There has arguably never been a more disruptive time to be in business. The orthodoxy surrounding the global economic cycle has been severely challenged. The onset and subsequent aftermath of the Global Financial Crisis (GFC) has reset the definition of ‘normal’, and instilled a new, more cautious corporate mindset.
“The employees of the future and their demand from the workplace will change the way we look at commercial real estate and the global cities of the future will be built on this demand. The need for businesses to respond quickly to changes in operational conditions has never been greater,” said Dr Lee Elliot, head, commercial research, Knight Frank.
The three major factors that will change the workplace scenario are – war for talent, advent of technology and restructuring of the current business scenarios. Currently, the city’s commercial rental space is robust, and in Bengaluru, it will grow by 10.9 per cent till 2019.
However, till date, the commercial real estate in the city has flourished on the need of the industry but the flexibility of the workspace with modern amenities was a far call. But as the floodgates of globalisation were opened, the entry of multinationals has changed the way the commercial space is perceived, especially when it comes to employee retention.
“The Indian market is currently very volatile, and with the disruption brought in by technology, the needs of the companies – both Indian and global – are changing. The work station has become compact and the era of activity-based working (ABW) space has dawned. Also, the fast-changing tech demands has brought in the concept of co-working spaces as the industry is being more conducive to startups,” said Nicholas Holt, head, research, Knight Frank Asia Pacific.
According to the Knight Frank Global City Report, 2017, the choice of an anchor location or building to house a business or business function is not a marginal decision anymore. It is a decision that is increasingly linked to the pursuit of corporate strategic goals.
As such, it is a decision which has keen interest and active input of a broad array of decision-makers. Contrary to much recent interpretation, it is not a decision based simply on a desire to reduce exposure to real estate costs. Currently, 55 per cent of operating costs are people, whereas real estate costs amount to only 15 per cent, and hence companies are focusing on real estate conducive for its employees, said Dr Lee.
Commenting on the real estate growth in the city, Dr Samantak Das, chief economist and national director, research, Knight Frank India, said that the commercial space in the city is also changing at a rapid pace. Though the growth of companies in Bengaluru has decreased, but the demand is still robust as technology and advent of startups have changed the way people look at commercial real estate. This is going to lay the future for commercial real estate in the city.
by Nitindra Bandyopadhyay Courtesy Bangalor Emirror