CBRE South Asia (P) Ltd, announced the findings of its latest report, India Office Occupier Survey IOOC) 2019: What does the future hold?” The results of this year’s survey highlight the changing priorities of occupiers – a result of which are the strategies occupiers are executing for the business lines and employees they serve.
Anuj Puri, Chairman, Anarock Property Consultants
Chennai:
As per the findings, the intention to expand the office portfolio by occupiers in India is much higher than APAC, where only 45% of respondents (in comparison to India’s 79%) plan to increase their corporate real estate portfolio.
As per the report, office occupiers are currently facing three key challenges in India:
Changing nature of jobs: jobs are becoming increasingly digitised in the country, resulting in occupiers’ need to attract/retain adequately skilled i.e. ‘right’ talent
Macro RE challenges: Our survey revealed that the top challenges faced by office occupiers in India mainly related to the lack of readily-available space to move in
Building level challenges: Occupancy cost, parking, disaster readiness of buildings etc. were the key building level challenges identified by office occupiers.
For instance, on challenges within a building, nearly 70% of respondents across most tenant sectors listed increasing occupancy costs as the biggest challenge while locating within a building. About 60% of tech and BFSI respondents viewed parking as a key challenge. Those with long-term plans of staying in the same premises – i.e. half of the large-sized tech/BFSI respondents – listed lack of periodic building and infra upgrades as an impediment for smooth office operations. Most global companies or domestic firms with a large-sized office portfolio faced disaster readiness and safety & security as bottlenecks.
The findings of the survey also suggested that majority of the respondents have plans of expanding headcount growth in India over the next two years. In fact, the headcount growth is expected to be higher than office portfolio growth over the next two years. Moreover, more than 70% of respondents cited that the main reason for increase in headcount would be linked to their expansion plans in Tier-I cities specifically - underlining their belief in being able to recruit the right talent in these locations.
Key takeaways of the report:
Almost 80% respondents intend to expand office portfolio, 90% plan to continue headcount growth over the next two years
More than half of the respondents listed software development, R&D, knowledge centre as most preferred business functions for expansion over the next two years
More than half of the respondents identified expansion as their top RE strategy over the next two years
It also highlights how real estate executives are aware of the operating business environment and intend to balance today’s requirements for efficient and experiential workplaces with that of future expectations. Anshuman Magazine, Chairman, India & South East Asia, CBRE said “Corporate real estate in India is transforming, with focus on strategic models, technology and workplace innovation. Occupier intention of expanding office portfolios highlights the changing landscape in the operating business environment. The priority also lies in balancing today’s requirement for efficient and experiential workspaces with that of the industry’s future expectations.”
As per the findings, the intention to expand the office portfolio by occupiers in India is much higher than APAC, where only 45% of respondents (in comparison to India’s 79%) plan to increase their corporate real estate portfolio.
As per the report, office occupiers are currently facing three key challenges in India:
Changing nature of jobs: jobs are becoming increasingly digitised in the country, resulting in occupiers’ need to attract/retain adequately skilled i.e. ‘right’ talent
Macro RE challenges: Our survey revealed that the top challenges faced by office occupiers in India mainly related to the lack of readily-available space to move in
Building level challenges: Occupancy cost, parking, disaster readiness of buildings etc. were the key building level challenges identified by office occupiers.
For instance, on challenges within a building, nearly 70% of respondents across most tenant sectors listed increasing occupancy costs as the biggest challenge while locating within a building. About 60% of tech and BFSI respondents viewed parking as a key challenge. Those with long-term plans of staying in the same premises – i.e. half of the large-sized tech/BFSI respondents – listed lack of periodic building and infra upgrades as an impediment for smooth office operations. Most global companies or domestic firms with a large-sized office portfolio faced disaster readiness and safety & security as bottlenecks.
The findings of the survey also suggested that majority of the respondents have plans of expanding headcount growth in India over the next two years. In fact, the headcount growth is expected to be higher than office portfolio growth over the next two years. Moreover, more than 70% of respondents cited that the main reason for increase in headcount would be linked to their expansion plans in Tier-I cities specifically - underlining their belief in being able to recruit the right talent in these locations.
Key takeaways of the report:
70% occupiers to prioritise installation of PropTech and Innovation in workplace Strategies
Almost 80% respondents intend to expand office portfolio, 90% plan to continue headcount growth over the next two years
More than half of the respondents listed software development, R&D, knowledge centre as most preferred business functions for expansion over the next two years
More than half of the respondents identified expansion as their top RE strategy over the next two years