The commercial real estate has been a reliable mainstay of the domestic realty sector. It remained “vibrant” even when residential property was in the doldrums. Now, the coronavirus has thrown a serious spanner into the “works” of the lucrative real estate segment for at least next two quarters, says Ashutosh Limaye, director & head – consulting at Anarock Property Consultants.
“More and more companies are discovering the viability of employees working from home (WFH) alternative to occupying costly office spaces. Many IT/ITeS companies and other corporates are now warming up to the notion of shifting a significant chunk of work, be it coding or non-client-facing back-office functions, out of offices and into their employees’ homes,” adds Limaye.
The Covid-19 pandemic, he stressed, is a major game-changer, making WFH a respectable and even “altruistic” decision. “There are at least three major benefits: Firstly, companies can save a lot of revenue on office space occupancy. Secondly, WFH can be a major productivity-enhancer as employees save the time which they would ordinarily spend on daily commutes. Thirdly, and as a derivative of the second benefit, it can significantly boost employee wellbeing.”
WFH, he points out, is “obviously” not a catch-all solution as many business verticals and functions still require employees to work in an office setting. A large chunk of work needs constant monitoring and professional infrastructure which only an office setting can provide. Nevertheless, market dynamics are changing quickly now.
Underscoring the prospects of coworking in the light of penetration of WFH concept, he says it is likely to witness subdued demand over the next few quarters, but will also see the fastest revival as the pandemic pressures will eventually ease out and many businesses will look to restart in these flexible workspaces. The coworking spaces are not only the most cost-effective, but also offer flexibility in terms of the time period of rental agreements. These spaces can be rented on a monthly, day-to-day and even hourly basis.
On the conventional Offices, he adds: “The traditional office spaces are currently a source of worry for both tenants and landlords. This is because it is difficult to visualise and plan for a post-pandemic market scenario. However, when the government’s focus shifts back to economic growth, it will roll out business-boosting incentives that will revive the fortunes of commercial office spaces quickly. What is certain is that commercial space requirements are in for a major upheaval, as India Inc will not hit a ‘business as usual’ equation for quite a long time. Tenants will recalibrate their space requirements, and the effective average monthly per-desk rentals at Grade-A office spaces in some of the major business cities will be a central consideration.”