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Coronavirus impact: Corporates likely to retain or increase office space portfolio over 6 months

Work from home arrangement to continue for almost half or more staff in next six months


The corporate real estate sector is more likely to retain or increase office space portfolio over the next six months. Connectivity and distraction from family are the biggest challenges for sustained work-from-home (WFH) during the lockdown, as per a Knight Frank Survey.

India has been under lockdown to combat spread of the coronavirus since March 25. The fourth phase was extended from May 18 till May 31, 2020.

Of those corporates surveyed, 62 percent said they would either retain (38 percent) or increase (24 percent) their current office space portfolio over the next 12 months. Only 15 percent respondents said they are likely to reduce their current office space portfolio.

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The Commercial Real Estate (CRE) survey was aimed at understanding the changed workplace dynamics and its impact on the corporate real estate strategies.

"The survey gives us a perspective that real estate users are unlikely to reduce their current portfolio mostly due to the norms of social distancing. Till a viable treatment for COVID-19 is found, office space users will have to maintain or acquire more space to accommodate the existing team," Shishir Baijal, Chairman and Managing Director, Knight Frank said.

Further, most respondents also said that productivity was unharmed due to WFH, enforced since the lockdown. As much as 35 percent respondents feel that current WFH has yielded the same productivity as pre-lockdown phase.

However, the survey revealed that ‘Connectivity’ and ‘Distraction’ from family were two critical challenges faced by the companies’ workforce while operating from remote locations.

An overwhelming 72 percent said that they are likely to continue with WFH arrangements over the next six months due to the social distancing norms and to maintain the business continuity process, the survey said.

Almost 48 percent respondents said that more than 30 percent of their workforce is expected to continue WFH in the next six months owing to social distancing and challenges of transport. And 16 percent respondent identified ‘convincing employees to come to work’ as a challenge towards restarting their office space operations.

Majority respondents also said that ‘maintaining social distancing’ and ‘physical transportation of employees’ are the two main challenges at workplace that all companies will have to find a viable solution to.

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. Going forward, especially in the post-pandemic phase, more formulae will be devised which will include 'work-from-near-home', alongside, 'work-from-office' and WFH. This will, in the long term, ensure there will be offices developments not only in the top eight cities, but also in smaller towns where employees originate from, he said.

In April, firms such as Tata Consultancy Services (TCS) had announced that even after normalcy, by 2025, only 75 percent of their 4.48 lakh strong workforce will WFH permanently. Some firms have also put on hold their expansion plans, while others are in the process of revising floor plans.

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First Published on May 20, 2020 02:58 pm
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