‘There is pent-up demand due to record tech deals, hiring’

Anil Urs Bengaluru | Updated on May 04, 2021

Vikaash Khdloya, Deputy CEO & COO of Embassy REIT says long-term fundamentals of India’s office market remain strong

As global businesses become more tech-dependent and business execution becomes more geographically agnostic, Vikaash Khdloya, Deputy CEO & COO of Embassy REIT in an interview with BusinessLine, shares the prospects of business continuity during Covid-19 second wave and how office spaces are changing and shaping the company’s business. Excerpts:

What has been the impact of Covid-19 second wave on the company’s business?

The second wave has interrupted the back to work acceleration, which we were witnessing until a few weeks ago. We continue to work to keep our occupiers safe .

The long-term fundamentals of India’s office market remain strong, there is a huge pent-up demand due to record technology deals and hiring.

The current outbreak is a timing issue, but we are seeing tremendous growth in our customer’s businesses, particularly tech companies and large banking firms due to massive global investments to accelerate digital transformation.

How is the demand supply position of office space in key cities you are operating?

Bengaluru represents over 70 per cent of our portfolio and the city is currently running a low vacancy of 8 per cent.

It is the leading office market in the country - the market with the lowest vacancy, the highest absorption, the largest stock, highest technology export value and most global captive centres in India.

This gives us confidence for the bounce back post-pandemic.

As a more flexible, hybrid way of working has emerged, how is Embassy REIT gearing up to face this challenge?

At Embassy REIT, we provide a total business ecosystem – that includes the flexible and varied office premises that today's best occupiers desire – safe and secure, with an ESG focus, to cater to the international companies who continue to grow in our markets.

The fundamental need for the office remains, given now the widely acknowledged need for the workspace to act as the place for building culture, learning, training and innovation.

In our conversations with occupiers, they acknowledge the fact that while it may be possible to maintain an existing business on a remote working basis, there is a growing incidence of work from home fatigue.

Therefore, Grade A offices like ours will remain in demand by the biggest global companies to provide them flexible, productive and dynamic workspaces.

Along with technology companies, which are the other sectors promising?

With India being the digital talent nation, a leader in providing STEM talent for global businesses, we will see more growth in the coming years on top of the existing 44 lakh people employed in the sector.

As business execution becomes more geographically agnostic, our portfolio, with 43 percent exposure to tech occupiers and a further 31 percent to Global Captive Centres (GCCs), stands to gain as global firms continue to look to India for innovation, R&D, delivery excellence and cost-efficient solutions driven by the availability of this - highly skilled talent pool.

Besides IT and Financial services accelerating their digital transformation initiatives, large retail/CPG enterprises are increasingly relying on their GCCs for the transformation journey.

Published on May 04, 2021

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