With companies across the globe asking employees to work from home, IT parks and commercial buildings are facing a major decline in revenues as some organisations are looking at vacating office buildings with some being unable to pay rents due to the slowdown.
However, the IT parks in Kerala seem to have bucked the trend, with the Infopark in Kochi, Technopark in Thiruvananthapuram and Cyberpark in Kozhikode continuing to grow. Compared to the past 2-3 years, the number of companies and techies working out of these IT parks has been increasing steadily.
In a conversation with TNM, Sasi Pilacheri Meethal, the chief executive officer (CEO) of these IT parks, says that despite companies allowing working from home and some facing financial difficulties, only a few very small companies have vacated office spaces, and that more companies continue to request for space at these parks.
How has the COVID-19 pandemic impacted the business and growth of the IT parks?
There has been no impact. Even though people are working from home, that has not resulted in reduction of space here in any of the parks.
There are some small companies, maybe 3-4 very small ones with 10-15 employees, who have vacated. But otherwise we donâ€™t have any indication either of companies reducing occupancy or vacating from the park.
What about rental yields? Have companies been requesting waivers or invoking force majeure?
No, not so far. We had proactively given a three-month rent waiver to all companies for the months of April, May and June. Itâ€™s a complete waiver where they didnâ€™t need to pay rent for the three months. Starting from July, rent collection has restarted. Apart from that, there have been some requests, but we have not been able to consider those.
And because of the rent waiver, weâ€™ll have a slight reduction in revenue growth this time. I wonâ€™t be able to quantify the decrease, but there will be some reduction. But otherwise weâ€™re on a steady growth path.
What other special measures have you taken in light of the pandemic?
Weâ€™ve taken many measures. Weâ€™re not increasing the rent for the financial year 2020-21. Normally there is an increase of 5%, but this year weâ€™re not imposing that. Weâ€™re also discussing ways to reduce the fixed expenses such as electricity charges for companies. And this year, if any new company wants to rent space and start activities in any of the IT parks, weâ€™re giving them a three-month waiver whenever they decide to join.
What about safety measures?
All safety measures prescribed by the government of India and the government of Kerala have been put in place and weâ€™re adhering to it one hundred percent.
But have new companies been approaching you to rent space, especially in the last few months?
There are a lot of requests. In Technopark (Thiruvananthapuram), we donâ€™t have space anymore. So, we are unable to take in any new companies. In fact, we have a waiting list of about 150 companies. In Infopark (Kochi) as well we have a waiting list in both the SEZ (Special Economic Zone) space and the non-SEZ space. Demand has been more for the non-SEZ space, but weâ€™re unable to meet it as of now and have put those companies on the waiting list. In the case of SEZ, there were some requests and we have already given the space.
Given that there is demand, are you looking at acquiring more space?
Not immediately. In fact, in Technopark, we had considered taking some rented space outside and requesting companies to move in there, but now weâ€™ve put that plan on hold to see how the whole thing (pandemic) pans out.
Do you have any other investment or expansion plans lined up or are you putting those on hold as well?
Weâ€™ve planned something called â€˜Work near homeâ€™, which weâ€™ll start to roll out in all the major cities in Kerala. These will be very small IT parks so that that is easier for employees to be near their home and even work from home. But weâ€™ll start this only once the current crisis settles down a bit, otherwise people may not come to these spaces.
How many companies operate out of these IT parks? What are some of the notable names?
At all the three parks together â€“ Infopark, Technopark and Cyberpark â€“ we have more than 900 companies. Most of them are operating with minimum staff, maybe about 5% of the total staff. Offices have been kept open throughout so that whoever needs to can come and work from here.
The companies include many large MNCs such as Oracle, Ernst & Young, KPMG, TCS, Wipro, Infosys, among others.