Work From Home & The Real Estate Sector

With financial stress increasing for IT companies and professional services firms, some of the companies have started discussing the possibilities of surrendering a part of their existing rented offices and continue with work from home policies even when there is no mandatory lockdown from the government. The ever lucrative and reliable commercial real estate sector can face some serious trouble in the times brewing ahead.

With tech companies and other companies being forced to allow everyone to work from home in the initial days of lockdown, 3 months later they are discovering that they won’t need all the office space. An estimate of 15-20% of the workforce will continue working from home. An estimate of 5 lakh square feet of office space has been vacated by companies in the last 2 months. This will not only ensure the safety of the employees but also reduce the high rents that the companies have to bear every month.

Some companies like Mid-sized NBFCs are the ones cutting down more and making 50% of their staff available for work from home on a permanent basis. This will allow them to vacate half of their office space. The commercial real estate sector expects the demand for office spaces to come down but it’s not expected to crash. Some offices will also use the spaces to redesign the current spaces according to the international standards or social distancing norms to incorporate statutory guidelines. There can also be a rise in demand for more flexible houses and people will need to covert their rooms into functional and flexible workspaces which will involve interior designers and builders.