India Inc is on a land-buying spree with real estate rates hitting rock bottom.

'Land banks', a new term coined for this phenomenon, of over 1,350 acres with an estimated value of around Rs 1,600 crore (Rs 16 billion) have been added to Corporate India's investment portfolio over the last two years.

Real estates consultants say corporates are increasingly using land as a vehicle to park their surplus fund. In effect, land banking is emerging as a tool for corporate treasury management.

While land banking has been prevalent among infotech majors such as Infosys, Wipro, TCS and Satyam, some pharmaceutical companies such as Dr Reddy's and Ranbaxy as well as telecommunication giants Reliance Infocomm and Bharti have also been buying land in all the metros and A class towns in the country.

Even multinationals such as General Electric, Microsoft and Oracle have also recognised real estate as an important component of investment.

In the western region, over 540 acres of land has been acquired by various corporates in Pune and Mumbai in the last two years.

These include both domestic and multinational companies like Reliance Infocomm, Infosys, Wipro, Cognizant, Syntel and Veritas. The estimated capital value of the land investments is in the range of Rs 745-750 crore (Rs 7.5-7.50 billion).

In Bangalore, which witnessed the highest land absorption in 2003 at 4.6 million square feet, over 245 acres of land has been acquired by corporates.

Companies such as GE, Infosys, Satyam, Intel and Timken have bought land worth Rs 325-330 crore (Rs 3.25-3.30 billion).

Similarly, in Chennai, close to 300 acres of land has been bought over by corporates such as Xansa, Infosys, Polaris, TCS and Wipro.

In Hyderabad around 135 acres of land, worth Rs 75-Rs 80 crore (Rs 750-800 million) has been acquired by Microsoft, Oracle, Kanbay, Infosys and GE.

In the northern region land absorption by large corporates has been around 140 acres. Hughes Software, Infosys, Perot Systems, ACC, Bharti, Videocon and Ranbaxy have acquired land in the National Capital Region, as well as in Chandigarh for an estimated capital value in the range of Rs 325-350 crore (Rs 3.25-3.50 billion).

Chanakya Chakravarti, executive director, Cushman & Wakefield India, said: "Most companies bought land when the real estate rates were on the lower levels. Even now they have been continuously looking for land banks. It has been an actively utilised source to deploy surplus funds."

Companies buy land and build the shell of the structure which can be utilised when they want to implement their expansion plans.