“Significant Real Estate Reform: IT SEZs Granted Space Leasing Authorization”
The Indian government’s recent decision to authorize Special Economic Zones (SEZs) to lease space partially or in floor units marks a significant milestone in the real estate landscape, triggering positive responses from industry experts and stakeholders.
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The Indian government’s recent decision to authorize Special Economic Zones (SEZs) to lease space partially or in floor units marks a significant milestone in the real estate landscape, triggering positive responses from industry experts and stakeholders.
This reform, a crucial step towards boosting occupancy within IT SEZ Parks, has been lauded by real estate experts for its potential to stimulate economic activity and bolster job creation across the country. Anshul Jain, Managing Director of India & Southeast Asia and Head of APAC Tenant Representation at Cushman & Wakefield, commended the move, emphasizing its positive implications for India’s commercial real estate sector.
“This is a long-awaited and positive move for India’s commercial real estate sector,” stated Jain. He highlighted the benefits such as increased flexibility in SEZ business operations, streamlined approval processes for de-notification, and ease of transactions between SEZs and the Domestic Tariff Area (DTA), predicting a mutual benefit for both developers and occupiers.
The reform, enacted through an amendment to the SEZ Rules of 2006, enables SEZ operators to partially de-notify areas within these office parks on a floor-by-floor basis, effectively freeing up space for diverse occupiers. This new regulation simplifies the interaction between SEZs and the DTA, making transactions smoother and less burdensome, a relief from the earlier complicated process.
Anshul Jain highlighted the consequential impact of this amendment, stating that occupiers catering to both export and domestic markets would no longer need separate office spaces, streamlining their operations within a single location.
Industry leaders such as Ramesh Nair, CEO of Mindspace Business Parks REIT, and Aravind Maiya, CEO of Embassy Office Parks REIT, have expressed their appreciation for the government’s proactive approach in adapting to market dynamics. Nair emphasized the move as aligning commercial real estate offerings with business requirements, while Maiya highlighted its positive trajectory towards achieving pre-COVID occupancy levels in premium-grade SEZ office spaces.
The amendment’s potential to enhance the attractiveness of SEZs and foster operational consolidation signifies a monumental shift in the Indian real estate sector, fostering optimism among industry players and stakeholders alike.
Sources By Agencies
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