The next generation principal of the office park developer GAR Corporation expects India will recover economically in 2021, but is unconvinced remote working will become a permanent fixture.
Abhinav Ram Reddy, executive director of the Hyderabad-based family business, told CampdenFB the advent of Covid-19 vaccines would encourage consumer spending and demand in India and help the economy recuperate. He questioned if companies would continue to work from home once pandemic restrictions eased and the opportunity if working collaboratively in shared offices became available once again.
Reddy (pictured), 30, an Alumnus of Harvard Business School, joined GAR Corporation in 2011. His father, law graduate turn entrepreneurial real estate developer Gavva Amarender Reddy, 60, launched his family business in 1982. Clients include Amazon, Pepsico, HSBC, HCL, EY, Randstad, LTI, Capgemini, Cognizant, Anthem and ADP.
Abhinav Ram Reddy oversees a portfolio of 10 million sq feet (93ha) of office space which spans a special economic zone as well as traditional office parks and is wholly owned by the family business.
The next-gen manages and develops various private companies which are in the business of commercial real estate asset creation. He is diversifying the activities of his family’s companies into new areas by implementing modern techniques and cutting-edge technology.
Reddy has also been instrumental in forging long-term partnerships with several multinational companies linked to the infrastructure facilities for information technology and information technology enabled services. His interest in venture capitalism and angel investment has led to several investments in startups in India and abroad.
What makes you confident of a V-shaped economic recovery in India in 2021?
The fundamentals of our economy still remain strong. The pandemic and subsequent lockdown brought almost all sectors to a grinding halt. This was an artificial pressure put on the entire system however, it was not a systemic problem within it, like the 2008 financial crisis in the United States. The financial year 2021 gives us enough time to start the rollout of the vaccines, which will in turn boost confidence amongst consumers and spur demand. This trend of recovery is already seen in our APAC counterparts like China, South Korea, Singapore, etc, so one can expect India to follow suit soon.
What is your long-term investment philosophy?
Family wealth always prioritises stability and preservation over returns. In this context, our long term investments are made keeping capital preservation and currency hedging in mind.
Will the pandemic-accelerated trend of working from home impact office park building, leasing and managing?
It’s too soon to make predictions since the long term impact is yet to unfold. As of now, it looks like most companies have made working from home possible, but this is because there was no choice. One had to adapt in order to survive. Whether this will become a permanent trend is yet to be seen.
Although most companies have reported high working from home efficiency during the early days of the lockdown, this trend seems to be slowing down due to fatigue, burnout and isolation amongst employees.
One outcome seems to be clear—that at least 5-10% of the Indian IT workforce will now permanently shift to remote working. This may have an impact on the overall commercial real estate market however, it also depends on how the other 90-95% changes.
Let’s not forget that there have been many doomsday predictions in the past that foretold the ‘Death of the Office’—firstly, during the emergence of the internet era when experts predicted that physical presence will no longer be required to conduct business, and secondly, after the 9/11 terrorist attacks when the world watched in horror and assumed that no one would want to work in a high rise office tower again.
The current pandemic may be encouraging everyone to make predictions with the same euphoria, but I think once the vaccines are rolled out and a significant portion of the population is inoculated, our collective thinking will become more reasonable rather than taking extreme steps.
We have not reached the stage yet where there have been multiple generational successions within a large family, as we are still in the second generation and have a fairly small circle of control with my father and myself overseeing the business and heading all major decisions.
As a general rule of thumb though, it’s always good to have clarity and consensus when it comes to succession. When I say clarity, I mean that the path forward for the business—or wealth, as may be the case—must be clearly defined based on the long term goals of the family. Consensus within the framework of succession refers to the next generation being on board and convinced with the plans that are made by the elders of the family. Gone are the days when the patriarch or matriarch makes all the decisions and the next generation follows blindly.
I have found that the key to this is giving professionals the freedom to operate. In order to attract the best talent, we must provide a long-term vision and growth path to both the business as well as individuals’ respective career paths. Remember, the world is run by family businesses. Many may have transitioned to professional management, but at their core they are still owned by the founding families.
What can next generation family members do to encourage the professionalisation of Indian family businesses?
Next-gens in Indian family businesses are faced with an uphill task to prove themselves from the very beginning of their careers. It may sound counter-intuitive, so let me explain.
Next-gens are always faced with the perception from others that they have been handed everything on a silver platter. It takes a long time to dispel this notion, if ever at all.
On top of this, there are the huge shoes to fill of the previous generation. Everything a next-gen does invariably ends up as a comparison to his/her father/mother or grandfather. This is especially true in Indian culture.
Back to the question—I have found that to create a professional environment, a little goes a long way. Simple things like professional courtesy to other colleagues and that bit of extra humility will help dispel a lot of preconceived notions that people have of next-gens.
Which CSR project supported by GAR Corp are you most proud of and where should family philanthropists focus their support in the new year?
We have been passionate about causes that involve underprivileged children.
Although my family has been supporting children’s education for a long time now, we have recently embarked on a mission to create a world-class child care institute. This facility will cater to the needs of over a hundred orphans and ensure that they live a life that is as comfortable and respectable as anyone else in the country.