MNC's purchased 43% of office space in past 2 Years.

MNC's purchased 43% of office space in past 2 Years.

  11:00    Unknown

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(By Rajinder singh - editor Derik Times)

A shift from leasing the office space to purchase of office space since 2012 the office purchasing transaction was INR 2470 crores.

 A strategic move to comply the cost effective measures made by MNC's. The other implication is the rise in the price of commercial building, so its better to be proactive and occupy reasonably. Occupy reasonably in this context means the corporate bodies don't want to purchase too expensive commercial buildings that could be a reason of their company’s downfall, companies follow unique payment strategies to be able to handle the internal operations and processes also. On the other hand proactive in this context is:

· Rise in price of commercial buildings

· A long-term presence in the market

The second reason of proactive context is the most critical among various experts. One view may arise for this moves of MNC's are- looking for cost leadership strategy, which is of course for long span of time. The point is not only this, it is that the majority of MNC's in India are US based companies and US although with its struggling economy still have strength to hold on to their companies. With US policy on federal tax exemption over corporate profit earned out MNC's have even more cash in hand. Another factor is, if Indian Industry doesn't find proper proactive measures of their own on domestic player the market would be ruled by MNC's and also leads to slow down of actual industrial growth, by actual it means growth of domestic companies.

Another view is that purchase of office space will add to stability of presence of the MNC's or its a sense of security. Which secures the FDI policy that company should acquire asset in the country. Permanent presence means rise in competition among the player. Also experts will link the scenario to growth of Real Estate due to nature of the business. Real Estate will gain a grip in infrastructure investment. The two views are valid, mostly approaches should be in line with the trade off.