Decoded: The Hottest Trends in Commercial Real Estate
Before the pandemic, there was more focus on office collaboration and having very dedicated seats.
Post-COVID, the demand for increased flexibility is one of the biggest trends seen by corporate occupiers.
By the end of the year, 80-85% of respondents also expect to return.
New Delhi: With a gradual decline in COVID cases and organizations accelerating the return to work of employees, the absorption of commercial spaces is on the rise. India’s seven major real estate markets, for example, saw their net absorption of office space increase by 2.85 times, with sectors such as information technology, information technology, manufacturing , industry, BFSI, etc. leading in terms of market activity. Additionally, a growing number of organizations are now focusing on overall employee health and wellness in an effort to increase employee productivity, with some companies even putting a renewed emphasis on the hybrid working model.
Do these trends signal the end of working from home or a broader shift towards hybrid working? “Hybrid working is now finding greater acceptability. Before the pandemic, there was more focus on office collaboration and having very dedicated seats. We are now seeing more flexibility, as well as the acceptability of hybrid and remote working. Post-COVID, the demand for increased flexibility is one of the biggest trends seen by corporate occupiers. Yet, this does not pose a big threat to the office space market, as even in a hybrid working model, employees have to work from the office for around three to four days a week,” observes Abhinav Joshi, Head of research, India, Middle East and North Africa, CBRE during a panel discussion on ET NOW.
“The return to offices is another big trend in cities and sectors, especially after the Omicron wave. More than 50% of respondents in our surveys said they returned to work from their desk in the first six months of the year. By the end of the year, 80-85% of respondents also expect to return. This also has an impact on office rental. We expect an historic peak in quarterly office rentals for the second quarter of this year,” adds Joshi.
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How has the COVID-19 pandemic changed the commercial real estate market? “There is a greater focus on employee well-being, not only from a COVID protocol perspective, but also from an overall improved work environment perspective. The implementation of air quality sensors, for example, has become a high priority. Space allowances for gymnasiums, fitness rooms, etc. are another top priority. Over 80% of office occupants we surveyed said that health and wellbeing are now top areas of focus as they want to provide a holistic experience for their employees when they return,” Aniket Dani points out. , Director, CRISIL Research.
“I think the hybrid work culture is here to stay because it pays off. In terms of sector outlook, companies in sectors other than IT/ITes or BFSI are also seeing strong signs of recovery. Overall, the overall demand for commercial real estate is going to be on the rise,” concludes Dani.