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Post Covid-19 the per capita office space allocations is likely to increase despite a segment of employees are to work from home.
“In office real estate, social distancing norms may increase the per capita office space allocations. During the last decade, per capita office space allocation reduced from 100-125 sq ft to 75-100 sq ft in the pre-Covid-19 period of January 2020,” revealed Anarock in its report India Real Estate: A Different World Post Covid-19 .
The report added, “Safety and hygiene will become the top priority, even as contactless operations and automation will increase. Decentralisation of operations to ensure business continuity will be a trend reversal from prominent consolidations over the past few years.”
Flexible workspaces is expected to re-evaluate its models. “IT and BPM will continue demand levels. Despite the lockdown and subsequent easing of restrictions, IT-BPM sector is anticipated to continue driving demand for office space,” said consulting firm KPMG in its report called ‘Covid-19: React, adapt and recover – The new reality: A perspective on the Indian real estate sector.’
The report stated: “Despite steady leasing in flexible workspaces across major Indian cities the segment will face major headwinds over the next 9-12 months period.”
“Post lockdown the sector should resume operations by leveraging technology innovations for enabling employee and consumer health safety standards, design flexibility (Work from Home), cost optimisation and consumer engagement (such as AI, VR, BIM, etc), focussed localisation of supply chains, re-organisation of business models, which is likely to revive activity, accelerating Indian real estate’s turnaround over the coming 12–18 months,” said Chintan Patel, Partner and Leader – Building, Construction and Real Estate, KPMG.
Mall revival with caveats
On the retail reality front, Anarock’s report said, “In retail, online businesses will gain momentum - e-commerce giants have already added over 5,000 people to their delivery fleet during the lockdown period. Their consumer base expanded to senior citizens who have embraced technology in the Covid-19 era.”
“Mall revival will come with caveats. With hygiene and sanitation taking centre stage, malls which can offer these will benefit most in times to come,” it added.
Retail real estate recovery expected despite uphill challenges, said KPMG, and added: “India’s consumption expenditure stood at $1.92 trillion in 2018 growing at a CAGR of 7 per cent for the last nine years. Post lockdown, consumer discretionary spending is likely to remain subdued. In medium-term potential impact – partial lockdown leasing: 50-60 per cent contraction in mall footfalls expected from pre-Covid-19 levels coupled with a significant down-tick in overall trading density.”
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