Commercial real estate demand across the country is expected to be more than nine million square feet in 2004, with multinational banks and financial services giants such as Royal Bank of Scotland, Barclays, Abbey National, Aviva (Norwich Union) and Lloyds TSB Bank looking at establishing back offices across the country.

According to a study by Cushman & Wakefield, about 11 million square feet of land will be available in 2004 for commercial purposes.

Michael Creamer, executive managing director, global corporate services, Asia Pacific, Cushman & Wakefield, said, "Outsourcing activities are moving up the value chain, from no-brainers like call centres to information technology related services to accounting, research and analysis-based services. A lot of global financial institutions, banks, and investment houses are looking towards India as development of real estate comes much cheaper compared with other countries."

"Developing real estate rates in A class towns in India for commercial ventures are still around 50 per cent cheaper than that in the European countries. This coupled with cheap labour is a very viable option for outsourcing by foreign multinationals," Creamer said.

A class towns such as Mumbai, Bangalore, Pune, Chennai the National Capital Region and Hyderabad are the centres where real estate development will be fuelled by commercial activities.

Apart from financial sectors, the pharmaceutical industry is also looking at India for offshoring services, though China is still the preferred destination for outsourcing in the manufacturing sector.

More than eight million square feet of land across six cities Mumbai, Bangalore, Pune. Chennai, NCR and Hyderabad was developed for commercial purposes in 2003, of which around 40 per cent was directly leased by global companies.