THUMBS-UP FOR SERVICED SPACES
Economic Times, ET Realty, April 10, 2009, Page 1
The global slowdown has affected the real estate sector heavily; however, it seems that the commercial market is slowly gaining back its momentum. With the serviced offices’ market gaining popularity in Delhi and NCR, the future for this segment of real estate looks bright and sunny. ET Realty explores
Tanvi Rustagi
Serviced apartments are surely heard of, but what about serviced offices? This is the latest trend in the commercial market. Serviced office space is primarily meant to provide end-to-end facilities for companies or professionals, to carry out their regular business operations. The space is inclusive of all the necessities and amenities that are required for an organisation to function smoothly, like furnishing, air conditioning, power back-up, housekeeping, security, valet parking, reception, pantry services, etc.
Serviced offices are usually fully equipped offices, with no start-up costs, flexible terms and an already available high-tech telecom and IT infrastructure. Hitesh Sahni of HSN Realty Services, a real estate consulting firm based out of Delhi explains, "Serviced offices, also known as managed offices, business centres, office business centres, executive suites or executive centres, are mostly established in the business districts of large cities the world over."
There are reasons galore for a company to rent a serviced office, starting with the fact, that commercial spaces in large cities like Delhi and NCR are quite expensive and sometimes out of the reach of many. And, if it's a posh locality, it is pretty much out of question. However, a serviced office makes it possible for a new company also to have its office in a prestigious locality, without having to pay the exorbitant price. Another reason is the fact that, these offices are fully furnished and are ready-to-move-in. This relieves the occupants from the headache of furnishing the entire place, thinking about the interiors and the numerable issues involved with furnishing a work space. Apart from these, the cost of electricity consumption, air-conditioning and power back-up is normally included in the deal for normal working office hours. Serviced offices also provide Internet, included or extra, depending upon the speed package and negotiations along with dedicated telephone lines priced as per the lease conditions. Some of them even offer housekeeping and valet parking facilities along with dedicated parking slots.
One big advantage of a serviced office is the flexibility in the leasing and rental format. Harmeet Singh, Director, Credence Relocity informs, "There are various commercial arrangements available that are determined by various variables including the area required as dedicated space. While the cost of some shared amenities would definitely be factored in, there is a possibility of offering some optional amenities or value added services. The rent also depends on the duration of lease or occupancy, where generally, the hourly and daily rentals would be higher than the longer duration commitments. There is also an option of advance blocking or reservations. As these office spaces have a more dynamic occupancy pattern, the facility providers encourage advance booking and one might even get a discount on booking in advance." Rentals vary from Rs 15,000-20,000 per workstation, but can be as high as Rs 45,000-50,000, depending upon the size, extent of instrumentation, general enablement and the office location.
But, who really takes up these spaces? "Most of the time, newer companies and those in a 'start-up' situation are particularly interested in serviced offices for many reasons, including the possibility of shorter range lease periods (starting from one month, but can also be for long periods of up to several years)," states Prashant Solomon, JMD Chintels India.
Solomon explains that those businesses who are in a start-up situation are rarely in a position to afford the more conventional lease of 5 to 10 years and can now use serviced offices to get their businesses off the ground. But, it is not just for start-up and new companies. It seems that the slowdown has probably been a blessing in disguise for the serviced offices market as Solomon informs that larger firms who find themselves in a position where they need to downsize their overheads could also benefit from serviced offices. The clientele includes not only starts-ups, but, even established MNCs and industrial houses in India. The break-up of the sectors which hire serviced offices is 28 percent share is of the IT and telecom businesses, 16 percent is finance / insurance and banking, 27 percent is tertiary services like consulting, logistics, design, HR and the rest two percent is occupied by miscellaneous sectors. Though, it is the slowdown which has brought it into the limelight, the trend of serviced offices has been picking up in India for a while now. Madhusudan Thakur, Country General Manager of Regus, provider of workplace solutions says, "While the prices are constantly under considerable downward pressure, we are noticing an increase in enquiries from start-ups and new Indian businesses, along with rationalised approach towards various corporates. Our network of 22 centres in nine cities allows us to tap into this renewed demand and spells big cost savings with a solution for flexible working for corporates. Regus has recorded a 25 percent increase in revenue with a similar growth in profits in 2008 as compared to 2007."
This clearly outlines the need of serviced offices in the current global scenario, MNCs and even other industries are looking for furnished and compact offices, which are not only convenient, but also cost effective. As far as the future of serviced offices is concerned, Ashish Malhotra, Manager, Markets, Jones Lang LaSalle Meghraj, points out, "Assuming that foreign firms continue to occupy Indian office spaces at the present scale, we see the concept of serviced offices continuing to proliferate and emerge as a market segment in its own right."
FOCAL POINT
Serviced offices are usually fully equipped offices, with no start-up costs, flexible terms and an already available high-tech telecom and IT infrastructure Rentals vary from Rs 15,000-20,000 per workstation, but can be as high as Rs 45,000-50,000, depending upon the size, extent of instrumentation, general enablement and location
Economic Times, ET Realty, April 10, 2009, Page 1
The global slowdown has affected the real estate sector heavily; however, it seems that the commercial market is slowly gaining back its momentum. With the serviced offices’ market gaining popularity in Delhi and NCR, the future for this segment of real estate looks bright and sunny. ET Realty explores
Tanvi Rustagi
Serviced apartments are surely heard of, but what about serviced offices? This is the latest trend in the commercial market. Serviced office space is primarily meant to provide end-to-end facilities for companies or professionals, to carry out their regular business operations. The space is inclusive of all the necessities and amenities that are required for an organisation to function smoothly, like furnishing, air conditioning, power back-up, housekeeping, security, valet parking, reception, pantry services, etc.
Serviced offices are usually fully equipped offices, with no start-up costs, flexible terms and an already available high-tech telecom and IT infrastructure. Hitesh Sahni of HSN Realty Services, a real estate consulting firm based out of Delhi explains, "Serviced offices, also known as managed offices, business centres, office business centres, executive suites or executive centres, are mostly established in the business districts of large cities the world over."
There are reasons galore for a company to rent a serviced office, starting with the fact, that commercial spaces in large cities like Delhi and NCR are quite expensive and sometimes out of the reach of many. And, if it's a posh locality, it is pretty much out of question. However, a serviced office makes it possible for a new company also to have its office in a prestigious locality, without having to pay the exorbitant price. Another reason is the fact that, these offices are fully furnished and are ready-to-move-in. This relieves the occupants from the headache of furnishing the entire place, thinking about the interiors and the numerable issues involved with furnishing a work space. Apart from these, the cost of electricity consumption, air-conditioning and power back-up is normally included in the deal for normal working office hours. Serviced offices also provide Internet, included or extra, depending upon the speed package and negotiations along with dedicated telephone lines priced as per the lease conditions. Some of them even offer housekeeping and valet parking facilities along with dedicated parking slots.
One big advantage of a serviced office is the flexibility in the leasing and rental format. Harmeet Singh, Director, Credence Relocity informs, "There are various commercial arrangements available that are determined by various variables including the area required as dedicated space. While the cost of some shared amenities would definitely be factored in, there is a possibility of offering some optional amenities or value added services. The rent also depends on the duration of lease or occupancy, where generally, the hourly and daily rentals would be higher than the longer duration commitments. There is also an option of advance blocking or reservations. As these office spaces have a more dynamic occupancy pattern, the facility providers encourage advance booking and one might even get a discount on booking in advance." Rentals vary from Rs 15,000-20,000 per workstation, but can be as high as Rs 45,000-50,000, depending upon the size, extent of instrumentation, general enablement and the office location.
But, who really takes up these spaces? "Most of the time, newer companies and those in a 'start-up' situation are particularly interested in serviced offices for many reasons, including the possibility of shorter range lease periods (starting from one month, but can also be for long periods of up to several years)," states Prashant Solomon, JMD Chintels India.
Solomon explains that those businesses who are in a start-up situation are rarely in a position to afford the more conventional lease of 5 to 10 years and can now use serviced offices to get their businesses off the ground. But, it is not just for start-up and new companies. It seems that the slowdown has probably been a blessing in disguise for the serviced offices market as Solomon informs that larger firms who find themselves in a position where they need to downsize their overheads could also benefit from serviced offices. The clientele includes not only starts-ups, but, even established MNCs and industrial houses in India. The break-up of the sectors which hire serviced offices is 28 percent share is of the IT and telecom businesses, 16 percent is finance / insurance and banking, 27 percent is tertiary services like consulting, logistics, design, HR and the rest two percent is occupied by miscellaneous sectors. Though, it is the slowdown which has brought it into the limelight, the trend of serviced offices has been picking up in India for a while now. Madhusudan Thakur, Country General Manager of Regus, provider of workplace solutions says, "While the prices are constantly under considerable downward pressure, we are noticing an increase in enquiries from start-ups and new Indian businesses, along with rationalised approach towards various corporates. Our network of 22 centres in nine cities allows us to tap into this renewed demand and spells big cost savings with a solution for flexible working for corporates. Regus has recorded a 25 percent increase in revenue with a similar growth in profits in 2008 as compared to 2007."
This clearly outlines the need of serviced offices in the current global scenario, MNCs and even other industries are looking for furnished and compact offices, which are not only convenient, but also cost effective. As far as the future of serviced offices is concerned, Ashish Malhotra, Manager, Markets, Jones Lang LaSalle Meghraj, points out, "Assuming that foreign firms continue to occupy Indian office spaces at the present scale, we see the concept of serviced offices continuing to proliferate and emerge as a market segment in its own right."
FOCAL POINT
Serviced offices are usually fully equipped offices, with no start-up costs, flexible terms and an already available high-tech telecom and IT infrastructure Rentals vary from Rs 15,000-20,000 per workstation, but can be as high as Rs 45,000-50,000, depending upon the size, extent of instrumentation, general enablement and location
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1 comment:
I totally agree more new business startup company using the serviced offices. as it more affordable and less risk.
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