Biotec Ltd, Wipro Health Sciences unit of Wipro Ltd, and Wockhardt Ltd. Also, many international biotech companies are shifting their base to India to utilize the country’s technically educated human resource pool.
Real estate players say they are already gearing up for the hike in demand.
“Biotech is an upcoming industry. We feel it will play a similar role as the IT industry did,” a company spokesperson of Omaxe Ltd said.
“When you start employing people in a particular sector, the disposable income goes up, which leads to an increase in demand for residential property as well.” Omaxe is developing space within a proposed 326 acre biotech park at Patialia in Punjab.
In 2006-07, the revenue of the Indian biotechnology industry crossed $2 billion, registering a 33% growth compared to last year. The industry is expected to reach $5 billion in revenues by 2010 and create one million jobs.