Updated: Jul 17
In Q1, net office space absorption in India's top seven property markets increased 2.85 times, showing a recovery in the industry.
New Delhi: Commercial space occupancy has increased as a result of a steady drop in COVID cases and organizations hastening employees' return to work. For instance, the top seven real estate markets in India saw a 2.85-fold increase in net office space absorption, with industries including manufacturing, BFSI, and information technology (ITes) dominating market activity. Additionally, to increase employee productivity, an increasing number of organizations have moved their attention to employee health and general wellness. Some businesses have even given the hybrid working model newfound importance.
Do these tendencies portend the demise of remote work or a more general shift towards hybrid employment? "Hybrid employment is currently becoming more popular. Before the pandemic, emphasis on in-office teamwork and having extremely dedicated seating were higher. More flexibility and acceptance of remote and hybrid working are now being seen. One of the main trends that corporate occupiers are noticing post-COVID is a demand for increased flexibility. Even with a hybrid work model, employees still have to work from the office for about three to four days per week, says Abhinav Joshi, Head Of Research, India, Middle East & North Africa, CBRE, during a panel discussion on ET NOW. As a result, this doesn't pose a significant threat to the office space market.
"A return to offices is a significant trend in many cities and industries, particularly in the wake of the Omicron wave. In our surveys, more than 50% of participants said they had started working from their offices again within the first six months of the year. Eighty to five percent of the responders anticipate returning before the end of the year. This also affects office leasing. In the second quarter of this year, we expect quarterly office leasing to reach an all-time high, Joshi continues.
What impact has COVID-19 had on the commercial real estate market? Employee wellbeing is being given more attention, both from the standpoint of the COVID protocol and from the standpoint of an enhanced working environment in general. For example, installing air quality sensors has gained significant importance. Another top concern is making a place for gyms, fitness centers, etc. Aniket Dani, Director, CRISIL Research, notes that more than 80% of the office occupiers we spoke with stated that health and well-being will be the greatest emphasis areas moving forward to provide a holistic experience to their employees.
"I believe the cost-effectiveness of the hybrid work culture will ensure its longevity. Corporates in industries besides IT/ITes or BFSI are also observing significant signs of recovery, according to the sector outlook. All things considered, Dani predicts an increase in demand for commercial real estate.