India - The Most Preferred Outsourcing Destination Among MNC’s – CBRE APAC Occupier Survey Report

More than 75% Multinationals consider India as preferred market for Outsourcing

82% Indian Companies look to increase headcount over the next 3 years

New Delhi, March 28, 2017 –  CBRE India Pvt. Ltd, India’s leading Real Estate Consulting firm today announced the findings of the 2017 Asia Pacific Occupier Survey Report. As per the report, India has emerged as the “most preferred outsourcing destination” owing to India’s formidable IT business process outsourcing (IT-BPO). Among Asia Pacific-based companies, 82% of Indian respondents plan to increase their headcount in the next three years, reflecting the country’s buoyant economy, steady progress in enacting regulatory reforms and booming outsourcing and ITeS sector.  Bangalore (29%), Mumbai (23%) and Delhi NCR (20%) respectively have emerged as the most preferred expansion destinations for companies.

 GROWTH

  •  Multinationals Focus on Emerging Asia in the Search for New Business , India and  China the top destinations

 PRIORITIES

  • The Evolution of Workplace Strategy

  • 50% of all multinationals will invest more in their workplace and space efficiency programs, ranking it as their main priority for the coming year 

OCCUPIER STRATEGIES

 

  • Locational and Building Section Criteria

  • Workplace Evolution

  • Use of Third Party Space

 CHALLENGES

 

  • Economic uncertainty as the main challenge to future operations

  • Technology Disruption the main emrging challenge

Corporates ​displayed strong intentions to expand in tier 1 cities with the technology and outsourcing hub of Bangalore receiving the strongest interest. The survey noted that with IT firms in Bangalore growing larger, an increasing number of companies are opting to expand in tier II cities such as Chennai and Hyderabad, which offer more space to choose from, lower operating costs and rapidly improving infrastructure.

Anshuman Magazine, Chairman, India and South East Asia, CBRE says, “India’s buoyant economy, steady progress in enacting regulatory reforms and booming outsourcing sector, coupled with a growing talent pool continues to make it an attractive outsourcing destination. With corporates increasingly adopting cost effective workplace strategies, we believe that key cities in the country will remain on the radar of domestic and multinational corporates looking to expand their operations.”

 THE INDIA STORY

 

  • India remains the favoured outsourcing destination

  • 82% Indian Companies and53% of respondents plan to increase their office headcount in the next 3 years

  • Bangalore (29%), Mumbai (23%) and Delhi NCR (20%) respectively have emerged as the most preferred expansion destinations for companies.

  • 22% companies look to buy their own premises in India

  • Challenges Cost Escalation 57%, Economic Uncertainty 47% and Poor Infrastructure 10%

  • 52% identified Workplace Strategy Evolution as their propriety

  • Occupiers plan to introduce more workplace formats for staff to choose from

  • Real estate cost, infrastructure, quality of building, Talent availability,  accessibility, Transport and security are the main factors driving location and  building selection in India

  • 50% of all multinationals will invest more in their workplace and space efficiency programs

While, multinational respondents identified economic uncertainty as the main challenge to future operations, whereas technology disruption and tighter legislation laws across APAC are being seen as emerging challenges that are set to impact their decisions relating to offshoring.Concerns in India largely relate to higher costs and economic uncertainty following the introduction of demonetisation at the end of last year, as well as the impact of the new U.S. administration. Poor infrastructure was selected as a unique challenge along with Power and public transportation bottlenecks in tier I cities which are prompting some companies to spread operations across multiple cities, a move which can also reduce risk by ensuring they avoid building critical mass in major BPO cities.

 Workplace Strategies emerged as the key trend from the report with corporates increasingly focusing on proactively adopting workplace strategies. According to the report, approximately 50% of all multinationals will invest more in their workplace and space efficiency programs, ranking it as their main priority for the coming year. The increased focus on space optimization is poised to accelerate a radical workplace change away from fixed desks to Activity-based Working (ABW). More than half of the survey respondents plan to implement ABW, compared to only 16% who plan to move to fixed desks.  As per findings on CRE Strategies in India for the next two years, 16% respondents in India want to be more flexible towards building quality;17% want to relocate to PBD (Peripheral Building Design) 33% focus on Efficient space utilization.

CBRE’s Asia Pacific Occupier Survey 2017 was compiled from a total of 450 responses; the analysis in this report largely focuses on the responses received from the 50 multinational respondents. Major sectors represented include banking and finance (32%), technology and telecommunications (14%), insurance (12%) and manufacturing (12%). Over 60% of multinational respondents were based in the West, with headquarters in North America (38%) and Europe (22%). Large corporations based in Greater China and North Asia accounted for another 20% of multinational respondents.

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Disclaimer:

Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
 

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.​

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