OFFICE MARKET VIEW BUSINESS, SPACE & TECH ACCELERATION
Amit Oberoi- Head of Occupier Strategy, Asia, Colliers initiated the discussion with his observation of maximum terms being coined in commercial realty in the last 3 years. “I have been tracking the real estate market for 25 years now and the sector has evolved the most in the last three years. We are now talking about hybrid working, distributed work, return to office and innovative strategies respectively. We had the maximum amount of gross leasing this year close to 60 million square feet yet, job losses and inflation remain a major point of worry.” Rajat Johar- Managing Director – Delhi-NCR, Savills India added that while 2022 had been a good year across the board. What happens in 2023 will be accumulation of many factors. “The Russia-Ukraine war, US economy, India inflation, rupee/dollar devaluation, are some of the factors that will decide how next year will pan out. We are in turbulent times and should take each year at a time. Having said that, we bounced back pretty well. The vacancy rates what they were during the pandemic and post-pandemic have come down drastically and we see that trend continuing but there is going to be a lot of supply coming in too. It looks like a robust year on both the demand and supply sides and we will start 2023 with as much rigor.” Khair Ull Nissa-Executive Director- WTC Services, World Trade Center shared her belief that this is the time of India. “The companies, corporates and investments are looking at Indian market from a global perspective. We have a large MSME and start-up ecosystem. The decrease in IT and ITES demand for office space will be balanced by Indian corporates and unicorns. We are seeing a lot of demand coming from manufacturing and BFSI sector.” Rohit Kaul- Head of Operations – North, Embassy Services Pvt. Ltd highlighting his own experience said, “Embassy Group manages two of its largest parks in Noida NCR. We have a mix of IT Sector and other sectors and have witnessed 50% return to office, of which most are those that reside near the office. As an IFMS Company we have provided them the, global standard facilities and services, inducing confidence to work from office. In addition, Embassy Group has diversified into industrial parks, business parks and co-working, that has resulted in the growth of the company.” Paras Arora- Founder CEO, Qdesq stated, “Flex was born in 2014-15 and then the whole co-working revolution started with mere 1% of office segment being flex. Today, out of the total office stock which is A & B around 18% is flex. The sector is growing organically, with demand for smaller offices, on-demand spaces, flexible pricing rising in the sector. Underlining parameter would be data sensitivity and technology adoption. By our estimation, by 2026 co-working would be around 35-38% of the total office stock. We are extremely bullish as it is in the recession, the demand for smaller offices and serviced offices goes up.” Gaurav Karnik- Real Estate National Leader and Tax Partner. EY India added, “The important aspect of return to office is, how good your office is in terms of facilities, security and wellness. The challenge for SEZs is the stringent rules and regulations. Currently, the concentration of office is mostly in tier I cities, but we are seeing a lot of co-working coming up in the tier-2 cities. From a demand perspective, most foreign companies continue to outsource their captive centres to India. In the last two years, a lot of foreign institutional money is coming to real estate from PE funds, the pension fund to sovereign funds. They have all been buying into the office space. We have three REITS in the last two years, two in the middle of the pandemic. Lately we have also seen lot of investment in the data centres and warehouses. The investors have the confidence and they are choosing established names as partners to form the platforms. With Rupee devaluating, Indian commercial real estate make it even more attractive for foreign investors.” Office real estate is set to see healthy returns as major companies are switching back to offline work. The right location with the right amenities will bring employees back to the office. India is the gateway to Asia. We are getting a lot of interest from various countries, and corporates which are looking for investments in India. The Indian commercial realty too is becoming more people centric, human centric and employee centric.” Khair Ull Nissa In office eco-system, tech had been mostly on the discovery and the transaction side and now it is on rise on the experience side. Software to see office floor plan, book desks, meeting rooms and digitization of use of office space, visitor management, access control, cloud based data are some of the experience side technologies gaining ground. Paras Arora The whole one-office strategy is definitely disrupted. Remote working is no longer working from home but from near home or an on-demand location. An extreme amount of flexibility is becoming the way of life. Companies are gearing up from technology point of view to suit the new remote working model. Co-working may not be a tenant anymore but an amenity in the building. Developers are creating their own flex spaces, flex product, using platform or technology to book and helping occupiers reduce square footage and use more common amenities in the building. Rajat Johar Today every client is very clear that it is not going to be complete office, it is going to be core and flex and it can’t be one shoe fits all. Flexible space is also evolving from managed offices at upper end and business centres at the lower end of the spectrum. The new buzz in town is the third space. Earlier we were saying, work from office, work from home but not its work from third space. Restaurants, hotels and private clubs have found new revenue streams by hosting remote working session. Rohit Kaul For getting people back to work there should be a wow factor. It needs to evolve into a place for collaboration, creativity, and learning, Improve work environments to boosts employee engagement and well-being, thereby encouraging attendance and retention. Amit Oberoi There is big future for Proptech in real estate. Developers are automating the whole process from the construction to leasing, for efficiency, improvement in processes and due diligence. Banks are funding proptech companies through investments and developers are creating accelerator program to mentors young start-ups. Gaurav Karnik
Tags : office market view business space Amit Oberoi- Head of Occupier Strategy Asia Colliers Rajat Johar- Managing Director – Delhi-NCR Savills India Khair Ull Nissa-Executive Director- WTC Services World Trade Center Rohit Kaul- Head of Operations – North Embassy Services Pvt. Ltd Paras Arora- Founder CEO Qdesq Gaurav Karnik- Real Estate National Leader and Tax Partner. EY India