April&2014&

Emerging(Trends(in(Office(Real(Estate(Contact:(info@yourofficespace.in(www.yourofficespace.in&

Summary(

Confiden1al& 2"

■  Business"Centres"are"fast"emerging"as"a"preferred"solu4on"for"office"space"needs"

–  Ideal"solu4on"for"MNCs"se:ng"up"offices"in"India,"Mobile"Execu4ves,"SMEs"and"Startups"

■  Macroeconomic(uncertainty(and(evolving(cultural(dynamics(spur(the(growth(of(Business(Centres(

–  Asset"light"model,"with"agility"and"flexibility"to"scale"up"and"down"

–  Economies"from"non"core"shared"services""

■  AbsorpAon(in(office(real(estate(has(been(low(and(rental(yields(further(expected(to(decline(

–  Business"Centres"provide"a"unique"opportunity""

–  Improved"yields,"revenue"from"services"and"reduced"marke4ng"cost"due"to"higher"fooHall"

–  Part"of"wide"network"

■  But"cri4cal"to"understand"finer"nuances"of"hospitality"and"marke4ng"

■  YourOfficeSpace(is(fast(emerging(as(leader(in(the(industry((

–  Customer"centric"approach""

–  Economies"from"smart"technology"

The(SoluAon:(Business(Centre(

Confiden1al& 3"

■  Business"Centres"provide"comprehensive"flexible"and"mobile"workspace"solu4ons"

–  Fully"Serviced"Private"Offices"

–  Virtual"Office"Solu4ons"

–  Mee4ng"Rooms,"Conferencing"and"Training"Facili4es"

–  Other"Business"Support"Services"

■  Provide" custom" made" workspace" solu4ons," allowing" our"clients"to"outsource"their"en4re"workspace"needs"and"focus"on"their"core"business"ac4vi4es"

■  Servicing"a"diverse"set"of"clients,"including""

–  Mul4na4onal"corpora4ons"

–  Small"and"Medium"Enterprises"

–  Professional"Consultants"and"Entrepreneurs"

A(strong(value(proposiAon…(

Confiden1al& 4"

1.( ■  Follow"the"business,"and"set"up"mul4ple"offices"with"no"lead"4me"

■  Opera4onal"leverage"allows"agility"and"flexibility"to"scale"up"scale"down"

■  Asset"light"model"with"mul4ple"offices"

2.((■  Op4mize"office"spend"by"maintaining"a"lean"team""■  Shared"services"lead"to"substan4al"cost"savings"■  Further" allows" access" to" number" of" shared" services" which"

may"other"wise"be"economically"unviable"

3.((■  Be"more"produc4ve"by" focusing" resources" and" energy"only"

on"core"ac4vi4es"■  Ease"of"hiring"freelancers,"mobile"execu4ves"who"could"work"

from"remote"offices"

STRATEGIC(

COMMERCIAL(

TACTICAL(

…for(a(diverse(set(of(clients(

Confiden1al& 5"

MulAnaAonals( ✔■  Asset"light"model,"excellent"way"of"managing"investment"risk"while"se:ng"up"opera4ons"■  No"need"for"support"services"staff;"focus"only"on"core"ac4vi4es"of"the"business"■  Shared"&"centrallyWmanaged"IT"infrastructure,"secretarial"services"and"conference"facili4es"result"in"

significant"cost"savings"

SMEs( ✔■  Flexibility"to"scale"up"and"scale"down"teams"at"minimal"cost"and"4me"■  Substan4al" economies" from" shared" nonWcore" resources" such" as" administra4on," technology" and"

communica4ons"infrastructure""■  Ease"of"hiring"professional"employees"due"to"produc4ve"work"infrastructure"and"environment"

Mobile(ExecuAves( ✔■  Custom"workspace"solu4ons"allowing"op4miza4on"of"office"costs"■  An" access" to" a" global" network;" ease" of" travel" without" ever" losing" a" single" mail" or" missing" an"

important"call"■  Access"to"advanced"technology"infrastructure"allowing"remote"surveillance"of"team"etc."

Startups( ✔■  No"office"setWup"costs;"zero"down4me"and"offices"ready"for"‘plug"and"play’"■  Flexible"workspace"solu4ons,"allowing"minimal"costs"and"high"produc4vity""■  Poten4al"synergies"from"networking"with"other"entrepreneurs"""■  Leverage"shared"Support"Services,"such"as"accoun4ng,"legal,"banking,"technology"

Overview(–(Office(Real(Estate(Industry(Demand"Side"Perspec4ve"

Confiden1al& 6"

Evolving(dynamics(pave(the(way(for(Business(Centres’(growth…(

Confiden1al& 7"

■  Increasing"number"of"foreign"subsidiaries"in"India""■  Need" for" cost" op4miza4on" due" to" wider" macro" economic"

pressures""-  Increasing"focus"on"shared"services"for"all"non"core"business"

func4ons,"including"physical"space"

■  Need" for" flexibility" to" scale" up" and" and" scale"down," due" to" looming" uncertainty" in" business"environment"-  Both"human"and"physical"resources"

■  Be_er" commercials" in" a" Business" Centre" due" to" shared"resources"and"economies"of"scale"

■  Increasing"need"of" sophis4cated" technical" infrastructure," such"as" ILL," VoIP" Phones," Video" Conferencing" etc.," which" entail"substan4al"CAPEX""

■  Increasing"business"with"overseas"partners"-  Need" for" superior" compliance" standards" of"

safety"and"hygiene"

■  Entrepreneurial" wave" sweeping" through" the"country," has" created" an" en4rely" new" customer"segment"

■  Need"for"shared"offices"and"support"services"

■  No"real"Indian"brand"in"the"space"■  Incumbents"and"exis4ng"compe44on"includes:"

-  Real( Estate( Companies" with" li_le," if" any"exper4se"in"hospitality"

-  InternaAonal(players"which"make"such"services"economically"inefficient"and"a"privilege"for"few""

-  Luxury(Hotels(Business"Suites,"which"are"limited"in" scale" and" Business" Centers" con4nue" to" be" a"peripheral"service"for"them"

■  Increasing" awareness" in" tradi4onal" SMEs" about" benefits" of"professional"working"spaces"-  Ease"of"hiring"qualified"personnel"-  Be_er"produc4vity"with"focus"only"core"ac4vi4es"-  Improved"business"prospects"

…as(voiced(by(industry(experts(

Confiden1al& 8"

“...companies&should&seriously&consider&expanding&the&use&of&these&[flexible&work]&prac1ces&as&numerous&benefits&exist&for&the&company,&the&employee&and&the&larger&community.”&

School"of"Management"Sciences,"Pretoria,"South"Africa:"Flexible"work"prac4ces"–"an"effec4ve"instrument"in"the"reten4on"of"talent"

“Flexible&working&both&meets&the&needs&of&employees&and&improves&companies’&capacity&to&serve&customers...and,&in&doing&so,&it&secures&compe11ve&advantage.”&

BT:"Flexible"working"–"can"your"company"compete"without"it?"

“They&are&an&excellent&way&of&managing&investment&risk&while&offering&costLeffec1ve&and&flexible&solu1ons&to&startLups,&companies&looking&to&expand&cau1ously,&companies&that&require&offLsite&office&spaces&and&also&businesses&with&no&longLterm&plans.&In&the&serviced&office&space&model,&the&company&basically&pays&only&for&what&it&really&needs.”&

Santhosh"Kumar,"CEO"–"Opera4ons,"Jones"Lang"LaSalle"India,"

"

“…serviced&offices&–&rela1vely&a&new&concept&in&India&–&are&reLemerging&rapidly&aRer&a&shaky&debut&a&few&years&ago.&Most&suited&for&startLups,&foreign&companies&venturing&to&India,&professional&consultants,&companies&seTng&up&satellite&offices&or&temporary&offices,&the&concept&is&catching&up&fast&in&1erLI&and&1erLII&ci1es.”&

Finance"Chronicle"–"31"January"2013"

"

0%" 10%" 20%" 30%" 40%" 50%" 60%" 70%" 80%" 90%"

Netherlands"

Belgium"

France"

Germany"

UK"

Japan"

China"

Global"Av."

Australia"

USA"

Canada"

Mexico"

India"

Brazil"

S."Africa"

Consumer(preferences(indicate(increasing(use(of(Business(Centres…(

Confiden1al& 9"

■  Increasingly"more"and"more"people"are"working"on"the"move(

–  Small"businesses" in"par4cular"cannot"rely"on"a"network"of"

company"offices"

–  More" than" half" of" workers" confirmed" that" they" ac4vely"

seek"out"business"centres"when"they"are"on"the"move"

■  Dearth"of"skilled"workforce"con4nues"to"be"a"challenge(

–  Employers’" choices" are" further" restricted" to" loca4ons"

where"they"have"their"own"offices"

–  Nearly" 70%" of" respondents" in" India" confirmed" that" they"

intend"to"hire"more"freelancers"in"future"

■  Given" the" macroWeconomic" pressures," business" opt" for" more"

asset" light" and" nimble" accommoda4on" arrangements" that" are"

easily"scaled"according"to"workforce"numbers(

–  The" survey" reveals" that" over" 80%" of" respondents" believe"

that" there"will" be" a" surge" in" people" that" plan" to" go" partW

4me"in"their"career"Source:&Survey&of&over&16,000&execu1ves&globally,&managed&and&administered&by&Mindmetre&–&www.mindmetre.co.uk.&

Key(results(of(a(survey(of(16,000(business(respondents(globally,(reflect(an(increasing(need(for(a(network(of(business(centres,(providing(custom(

workspace(soluBons(

I(work(more(on(the(move(than(I(used(to(

0%" 10%" 20%" 30%" 40%" 50%" 60%" 70%" 80%"

Australia"

Japan"

UK"

Belgium"

USA"

Netherlands"

China"

France"

Global"Av."

Brazil"

S."Africa"

Canada"

Germany"

India"

Mexico"

0%" 20%" 40%" 60%" 80%" 100%"

France"

Japan"

Brazil"

Germany"

Mexico"

Belgium"

Global"Av."

China"

India"

Netherlands"

USA"

Canada"

UK"

S."Africa"

Australia"

Confiden1al& 10"

Source:&Survey&of&over&16,000&execu1ves&globally,&managed&and&administered&by&Mindmetre&–&www.mindmetre.co.uk.&

Source:&Survey&of&over&16,000&execu1ves&globally,&managed&and&administered&by&Mindmetre&–&www.mindmetre.co.uk.&

I"believe"there"will"be"a"large"increase"in"people"who"go"partW4me"later"in"their"careers"We(intend(to(hire(more(freelance(staff(in(the(next(year(

…with(a(number(of(use(cases(

Overview(–(Office(Real(Estate(Industry(Supply"Side"Perspec4ve"

Confiden1al& 11"

Sluggish(AbsorpAon(Rate(of(Office(Real(Estate(…(

Confiden1al& 12"

■  The"office"real"estate"absorp4on"rate"has"been"sluggish"for"over"

8"quarters"

■  Rents" largely" stagnant"across"most"markets"as" supply"pressures"

led"landlords"to"maintain"low"expecta4ons"

■  Although"commercial"leasing"ac4vity"is"likely"to"witness"a"gradual"

uplim"beginning"2014"

–  However,"market"focus"on"small/mediumWsized"transac4ons"

–  Significant"quantum"of" supply" lined"up"2014"keeping" rental"

recovery"range"bound"

(Million&sq.&feet)&

W15.0%"

W10.0%"

W5.0%"

0.0%"

5.0%"

10.0%" YWoWY"Change"

W15.0%"

W10.0%"

W5.0%"

0.0%"

5.0%"

10.0%" YWoWY"Change"

0"

2"

4"

6"

8"

10"

Q1'12" Q2'12" Q3'12" Q4'12" Q1'13" Q2'13" Q3'13" Q4'13"

Source:&CBRE& Source:&CBRE&

Source:&CBRE&

Pan(India(Trends(in(Office(AbsorpAon(

Rental(Performance(of(Central(Business(Districts( Rental(Performance(for(Peripherals((

…with(Indian(Office(Rental(Cycle(showing(signs(of(slowing(growth(

Confiden1al& 13"

Notes:&1&–&Rents&are&at&their&peak&and&are&expected&to&decline&over&the&next&6L12&months&4&–&The&rate&of&rental&decline&has&slowed.&Rents&are&not&yet&at&their&trough,&and&are&expected&to&decline&further,&but&at&a&slower&rate.&7&–&The&rate&of&rental&growth&is&at&its&peak.&Rents&are&expected&to&con1nue&rising&but&at&a&slower&rate.&9&–&Rents&are&at&their&peak&and&are&considered&to&have&reached&a&plateau.&Marginal&further&growth&s1ll&possible,&but&a&significant&decline&not&yet&expected.&

Source:&CBRE&–&India&Office&MarketView&(Q42013)&

1( 2( 3( 4( 5( 6( 7( 8( 9(

Rent(Decline(AcceleraAng( Rent(Decline(Slowing( Rent(Growth(AcceleraAng( Rent(Growth(Slowing(

K( Kolkata"

M( Mumbai"

C(Chennai"

P(Pune"

H(Hyderabad"

N(New"Delhi"

B(Bangalore"

YourOfficeSpace(–(Overview(

Confiden1al& 14"

YourOfficeSpace(has(established(a(differenAated(compeAAve(advantage(

Confiden1al& 15"

Global"Network(

Quality"of"Services(

Technology(

Flexibility"/"Custom"Offers(

Support"Services(

Hidden"Costs(

Pricing(

Special"Offers"for"Startups(

InternaAonal(Players( DomesAc(Players( Luxury(Hotels((Business(Suites)(

(1)"

(2)"

(3)"

(4)"

(1)  YourOfficeSpace,&through&its&strategic&&partners,&has&access&to&more&600&execu1ve&business&centres&around&the&world&(2)  Technology&includes&technical&infrastructure&that&allows&business&to&func1on&efficiently,&op1mally&and&securely,&including&IP&phones,&bandwidth&managers,&VPN,&UTM,&amongst&others&(3)  Most&interna1onal&players&have&off&the&shelf&services&that&allow&ligle,&if&any&room&for&customiza1on;&on&the&other&hand&local&players&suffer&from&serious&lack&of&standardiza1on&in&services&across&centres&(4)  Interna1onal&players&are&priced&compe11vely,&however&due&to&substan1al&hidden&charges,&fully&loaded&costs&to&the&clients&are&considerably&high&

Favorable) Unfavorable)

Favorable" Unfavorable"

With(a(broad(suite(of(products(and(services(

Confiden1al& 16"

■  Execu4ve"Suites"and"Managerial"Offices"

■  Shared"or"OpenWPlan"Workspace"

■  24/7"Secure"Access"■  Support"Services"including"Business"Concierge,"Travel"

Desk,"amongst"others"

■  Equipped"Mee4ng,"

Training"and"Conference"

Rooms""

■  Board"Mee4ng"and"

Training"Room"facili4es"

■  Advanced"Communica4ons"

Infrastructure"including"

AudioWConferencing"Bridge"

and"Video"Conferencing""

■  Custom"Virtual"Offices"

Solu4ons,"such"as"

Execu4ve"Address,"

Virtual"Assistant,"Mail"

Handling,"Personalized"

Pone"Answering"etc."

■  Workspace"solu4on"

custom"made"for"Startups"

and"Entrepreneurs"

■  Shared"Offices,"Flexible"

Offices"and"Virtual"Office"

Solu4ons"

■  Support"services"such"as"Recruitment,"Accoun4ng,"

Technology"etc."

■  Investment"support"

Serviced(Offices( LaunchPad(MeeAng(Rooms( The(JetSe`er(

An(inside(view(of(YourOfficeSpace(

Confiden1al& 17"

Contact(

Confiden1al& 18"

&

YourOfficeSpace"T:"+91"120"673"0000"F:"+91"120"673"0007"E:"vikas.lakhani@yourofficespace.in"W:"www.yourofficespace.in"