Biotech could be next big driver of realty prices

Biotechnology could be the next big driver of commercial real estate prices. It's expected to need 80 to 100 million square feet by 2010. Investment in such factories has been growing fast. In 2003, Rs 14 crore were invested and in 2006, the figure more than doubled to Rs 36 crore. The biotech sector has grown 33% since last year.

Its revenues total USD 2 billion, but by 2010, revenues will reach USD 5 billion. That's what a report from property consultant, Jones Lang Lasalle Meghraj says.

It says international firms like Glaxo Smithkline and Pfizer, are investing in the industry, which will boost real-estate demand.

Vincent Lottefier, CEO, JLLM said, “India is no longer relying purely on the IT sector to grow the real estate industry. The access to the talent pool, the infrastructure and the costs of labour and equally the costs of components, it has a big impact on their decision to come into India".

Although Mumbai has traditionally been the preferred choice of location, companies are focusing on cities where land prices are more reasonable. In Hyderabad, for instance, land values in some areas jumped 30-40% after ICICI Knowledge Park and Shapoorji Pallonji Biotech Park came up there. Other popular destinations include Bangalore, Pune and the National Capital Region.

The report says various incentives such as 100% foreign equity investment, customs duty exemption, and 100% tax rebate on R&D expenditure, offered by the government, have made this sector attractive. So, investors are flocking to the sector. There are six biotech parks in India and 19 more are in the pipeline.