16 May 2017

1. German major Thyssenkrupp sets up manufacturing facility near Pune 

German multinational ThyssenKrupp recently opened up a new multi-purpose facility for the elevator industry at Chakan, Pune. It will include manufacturing of elevators, facilities for training and will also act as a distribution centre. This new 20,000 sq m facility at an investment of INR3.60 billion will have the capacity to manufacture 6,000 elevator units with plans to increase to 10,000 units over the next two years.

(Source: The Hindu Business Line, 12 May 2017)

Research View

In line with the ‘Make In India’ initiative by the government a number of manufacturing companies are showing keen interest in India fuelling the demand for industrial properties in cities such as Pune, Hyderabad, Bangalore, NCR and Chennai. The industrial and manufacturing sector in Pune has been growing exponentially with the presence of companies like Tata Motors, Mercedez-Benz, Cooper Standard, TomTom, etc. SAIL and ArcelorMittal are also planning to set up an auto grade steel plant at Chakan. We expect many other industries to set up their base along the outskirts of Pune at locations like Chakan and Ranjangaon. According to newswires, Kia Motors, a subsidiary of Hyundai Motor, has also signed a memorandum of understanding with the Andhra Pradesh government recently to build a manufacturing facility in the state. With an investment plan of more than USD2 billion in the state, the company is likely to generate over 10,000 direct and indirect jobs in India.

2. DLF Cybercity to invest INR 500 Cr for phase III expansion in Chennai   

DLF Cybercity today commenced construction activities for Phase III expansion covering 1.6 million square feet at the IT-SEZ with investments attracting INR5 billion. 

(Source: The Economic Times, 10 May 2017)

Research View

We are observing an increased interest among developers in building Special Economic Zone (SEZ) spaces in Chennai as huge SEZ supply of about 7 million sq ft to be built out in the city by 2020. According to our research survey, approximately 76% of the upcoming new supply in 2017 will be concentrated in the city's SEZs. With Old Mahabalipuram Road (OMR)-Post Toll, Mount Poonamalle High (MPH) Road and Grand Southern Trunk (GST) Road observing increased traction in SEZ supply, few other key schedules for the year include 1.2 million sq ft in Chennai One SEZ–South Block and 0.4 million sq ft in The Gateway SEZ. Also the Embassy group launched its new SEZ project in OMR-Post Toll in Q1 2017 which will further augment the supply by adding up to 2 million sq ft of Grade A space by 2018 and 2.5 million sq ft by 2019 in two phases. 

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