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India is sitting on a massive opportunity

India is sitting on a massive opportunity

In the last five months, the new world order has emerged wherein work from home has become the norm which is unlikely to end anytime soon. What is the current scenario of commercial real estate in India? When is the market going to bounce back?

While it is true that a lot of companies are giving a serious thought on making work-from-home the norm in the post-pandemic world, I believe this will be more prominent in case of IT-related sectors and once the pandemic subsides, offices shall become vibrant spaces yet again. Some employees will continue to work-from-home in the medium term or even permanently, however the extent of WFH will be restricted due to lack of the social engagement, data protection issues, infrastructure problems and organisational culture issues. Organizations will start investing in restructuring and remodelling office spaces with keeping the health of their employees in mind.

Despite the current situation, from a sustenance perspective, we are confident that commercial real estate will continue to be one of the major growth drivers for the progress of Indian realty sector in the coming years. Commercial real estate is a very organized sector with India’s top developers controlling 650 mn sq ft. With the advent of new segments like data centres and REITS, the recovery of the sector will be much faster. In line with this, we are in the process of launching 0.6 million sq ft of commercial office space. Furthermore, 16 million sq ft of office space will be developed through existing land bank available with the company. We have signed term sheets across multiple cities which will give additional 22 million sq ft and our goal is to reach 45 million sq ft in the next 7-10 years.

This year, between January and June around 11 million sq ft of commercial space has been committed and I believe another 10 million sq ft plus will be committed in the rest of the year, which means 20 million sq ft - despite lockdown and concerns around WFH will still get committed in India, especially when there is less supply, which is great.

In conclusion, the events and disruption in relation to Covid-19 are a Black Swan, a once in a generation event and has caused unprecedented loss of physical life and dented business confidence. Within real estate, certain asset classes, like retail will continue to stay affected over a relatively long period, while other sectors like data centres, warehousing, cloud kitchens and the co-working sector may see an uptick in demand in the immediate to medium term. Commercial real estate will come back more robust over the medium to long term on the back of strong fundamentals and India will maintain its competitive advantage as the preferred IT, offshore and knowledge provider location for US/ global clients.

With the labour force back in their hometown due to Covid-19 and not expected to be back soon. How are you planning to complete your unfinished projects?

We have already started construction at most of our unfinished project sites because we experienced less remigration of our construction workers. We tried to provide accommodation to as many workers as we can at our sites itself and took necessary preventive measures to keep our people safe there. So by the time restrictions were lifted, we had enough workforce at each of our locations to commence the construction work again. It is imperative to bring comfort to construction labour. So, give them a safe work environment. We have also started Worker Welfare programmes on our sites to make them feel safe. Even during pandemic, we made sure they have all sorts of facilities.

Currently, three commercial projects are under construction -Intellion Park and Intellion Edge in Gurugram and one in Ghansoli. Intellion Park Gurugram is nearing completion and 8 lac sq ft will get ready by November while remaining 8 lac will be completed by March- April 2021. Intellion Park Navi Mumbai is of 7 mil sqft, of which half million sq ft we are commencing construction by November. Hence, we have 12-14 million sq ft at various stages of planning and development. The beginning of the next year will also witness the launch of 3 residential projects in Mumbai: a re-launch in Mulund and fresh launches in Andheri and Chembur.

What are the technologies you will be deploying for faster completion of commercial projects?

Design is more software-driven than before and the use of system formworks like Mivan /Peri, etc has grown at an amazing speed in the last few years. High-rise construction equipment, including jump forms, are widely used. Concrete grades above M40 and upto M100 are in use and improve the durability of the structure. Home automation has seen very fast growth and stable adoption. Intelligent buildings with latest technologies around Security, Surveillance, Facility Management are commonplace. More and more buildings in precast concrete, steel and composite are coming up. Although there is scope for improvement, handling and lifting of material has seen a lot of mechanization. There has been a consistent shift toward innovative materials and techniques over traditional ones and this level of adoption of technology is only going to improve in the coming years.

The latest technological innovations that have captured imagination of construction industry worldwide are Virtual Realty /Robotics, 3D printing and prefab construction. In practical sense, real work in these areas has just taken off. New products and technologies enabling use of robotics to replace manual effort, 3D printed building or building elements and prefab construction are going to define the upcoming decade in the construction industry.

The fear of contracting Covid-19 is holding back employees from re-joining offices. How can an environment be created to allay the fears of the employee?

To enable safe resumption at the offices, we created a Back to Work Employee Handbook to educate employees about Covid precautions. To make it less pedantic and fun and informative – a mascot called Covid Warrior was introduced. A learning module was also created- which has to be mandatorily completed by employees who come to office- and it received a good response from the workforce.

On the Day 0 of Employee onboarding, the Human Resource and EHS team touch base individually to ensure the employee feel safe and secure to return to work. In our efforts to make Sites and Workplace Safe for Resumption, PPE / Training and Orientation is done by EHS teams, along with standard precautionary measures such as thermal screening, creation of safety markings in offices/sites and sales galleries, regular disinfection of sales galleries.

We also conduct a weekly assessment of health and wellness through online survey. Daily touchpoints by HR BP’ (Human Resource Business Partners) are done with Team Leaders and people who report sick. We have also identified Co-morbid conditions in employee and special attention is given to check their health status. At a time when social distancing is mandatory, in order to prevent emotional distancing among the employees, the HR Team has introduced the Sociabble app - say, an internal Facebook for the employees so they do not miss seeing their teams and colleagues on a daily basis. We also released a Special Health Advisory on periodic basis and a separate COVID awareness channel was created on Sociabble to disseminate health tips, safety awareness tips for employees.

In your upcoming projects and completed projects are you re-doing office space in conformation to social distancing and bring in technologies for prevention, identification and elimination of viruses? If yes, please elaborate

The Covid-19 pandemic is compelling the industry to look at wellness as a major priority area of building design and construction. As India slowly but steadily resumes work, developers need to consider all aspects of safety and upgradation of design features to accommodate measures that aid people during a pandemic.

Will it be an end for co-working space or will it emerge stronger? Which are the sub-sectors that are expected to perform better?

There is no doubt that the co-working sector was one of the worst hit sectors in this pandemic. However, this is a temporary situation and the demand for co-working commercial space will gain momentum in the next few months. This sector has posted remarkable growth in recent years. We can expect that trajectory to continue in the post pandemic world, as more global and local companies look for expanding their footprint in the country.

What is your take on warehousing & logistic, data centres and industrial parks? How will they shape up in future?

Office, Retail, Warehousing/Logistics have had robust demand. Budget 2020 put forth the government’s focus on the introduction of a policy to build data centre parks throughout the country. This reiterates the importance of a strong digital infrastructure in the country.

As per the latest CBRE report, investments are coming in to Data Centers where Mumbai leads 41% of Data centre capacity followed by 17% in Bangalore and 16% in Delhi. India is sitting on a massive opportunity. As a country we need to leverage the advantage of skill and technological developments available to us. Digitisation of processes will help due diligence faster and help acquisition immensely and eliminate the chances of frauds. The structuring of Industrial parks needs to happen like the IT software park movement that happened in India and now it is a 100 billion dollar industry. We need to pin responsibility, fix processes and departments to work in sync. Even during the pandemic the consumption of data increased by 15% in the country. Our Government is looking into the Personal data policy bill will help Data Centres. Similarly, the increasing demand of data, in an highly automated industry is another plus for the country. Lastly, India’ s advantage lies in its fast changing demographics and the increasing data footprints.

We, at TRIL, have already aligned our business strategy towards these developments in the commercial real estate sector, with the launches of two IT centres, Intellion Park and Intellion Edge in Gurgaon, as well as the upcoming Intellion Park that is planned to launch in Mumbai.

Office peaked in 2019 to 47 million sft net abruption in 8 cities, which is the highest ever in the history of India. Due to low vacancy in office and warehousing, office demand may temporarily reduce in 2020-21 to 25-30 million sqft but shall bounce again. However, demand fundamentals of all segments remain strong, given the demographic dividend & urbanisation in India. The recovery of the sector will now have to factor the impact of Covid-19.




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