One of the direct benefits of India’s upward move in the Ease of Doing Business ranks was the growth of the commercial real estate in India. Indeed, the government’s reformatory and incumbent measures helped boost the overall transparency in the real estate market. More and more MNCs are eyeing the Indian market now. And this scenario proved further favorable to the Corporate Real Estate (CRE) segment. With more and more commercial floors being leased out, the need for CRE is also gaining momentum. Team RealtyMyths got an opportunity to understand this phenomenon from Mr. Sathish Rajendren, Co-Chairs- CoreNet Global India Chapter & COO Knight Frank (India) Pvt Ltd. CoreNet Global is a non-profit association that represents more than 11,000 executives in 50 countries with strategic responsibility for the real estate assets of large corporations. Here are the excerpts of the interaction.
RM: How is the overall market for corporate real estate in India? Given the fact that more MNCs are now heading to India, do you see any surge in its demand going forward?
SR: Corporate real estate is growing at an unprecedented speed. The year 2018 saw record transactions with over 46 msf being leased in the year. There is demand from Indian and Global companies in recent times mostly due to stability and economic growth seen in recent years.
RM: How is the response for CRE from the Start-Up community? There are many Start-Ups who are either leasing out large spaces or are even buying lands for corporate developments. Do you feel they can become one of the core markets for you?
SR: Start Up is an integrated part of office space growth. Which is why CRE in the Start-Ups is extremely important as their growth trajectory varies. Much like all the corporations, Start-Ups also have to ensure that their real estate strategy is profitable.
Yes, Start-Ups can be a good market.
RM: Why a corporate conglomerate should hire a CRE executive? What additional benefit a CRE executive bring on the table other than managing a clients’ real estate operations?
SR: Conglomerates have to be prudent and rational about the use, purchase, sale, and disposition of real estate which is a key strategy for maximizing company bottom line and maintenance of the top line. To ensure that real estate is an asset and does not become a liability, conglomerates often turn to CREs for advice.
RM: Of late, the smart real estate technology has started transforming the real estate life cycle. Do you agree? What’s the role of a CRE executive in the adaptation of these technologies?
SR: The traditional role of CRE continues to shift away from hitting the target of exactly when, where and how much space is needed as businesses expand or contract, and is shifting more towards an emphasis on delivering services to support people, place, and technology. In order to do that, CRE professionals need to have a broader skill set and broader strategic thinking. The future is less about space and more about services and strategy.
And Yes, I very much agree as the Technology is re-shaping the corporate real estate industry like never before, especially with innovations in big data, the Internet of Things (IoT), artificial intelligence and machine learning, robotics, etc. It’s obvious that the CRE executives are under ever-increasing pressure to meet clients and end users’ expectations, reduce operating cost and work each day with the sense of control and confidence. Having an open and changed mindset in adapting these technologies, a very important role for CRE Executives is to look for a long term and enterprise-wide solution with technology, if this is not done CRE executives will continue to spend significant time and resources in managing modern and legacy IT infrastructure.
RM: How is CoreNet transforming the overall Corporate Real Estate scenario in India?
SR: CoreNet Global is focused on sharing the global trends of CRE, technologies, learning sessions like QPCR, MCR and SLCR, to help Indian CRE professions to gain global insights and bring them at par. CoreNet Global’s Mission is to advance the practice of Corporate Real Estate through Professional development. And this transformation is being fulfilled by research and knowledge transfer, global best practices, international standards, and strong industry networks.