New expectations

RICS report places ethics at the core of professional values and figures out challenges for the future in real estate.

May 29, 2015 04:58 pm | Updated November 13, 2021 10:45 am IST

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A host of new forces are reshaping our world. Never before had so many drivers combined to hasten the pace of development. Business models have undergone huge metamorphosis. Technology is bringing in changes every single moment. Greater connectivity and onslaught of new information are dictating human behaviour. Skills too are also continually merging and splitting, thereby placing new demands from training institutions.

Real estate and construction industry are being called upon to develop responses to these changes. Urbanisation is the topmost on the list of challenges faced by the sector. The urban population in the world accounts for 54% people today. By 2030 the figure would go up to 60% and by 2050, two-thirds of the world’s people would be living in the cities. India is one among the six countries (others being China, Nigeria, Indonesia, Pakistan and Democratic Republic of Congo) which will contribute 50% of the urban growth. “At the current rate”, says Dr. Louise Brooke, President, Royal Institution of Chartered Surveyors (RICS) and Managing Director, Brooke Smith Planning, “India will need to build a city of the size (606 sq. km) and population (2.7 million) every year”.

Forays of technology

New technology has altered business models as well as employment pattern. Three billion people have access to Internet currently and life is increasingly becoming dependent on smart sensors and intelligent appliances. Younger surveyors (24-30 year age group) use mobiles to capture the date onsite. Similarly, younger customers insist on urgency of email responses on par with cellphone. Builders’ websites provide updates to consumers from any part of the world. The size of the middle class will be of the order of 4.9 billion across the world by 2050. As cities densify increasingly, environment will be under new pressures and inequality and instability would be on the rise. These new challenges are calling for strong leadership from the sector.

Life and work integrate

Today’s consumers are more informed and quality conscious. The realty market has to satisfy them with commensurate result which urges increased transparency and compliance with standards which realty in the developed countries of the world has been offering. Ethics has to be at the core of professionals in the construction and real estate industry. Globalisation has integrated businesses, and international standards are the need of the hour. As workforce is being drawn from diverse geographical regions and ethnic origins, the industry will have to cater to different needs and lifestyle choices. An increasing number of people will work from remote locations and during non-standard hours, integrating life and work will follow a very different pattern. With life expectancy expanded, it is quite possible that worksite and office personnel will range in age between 20 and 65 taking in people from four generations resulting in varied and complex work dynamics.

Rates will remain high

Anil Pathak, CEO, Paracor Capital Advisors, foresees no possibility of land becoming any cheaper. “With too much money chasing too few deals, the investors may be looking for 25% return on their investments”, he anticipates. Hardeep Dayal, who heads the GVK Real Estates, feels that with Real Estate Act being a reality now, companies with good records, compliance with standards and on-schedule will stand the test of time. According to Ravi Ahuja, Executive Director, Cushman& Wakefield India, last year saw absorption of 35 million sq. ft. of commercial space and the sector may look forward to this rising to 45 million sq. ft annually in the next to three years. He feels taxation policies have undergone rationalisation demand for better quality and standards are spiralling.

Blending specialisations

While there is general optimism about the housing sector regaining vibrancy what with the Government’s unveiling of ‘Housing for All by 2022’ policy, Apurva Muthalia, CEO, Aditya Birla Real Estate, says the luxury residential sector has suffered a double-whammy in the last two quarters. “Most of it is not saleable and the developers may have to revisit them”, he guesses. Vamshi Krishna Kanth, Head, Valuation Services, CBRE South Asia, and Joe Verghese, MD, Colliers International, see the urgency for merging of several specialisations and the need for construction engineers to gain insight into firefighting, H-VAC, glazing, landscaping, and financing patterns. Vamshi says the days when people thought of real estate sector being the dumping ground for black money were over and international standards are making shady financing impossible. Hardeep Dayal urges setting up training institutions for niche specialisations.

Talent drives growth

Anshul Jain, CEO, DTZ, considers Bengaluru the real estate capital of India as the city absorbed 10 to 12 million sq. ft of space during the last two to three years. At the current rate, the city would have no space left in 10 years, he predicts. Capt. Prasad, Director, Cisco Systems, feels that it was availability of abundant talent which has acted as the principal driver of growth. Figuring out incoming changes, he says the future spaces will blend life and work seamlessly.

He says the future workspaces will enable users to decide beforehand which café to visit in the premises, access its menu, know the calorie intake a specific food offers, which car park offers space, and if a particular employee has boarded the company transport, will inform a janitor which trash-bin has to be emptied and what kind of trash it contains.

The author can be contacted at maqsiraj@gmail.com

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