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India’s young middle class boosting economy

With the significant economic, demographic and technological strides that India is taking, the future of corporate real estate (CRE) on the subcontinent looks robust, according to a new research study from CoreNet Global on the state of CRE readiness to serve the India market.

“Increasing urbanisation, a strong middle class and a young population will continue to propel India further,” the report indicates. “All of these factors will continue to enhance the role CRE can play in India’s business environment.”

Despite India’s explosion onto the world economic stage, many Indian-national companies are still in a ‘catch-up’ mode on increasing the degree of global business-management sophistication in the corporate sector. The CoreNet Global report identifies the CRE function in India as “nascent (but) heartening”.

“With the recent slowdown of the Indian economy, there has been a spotlight on CRE and how it can be optimised to leverage its value for corporations,” said CoreNet global senior research associate Sonali Tare, who oversaw the research project.

“CRE in India is relatively new. With the influx of multinational corporations, or MNCs, beginning in the late 1990’s and early 2000’s, the door opened for CRE to be regarded as a professional discipline there,” said Tare.

The CoreNet Global report examines other strategic facets of CRE as they correlate to India’s economy and culture, including alternative workplace strategies, or AWS.

“AWS is an approach that is gaining momentum in India, albeit slowly,” the research findings also show.

“In many companies, employees are able to tap into special budgets put into place by the employer to set up the adequate technology to work from home,” said Captain Srinivas, VP of global real estate and facilities management for Aditya Birla Minacs.

The report also points out how culture and society plays a role in challenges to add more mobility.

“Having to say that one might not have their own desk at work is difficult in India, as it is in many Eastern cultures,” according to CoreNet Global’s research.

The CoreNet Global report cites World Bank rankings showing India with almost 30 per cent of its 1.21 billion people living below the poverty line, but that as recently as five years ago, it was 37 per cent. Poverty is linked to another challenge: about 70 per cent of the country is still rural and relies on agriculture for its livelihood.

“The demographic dividend of India’s growing, young population is one of the key drivers of long-term growth,” CoreNet Global reports. “However, if this growth is to be leveraged adequately, employment opportunities will have to be generated.”

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