space management
Our Country’s commercial and social
settling has been transformed by the presence of IT Sector in the Country. It is looked upon as a most profitable centre
for multinational Companies (MNCs) to operate resulting which the prominence of
the Real Estate Sector has grown immensely through the years, particularly in
the commercial sector.
There has been a tremendous growth in
commercial real estate and it has led to growth in a city or city location as
retail, residential and hospitality projects and the same are designed around
commercial areas across the country. Certain factors are of critical importance
for the end user such as human resource availability, quality of the project,
political stability, location, infrastructure of the city and operational
costs.
It is not only difficult but complex
for companies to select property as it depends on several things. Every Company
keeps real estate as one of the key portfolio of its overall strategy as it
belongs to the high cost category. Human resource planning, financial planning
and operational factors are all interlinked with it. The location and development that a Company
propose as to have several plus points such as physical proximity to social
infrastructure like housing, digital connectivity, energy factors and better
design and services specifications.
The quality of the project decides the
selection of the development. Quality consists of basic construction quality,
design efficiency, infrastructure like Power load and car parking, effective
use of IT in running the project, savings in energy and the delivery of the
project on schedule. Redundancies in
power and telecom are specially emphasized by these MNCs.
The feasibility, suitability and
acceptability of a Project are determined through exhaustive qualitative and
quantitative analyses. A multitude of factors have to be objectively analyzed
apart from only pricing. The soaring cost is one of the main hurdles faced by a
developer who cannot handle sudden increases in cost and this leads to
cost-cutting which affects the quality and delivery of the project. The cost of construction ranges from between
Rs.4,500 to Rs.5,000/- per Sq.ft., to Rs.6,000/- per Sq.ft. Timelines for
completion vary according to the project. Availability of labour, plant and
machinery besides various statutory approvals affect the project deliveries.
A Company which propose to expand or
begin its operations will find that deciding upon the location itself is one of
the key elements. As Central and suburban regions in Tier- 1 cities face lower
supply, the marks in the peripheral regions have become more eminent. As the
operational costs in Tier 2 and Tier – 3 cities is comparatively lower, they
are also fast becoming alternate destinations for commercial activities.
Regions in the periphery around 75 KMs
from the centre of metros are more affordable in real estate options than the
central or suburban ones. Testimonies to this shift can be seen in certain
predominant areas in Bangalore, Hyderabad and in Chennai. More than 75% of the total supply in Tier 1
and Tier 2 cities comes through the peripheral regions. The costs of land in
these areas being much lower might be the obvious reason in comparison to sites
closer to or in the heart/centrally located places in city. Expanding in the
peripheral region has its own problems such as high costs of transportation,
lack of suitable social infrastructure and unwillingness of employees.
MNCs usually prefer peripheral
locations as they can bring together their facilities in the form of a campus
and thereby make their own environment.
According to statistics peripheral areas have the most new developing
projects such as residential townships, shopping malls and other kinds of
social infrastructure. One can witness
in the coming years wherein multi-tenanted developments will take root in
peripheral locations and if MNCs will be drawn to the infrastructure
developments in these regions or whether the MNCs will itself turn to them for
making their own excellent campuses.
Integrated townships that are scheduled to be set up in these locations,
in Bangalore, Chennai, Gurgaon, Pune and Hyderabad are expected to influence
the real estate market in marked manner in the near future.
Cost benefit and availability of
talent are some of the factors that are viewed when small cities are
considered, as compared to peripheral locations. Some of the cost benefits are lesser cost of
real estate, lower cost of living, anchor tenant opportunities and hardly any
transportation costs. Smaller cities have the advantage of possessing a fresh
talent pool and this makes them good locations to expand and operate from.
Government support is another important benefit. Smaller cities are often given a fillip by
concerned State Governments so hat pressure from metropolitan cities is eased
where providing infrastructure is concerned, and they offer free land, fiscal
rebates etc., as incentives to them.
Smaller cities also struggle with large scale issues in infrastructure
like connectivity to main cities, entertainment areas, cultural problems,
quality of transportation, roads and high quality infrastructure.
Corporate requirements have
specifications that need more attention and the city selection is not the only
part of the location selection. Sectors like marketing, banking etc., that are
non-IT sectors usually give preference to city centers or suburbs from which to
operate if permitted by the availability and costs. However, IT or IT related
companies require a larger amount of space which limits them to peripheral or
suburban locations. A large part of
Office development projects occupy space in IT parks. The relaxed floor space
index and the speedy growth of the IT and IT related sectors serve to attract
more number of real estate developers.
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