Tech investments are the future of hybrid work: Knight Frank's Lee Elliott

He highlighted that private wealth investors are diversifying portfolios and prioritising stable, income-generating assets

Companies are adapting to economic challenges by offshoring to cost-efficient markets like India, optimising real estate, and investing in technology for efficiency. LEE ELLIOTT, partner and global head of occupier research at Knight Frank, in an interview with Aneeka Chatterjee, also highlighted that private wealth investors are diversifying portfolios and prioritising stable, income-generating assets. Urbanisation drives growth in retail and warehousing, while India-based realtors must focus on innovation and sustainability to remain competitive. Edited excerpts:

 

How are companies adapting to current economic challenges? 

Companies are addressing current economic challenges by leveraging offshoring and cost-saving measures to enhance operational efficiency and reduce expenses. Offshoring to cost-efficient markets like India enables access to skilled talent at lower wages, supported by favourable government policies and infrastructure. Simultaneously, organisations are optimising real estate portfolios through hybrid work models, flexible leases, and co-working spaces, significantly reducing overheads.

 

Investments in technology, including automation and digital tools, are further driving efficiency by streamlining processes and minimising manual intervention. Energy efficiency and sustainability initiatives, such as renewable energy adoption and smart monitoring systems, are gaining traction as companies align with environmental, social, and governance (ESG) goals.  However, challenges such as geopolitical uncertainties, cybersecurity risks, and the impact of workforce restructuring on employee morale require careful management. By strategically implementing these measures, businesses are not only navigating current economic uncertainties but also building resilience for sustained growth and competitiveness.

 

What are some of the pressing challenges in corporate real estate?

  Corporate real estate is navigating a dynamic landscape with increasing demand for commercial real estate, particularly in a developing country like India. Although the hybrid workplace strategy is evolving, companies continue to rely on and show confidence in traditional office spaces. However, transitioning to flexible spaces presents challenges in optimising real estate portfolios while maintaining employee productivity and collaboration.

 

Companies must also address the technological investments required to support hybrid environments, such as advanced digital infrastructure and space management tools. Simultaneously, sustainability is a growing priority in corporate real estate. The adoption of green building practices and energy-efficient technologies is becoming a trend, yet these advancements often involve major upfront costs. Geopolitical uncertainties, supply chain disruptions, and fluctuating real estate valuations further complicate decision-making in this sector.

 

How are private wealth investors adapting their real estate strategies in response to market volatility?

  Private wealth investors are adapting their real estate strategies to navigate market volatility by diversifying portfolios and prioritizing stable, income-generating assets. In uncertain economic climates, these investors are increasingly drawn to commercial real estate, such as office spaces, retail centres, and logistics facilities, which offer long-term leases and steady cash flow.

 

Further, sectors like data centres and industrial parks, which have shown resilience in volatile markets, are gaining prominence. In response to growing uncertainty, there is a shift toward alternative investment models, such as fractional ownership and real estate investment trusts, which provide liquidity and reduce exposure to concentrated risks.

 

Technology is playing a pivotal role in decision-making, with investors leveraging data analytics and proptech platforms for market insights and performance tracking.

 

With the re-election of Donald Trump, what would be the main challenges for India-based realty players?

  The re-election of Donald Trump could bring a mix of challenges and opportunities for India-based real estate players. Stricter immigration policies would primarily impact the US rather than India. While such policies might reduce the ability of Indian professionals to work in the US under H1B visas, this could create a reverse talent flow, benefiting Indian information technology (IT) hubs.

 

This reverse migration could boost demand for commercial real estate in key cities like Bengaluru, Hyderabad, and Pune, as multinational corporations establish or expand offshore operations to retain talent within India. Geopolitical uncertainties and potential trade tensions might increase costs for imported construction materials. However, this also presents an opportunity to boost domestic manufacturing in line with India’s Make in India initiative, reducing reliance on imports over time.

 

Also, the shift towards hybrid work models globally provides an opportunity for Indian real estate players to innovate in designing flexible, technology-enabled workspaces. By focusing on sustainability, and cost-efficiency, and tapping into domestic demand, Indian real estate players can turn global challenges into a platform for growth and resilience.

 

What would be your advice to Indian realtors from a global point of view?

  From a global perspective, Indian realtors should prioritise adaptability, innovation, and sustainability to remain competitive in an evolving real estate landscape. As globalisation drives interconnected markets, Indian realtors must align with international best practices and position themselves as attractive options for both domestic and foreign investors.

 

A key focus should be on adopting green building practices and meeting ESG standards. Technology integration is another critical area. By leveraging proptech solutions such as smart property management systems, virtual reality for property tours, and data analytics for market insights, they can improve operational efficiency and enhance customer experience.

 

Strengthening partnerships with international investors and developers and understanding global financial trends will enable Indian realtors to navigate market volatility and tap into a broader pool of opportunities.

 

Which countries are performing best in terms of occupancy rates globally?

  The Asia-Pacific region has the strongest office occupancy rates globally, led by Singapore and India. In Singapore, government-backed initiatives and a cultural emphasis on in-person collaboration drive success. India, meanwhile, is powered by private-sector momentum and cultural preferences for office-based work, particularly in sectors like IT and financial services.

 

Urban technology hubs lead the charge, with companies actively encouraging returns to maximise productivity.

 

In the West, progress varies. London has seen marked improvement, reflecting a shift as businesses increasingly value in-person collaboration. However, major differences remain across sectors, companies, and cultures. Financial and professional services often maintain higher occupancy, while technology and creative industries lean heavily on hybrid models.

 

The US shows a similar pattern, with cities like New York rebounding, while San Francisco lags. Across Europe, recovery remains moderate, with firms adapting to flexible work expectations.

 

The takeaway is that occupancy success hinges on alignment with cultural norms and industry demands. Companies that tailor strategies to their unique workforces are outpacing those relying on one-size-fits-all solutions.