With the hybrid work model adoption, the cracks in the real estate market are visible for all to see with some of the top economists predicting that the commercial real estate bubble is about to burst. While the debate for a complete return to office is ongoing as employers and employees weigh the pros and cons, according to one of the largest commercial real estate services and investment firm CBRE’s report titled India Live Workshop survey 2023, 82% respondents opted for hybrid working, choosing to spend three days per week in the office, with only 15% preferring a fully office-based model.

With 2024 in full swing, we spoke to Anshuman Magazine, CBRE’s Chairman and CEO - India, Southeast Asia, Middle East and Africa to understand space utilisation in 2024 by corporates, the evolution of collaborative workspaces and how sustainability remains at the heart of all corporate endeavours. 

From increased occupancy rates, business expansion in India to the growth opportunities in Tier-II cities and modern workspaces, Anshuman takes into stride the key influencers that will shape 2024 and the role of Gen AI in the mix. Excerpts from the interview: 

How do you see the role of the return-to-work trend amidst the growing demand for remote work impact the future of modern-day workplaces? How do you see companies across different regions balance the two opposing demands?

The return-to-work trend has prompted a re-evaluation of work models, with organisations currently embracing flexibility, technology, and employee-centric approaches to create a modern workplace that meets evolving employee needs. Balancing the two diverse demands requires a nuanced and dynamic strategy tailored to the unique circumstances and preferences of each organisation and employee.

Throughout 2022 and 2023, occupiers focused on bringing employees back to offices and stabilising space utilisation. While varied across cities and sectors, most firms have been able to increase occupancy rates relative to the past couple of years. Going forward, hybrid working models are likely to continue as a norm with the 'office-first' approach. Corporates have also indicated a higher preference to increase the size of their real estate portfolios in the long run, indicating their positive outlook on India as a preferred market for business expansion.

In 2024, a few occupiers would continue to place greater significance on Tier-II cities as the next growth opportunity owing to the presence of a skilled talent pool and developing infrastructure and connectivity. Employers are looking to provide an experiential workplace to employees that is not just amenable to various working styles but also provides comfort and promotes good health. These factors are pivotal in shaping the future of work, ensuring that organisations not only adapt to hybrid models as a temporary solution but also integrate them as a permanent and integral aspect of the modern workplace.

What are some of the essential aspects of collaborative workspaces that leaders need to keep in mind while designing the future of their workplaces?

As RTO planning continues to be at the top of corporate agendas, enhancing employee experience is one of the most critical factors. Corporates are focusing on designing collaborative workspaces that prioritise employee engagement, flexibility, and a seamless transition to hybrid work models. Being mindful of health and wellbeing are key concerns for employers, which has re-aligned employee wellbeing strategies. 

As the office remains the centre for collaboration, collaborative spaces for unscheduled catchups and social spaces for socialising have emerged as a top choice amongst ‘we’ spaces in the office. ‘Me/We’ spaces in the office include smaller meeting rooms accommodating upto five people. Additonally, as mixed presence collaboration with both in-person and virtual participants is now common, enclosed/soundproof spaces for individuals to take video calls/conference calls have become a priority.

It is imperative for firms to focus on sustainability as a key factor for the office sector and workplace design. There needs to be special consideration to the materiality, acoustics, lighting, ergonomics, and placing a balanced focus on personal space alongside shared space. Additionally, other factors such as favourable demographic trends, a well-trained and cost-efficient talent pool, a robust technology ecosystem, and the accessibility of top-notch office spaces are aspects that leaders are keeping in mind for expanding collaborative workspaces in India.

The recently concluded COP28 focused on corporate climate action. CBRE is known to have designed innovative initiatives towards achieving net zero emissions by 2040. Tell us about the steps taken towards building a brighter future for the planet and the business? How are you weaving sustainability in corporate culture?

In the current business landscape, financial and economic feasibility are no longer the only factors determining a company's success. Addressing climate, societal, and ethical challenges is equally imperative – with an accelerated need ushered in by the pandemic, climate change, and India's commitment to COP28. An essential component for any country attempting to accomplish sustainability goals, is analysing, and incorporating environmental, social, and governance (ESG) strategies into its real estate objectives.

At CBRE, ESG is an integral business strategy - from how we operate as a business to serving our clients and helping them meet their ESG goals. As part of our comprehensive 2040 net-zero emissions strategy, we have taken a significant step by joining ‘The Climate Pledge’. This commitment involves striving to achieve net-zero carbon emissions a decade earlier than the target set by the Paris Agreement. Additionally, we are dedicated to reaching 100% renewable electricity consumption milestone by 2025. As part of our broader sustainability efforts, we are also actively transitioning our vehicle fleet to electric vehicles, aligning our operations with a cleaner and more sustainable future. We have planned to curb emissions as well in the facilities we manage for occupiers worldwide by 79% per sq.ft. by 2035.

With the tech advancements and AI, how will the role of the CEO evolve in 2024? How integral will board oversight of AI become as more organisations look towards integrating Gen AI in their day-to-day functions? 

As AI continues to transform the business landscape and operations, the role of the CEO will be critical in navigating through the nuances and capitalising on its advantages to spearhead growth. The influence of AI will extend across various dimensions of leadership, altering the dynamics of decision-making and reshaping the way CEOs engage with stakeholders. AI adoption will catalyse the competition in 2024, and those who are early to adopt and start driving outcomes are likely to have the strategic advantage.

AI will also become progressively integral as more organisations integrate Gen AI into their day-to-day functions. CEOs will be required to determine the optimal use of AI, how to scale it up, and its implications for their industry. Integrating AI into day-to-day functions will also necessitate board oversight to ensure that AI is used responsibly and ethically in alignment with the company's strategic objectives. This will involve educating the board of directors about AI, understanding, and optimising the interactions between people and technology, and creating a strategy to synergise for optimum efficiency.

As organisations stand at the intersection of innovation and agility, what are some of the trends you see on the horizon that will dominate 2024. What advice do you have for CEOs to pivot and adapt amid uncertainty, disruptions, volatility, and geopolitical shifts?

Technology is constantly re-wired to outcompete. Reimagining the technology function and customising its use to address indicated business challenges will be a vital asset. The agility to adopt and accelerate the integration of nuanced technology will be an enhanced focus this year to increase efficiency and efficacy across the business.

Leadership across industries has a vital role in enabling sustainable operations and ensuring progress towards net-zero targets. Shifting business models to prioritise increased risk monitoring, optimised data utilisation, careful consideration of costs and supply chains, and a heightened awareness of environmental impact are pivotal steps towards securing a competitive advantage for the future.

In the end, it is clear that for organisations and nations to thrive towards a net-zero economy, it will be essential to push ahead on value creation with a vision and ambition.