Real estate alert! Will Covid-19 pandemic impact office space demand? Here is what experts predict

As Covid-19 pandemic cases continue to rise, people are locked down inside their homes and prefer to work from home. Will this impact office space demand? According to top officials of some key property consultants, office space demand may fall by 5-15 per cent as corporates look to adopt to work from home (WFH) policy, but offices will not lose their importance as remote working poses various challenges like data privacy and staff productivity. This minimal impact on office demand in the medium term could get compensated from additional space that corporates might need to maintain social distancing among staff and control the spread of the coronavirus disease, they said.

In the post COVID-19 era, the demand for office space could rise from emerging sectors as well as new geographies, said these top consultants, who help corporates in leasing office space.

"Given that WFH challenges such as teamwork, performance management, productivity, creativity, data privacy, apartment sizes, office infrastructure and connectivity, we believe anywhere between 5-15 per cent of office demand could be impacted in the medium term," JLL India CEO and Country Head Ramesh Nair said.

Knight Frank India CMD Shishir Baijal said, "WFH will co-exist, but office space will not lose its importance as a strategic tool for corporate culture development and a source of competitive advantage."

Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE, said, "Given the fact that the COVID-19 situation is fluid and ever evolving; it's too early to call anything a trend, as yet."

Anarock Chairman Anuj Puri said, "WFH is not a catch-all solution - many business verticals and functions still require employees to work in an office setting."

Anshul Jain, MD (South East Asia and India), Cushman and Wakefield, said, "Our current situation has forced us to work from home and we all have done a splendid job without a doubt. But it was always clear that this was temporary, and there weren't any distractions."

Savills India CEO Anurag Mathur said a small part of the physical workspace might make way for work from home as a result of COVID-19 event. "However, it is unlikely that virtual workspaces or work from home will completely replace office spaces in the near future," he said.

However, Arnab Ghosh, National Director, Fitout at Colliers International India, said, "Work from home is a new reality today because of an unprecedented pandemic, but for it to be a norm, it needs to overcome quite a few social, cultural, and infrastructural challenges."

Shrinivas Rao, CEO-APAC, Vestian, said the question of whether WFH works has been answered, thanks to its forceable implementation during the COVID-19 pandemic.

Despite a multi-year demand slowdown in the Indian real estate, office market has been performing very well for last few years. Net office space leasing stood at 47 million sq ft in 2019, while gross numbers were in the range of 55-60 million sq ft.