How COVID-19 Has Impacted India’s Real Estate Industry?by Procapitus Business Park Platform for workspace seekers
The previous year, 2020 exposed the world to several challenges and literally put us at a halt. Businesses got severely affected and the markets saw a new low. The pandemic did not spare the real estate industry as well.
The rigorous efforts to control the spread of COVID-19 have already led companies to readily adopt the work from home policy. Various other trends followed as more and more companies conformed themselves to fit the new environment. Today, ensuring safety, hygiene and health within the office premise has become crucial. Amidst the crisis, there are many businesses that are putting their best foot forward to develop and sustain business continuity.
1. OPTIMIZATION OF OFFICE SPACES
Social distancing is not going anywhere - at least not anytime soon. The world is witnessing a financial meltdown and the solution for this crisis only lies in scientific and social intervention. In the meantime, businesses have no other choice than to adjust themselves according to the new norm. While many companies including large corporations were quick to switch to smart work formats, the small workplaces took some time and eventually followed the same trend.
This has led to a decrease in office space requirements. For instance, the demand for ready to move office space in Noida, Bangalore, Chennai, Hyderabad and Guruguram has descended. That’s because offices need to have at least 30 to 50% of staff as per the social distancing guidelines. The businesses that were occupying 70-80 sq ft per person are now forced to increase the space to 100 sq ft per person in the long term.
This obviously means that business owners require paying more per person than what they were paying before. In short, they will be paying more for a space with a staff that is less in number compared to pre-COVID times.
2. LESS OFFICE SUPPLY AND DEMAND
The work from home culture will not completely replace the need for office spaces, but its impact is huge. The office leasing volumes took a huge hit in 2020. Let’s take the example of Noida and Gurgaon once again. Business owners these days prefer a modern office solution like a virtual office over a traditional workspace. A virtual office provides them with the exact benefits that office space on lease in Noida or Gurgaon does. Moreover, they can now get an office at a better location at a budget they can easily afford.
3. SLOW RENTAL GROWTH
Lock-down is over, but companies are still continuing work from home for their employees. This is helping them save costs on rent and lease, and also keep their employees safe. Business parks and buildings that used to rent 10-15 companies now have only 4 or 5 companies working on their premise. They’re facing heavy losses and are ready to offer the lowest of the low rental costs.
4. DEDICATION TOWARDS EMPLOYEE WELFARE
Companies are prioritizing the well-being of all their employees. Some have introduced a remote-working policy - providing their employees with a choice to work remotely up to 75% per cent of the time. While others have fully adopted the remote first policy wherein they are also delivering ergonomic chairs and compact tables to their employees for comfort. Additionally, there are companies that have added an extra day off to help employees deal with aggravated fatigue arising due to working from home.
When companies are getting ROI with their team working from home, why would they invest money in an office space for rent in Noida Sector 63, or any other prominent location? They would rather utilize this money to ensure maximum employee comfort.
Created on Feb 5th 2021 03:37. Viewed 98 times.