Many large corporates looking to relocate their headquarters

Need to expand operations has prompted large corporates to shift their headquarters to a better place

A number of large corporates across the country have relocated or are in the process of relocating their headquarters to other areas, according to real estate consultancy firm, Jones Lang La Salle.

There are many reasons for this. One of the primary objectives behind companies relocating their headquarters today is the need to expand. Despite the uncertain business climate in India, many large companies are witnessing rapid growth and find their current premises inadequate to accommodate their expansion plans and increased headcounts. The obvious solution is to move to locations, which provide larger commercial spaces.

Another reason for corporates to relocate their headquarters is consolidation - the hottest trend on the commercial real estate market these days. Many of the top tier companies operating from multiple locations in a particular city are seeking to consolidate all key functions and verticals into one office. By this, they aim - among other things- to ensure better coordination and flow of information. There are significant cost advantages in such a strategy, but the improvements in operational efficiency of business and coordination among teams is invaluable, said Santhosh Kumar, CEO - Operations, Jones Lang LaSalle India.

“In a constrained economic environment, almost all companies have a standing mandate to rationalise expenses - and real estate is a significant expense for any large company. Many corporates that find the real estate costs of their current locations unsustainable over the long run are now opting to move to new locations, which offer similar advantages and facilities at comparatively lower prices,” he said.

As an inherent business dynamic, companies will always seek to be more strategically located so that they can capitalise on a larger client base and be closer to the competition. This enables them to position and market their brands more effectively. It is, in any case, a given that all companies want their headquarter to be in high-profile locations that offer proximity to the airport and sufficient quality lodging facilities for frequent travellers and regular guests, he said.

Many companies operating their headquarters from leased premises have had to continue on those premises due to lock-ins. When the expiration of a lease is imminent, these companies are finally able to decide on moving to new and more developed locations with better infrastructure and accessibility. Moreover, many currently occupied headquarter premises were built almost a decade ago. This means that they lack quality of more modern structures, which meet global standards and safety norms, Kumar said.
 
In other words, the relocating corporates benefit from the availability of more spacious, better-designed office buildings that provide a better workplace experience to employees, in addition to sufficient parking and approach infrastructure, he added.