Major companies in India, including Wipro and Cognizant, are rapidly divesting large IT campuses as part of a strategic shift towards asset-light business models. This trend is driven by the need for operational efficiency and adaptation to changing workforce dynamics.
- Companies like Cognizant and Wipro are selling expansive office properties.
- The trend reflects a broader shift towards operational efficiency and cost management.
The Shift Towards Asset-Light Business Models
In recent years, Indian firms have been increasingly opting for asset-light models, selling extensive IT campuses to optimize operational efficiency. Notable players in this shift include Cognizant, Wipro, and DXC Technology. For instance, Cognizant is in talks to sell its Chennai campus for ₹1,000 crore, a decision aligned with its strategy to vacate 11 million square feet of office space globally, potentially saving $400 million over two years. This shift not only reflects changing business dynamics but also signals a response to the rise of remote work, allowing companies to minimize real estate expenditures.
As Bijay Agarwal, Managing Director of Sattva Group, noted, “The potential for transformation is immense,” indicating opportunities for redevelopment into co-working hubs and mixed-use developments. The trend highlights a transition where companies are focusing more on core business functions while shedding non-core assets. According to a recent Colliers report, the office market in India is projected to solidify further in 2025, driven by increasing demand for flexible and managed office spaces.
Impact of Remote Work on Real Estate Strategies
The rise of remote and hybrid work models has been a significant catalyst for companies reevaluating their real estate portfolios. Anshuman Magazine, Chairman and CEO of CBRE, emphasized that “flexibility in workspaces is crucial,” as organizations seek to adapt quickly to changing operational needs. By divesting large campuses, companies can reduce their real estate capital expenditure while enhancing space utilization.
This shift is leading to an oversupply of available office space, which is likely to increase competition among developers and investors. Furthermore, the trend of asset-light strategies reflects a broader paradigm shift in corporate real estate. Sankey Prasad, Chairman and Managing Director of Colliers India, stated, “This shift allows them to focus on core business functions while reducing capital expenditure on real estate.” Companies are expected to expand their office footprints across multiple locations, emphasizing smaller, more flexible spaces moving forward.
Future Outlook and Industry Implications
The ongoing trend of companies divesting large IT campuses signifies a fundamental transformation in India’s commercial real estate landscape. With firms like Wipro recently selling a 14-acre land parcel in Chennai for ₹266.38 crore, the implications for the future are clear. The market is evolving to accommodate flexible leasing terms and the demand for managed office spaces, which will likely continue to drive the adoption of the core+flex model in commercial real estate.
Experts predict that as more organizations embrace asset-light strategies, the office market will witness robust growth. The increased leasing activity in major cities, reaching 66.4 million sq ft in 2024, indicates a sustained demand for adaptable workspaces. “The need for managed office spaces amidst evolving business requirements will continue to fuel this trend,” said a Colliers report. This evolving landscape presents opportunities for innovation, paving the way for a more dynamic and flexible future in India’s office market.
