How the American suburban boom has influenced Gurgaon

On the NH-8 and barely 500 metres on the Gurgaon side after the toll plaza, an undulating range of chrome-and-glass high-rises greet you on both sides. Moving southwards, you will notice handsome buildings proudly displaying logos of Lanco, Nestle, Daikin and Convergys. Travel a little ahead and you will spot the Deloitte and Airtel offices as well. While you and I may be suitably impressed by the splendid show, these office complexes lining the NH-8 represent only a tiny slice of Gurgaon’s emergence as the most successful suburban business district in India over the last decade.

While it is common knowledge that some of the who’s who of the MNCs - Google, ITC, Pepsico, Coca-Cola, IBM, American Express, Citibank and TCS - have made Gurgaon their home, it is amazing that the same factors, which prompted and promoted ‘Suburban America’ in the 1940s, are at play in Gurgaon. Herein lies the real story of how modern suburban America is influencing Indian lives.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

[caption id=“attachment_360014” align=“alignleft” width=“380” caption=“It is amazing that the same factors, which prompted and promoted ‘Suburban America’ in the 1940s, are at play in Gurgaon. Photo:Trip Advisor”]  [/caption]

For the uninitiated, American suburbanisation - triggered by the end of WW-II, and coupled with lifting of spending curbs in the US and a whole host of financial sops by the US Federal government - saw millions of Americans setting up homes in the suburbs - away from the hustle and bustle of the city centres or from distant rural areas - for want of a better quality of life. American corporate houses literally followed their employees - current and prospective - to the suburbs. What started as a trickle in the 1950s, metamorphosed into a wholesome trend in the later decades.

Prof. Louise A. Mozingo of the University of California, Berkeley, wrote in her book ‘Pastoral Capitalism’ that America’s suburbs, by the end of the 20th century, contained more office space than its central cities. Bell Labs, General Motors, Deere & Company, and Microsoft are among those American blue-chip companies that are headquartered in the suburbs.

Impact Shorts

More Shorts

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

As Trump weaponises tariff, Fed sees a bigger worry: Not jobs, but rising prices in America

In the Indian context, as more and more people set up their homes in the suburbs - and more importantly, away from the claustrophobic city centres - corporates also followed suit. According to real estate consultant Cushman & Wakefield, the strained infrastructure and overcrowding in the central business districts (Nariman Point in Mumbai and Connaught Place in New Delhi, for example) was/is prompting corporates to take flight to city suburbs such as Bandra-Kurla Complex, Navi Mumbai and Gurgaon, which offer quality physical infrastructure, robust telecom connectivity and competitive real estate. The proximity to residential locations in the suburbs has been one big reason fuelling this shift. It is apparent that Indian companies are becoming increasingly amenable to their employees’ desire to cut down on commuting time. Suburbia, therefore, has become a natural fit.

India’s economic boom through the last decade also saw domestic companies attaining critical size. However, the real estate on offer in the CBDs neither had the space configurations required by these corporates, nor the infrastructure to support their operations. Also, availability of large spaces along with requisite parking became a perennial issue at CBD locations. Suburbs, on the contrary, offered development with large and efficient floor plates in a variety of affordable options. There was a financial angle as well; according to Tata Housing’s own estimates, relocating to the suburbs from a CBD has provided savings in excess of 40 percent in some cases.

Some cities such as New Delhi witnessed an exodus to the suburbs ahead of the others. The Capital saw a flight of large space occupiers to the suburbs in the National Capital Region (NCR) through the mid-90s and 2000s. The traditional commercial districts of Connaught Place, Nehru Place and Bhikaji Cama Place have since declined in value and attractiveness, and have seen only very specific end-use demand of late.

Another factor which drove demand predominantly to Gurgaon and later to Noida had been the change in the profile of demand drivers in the industry. Typically, it was the software/ITES/BPO companies which accounted for the major uptake in NCR (as high as between 65-85 percent annually). Awareness about modern office space and unwillingness to compromise any further in terms of maintenance and critical services such as air-conditioning, power backup, etc., also resulted in more and more corporates rooting for the suburbs.

Nariman Point in Mumbai is another CBD that was/is experiencing this problem. While some corporates are relocating/consolidating to other micro-markets such as Lower Parel, Andheri (East) and even Bandra-Kurla Complex, new corporate entrants, especially in the ITES sector are exploring the suburbs of Malad, Powai and Thane. It is crystal clear that with business dynamics having undergone a drastic change over the last decade, corporates no longer feel the necessity of being located in the traditional CBD locations. Concurrently, with the growth of suburban cities, newer commercial micro-markets are emerging, providing fresh stock with better specifications and building services, and at lower costs.

Evidently, the phenomenon of corporates making a beeline for suburban India is not limited to the big metros of Mumbai and New Delhi. In Bengaluru, the technology-led revolution has pushed the growth towards the south-east quadrant of the city to areas such as CV Raman Nagar, Indiranagar, Airport Road, Inner Ring Road, Koramangala, Hosur Road and Bannerghatta Road. Over the last decade, several multinationals such as IBM, Motorola, I-Flex, and Hughes Software have relocated to Bengaluru’s suburbs from their erstwhile CBD locations.

Hyderabad too has witnessed a similar shift towards the suburbs. In the last few years, the focus of corporates has shifted from Begumpet to the suburban locations of Banjara Hills and Jubilee Hills. Besides this, the proximity to the IT and ITES work locations (Madhapur, Kondapur, Uppal) has further led to the development of these areas in the last ten years.

To reiterate, the reasons for shift to the suburban and peripheral locations can be summed up as: Non-availability of quality space in the city centres and availability of large areas in suburbs, accessibility and improved infrastructure in the suburbs and integrated nature (co-existence of residential and commercial areas) of the suburbs. And, if American suburban corporate workplaces are surrounded, somewhat incongruously, by verdant vistas of broad lawns and leafy trees, the office complexes at Mumbai’s Malad and Goregaon overlook the lush green Sahyadris. Welcome to modern Indian suburbia, American-style.