Every vertical of the Indian real estate sector, be it the office spaces industry or residential home buying, faced severe headwinds during the pandemic. However, the year 2021 has displayed a fantastic resurgence and some motivating trends for the office space industry. According to a recent report by real estate research firm Colliers, renewals for office spaces accounted for over 30 per cent of the total leasing during a 15-month period.
As the office spaces industry is looking at a robust revival, the following trends are likely to remain buoyant.
Hybrid Work Schedules
Several companies across the globe had asked their work force to work from home and increasing number of people now want a mixture of working from home and going back to the workplace. As highlighted in a survey by Prudential, â€œ68% of global workers now prefer a hybrid workplace model where there exists a flexibility to work outside the office occasionally.â€
From the cost-saving perspective, both organisations and employees have saved a great deal of expenses from the hybrid model. In the post-pandemic world, a mix of office and work from home arrangements are going to be an omnipresent trend.
Co-working spaces to flourish
The co-working office spaces industry is set to witness a 20-30 per cent hike in seat absorption. The robust IT sector of India will be at the forefront of this rising demand. As the cost of operating in India is lower in India as compared to other markets, the demand will see a strong revival in the post-pandemic 2022.
Moreover, the demand for flexible spaces has been at an all-time high from start-ups as they are moving cautiously and want to save cost in the backdrop of a dismal year in terms of business. In addition to this, established corporates are expanding to the Tier II, and Tier III cities and hence, 2022-23 will see a rise in demand for flexible office spaces.
The World Economic Forum (WEF) believes that in the post-pandemic year 2022, the office spaces will be highly tech-enabled. The AI (Artificial Intelligence) assisted job roles, and office environment will be a common sight. The usage of sensor-based dispensers, adaptive technologies and robotics will be preferred in the minimal touch inspired new normal.
AI in offices will primarily be used for repetitive tasks and will let the humans focus on creativity, imagination, and the strategic part. While technology will help the office occupiers, it will also help the operators in saving a significant cost.
Retrofitting and repurposing
As the year went by was tough on the business and finances, large corporates and start-ups are focussing on repurposing and redesigning the office spaces they already occupy. The judicious use of available spaces and retrofitting of properties will be a trend in the coming year. The alternative use of the existing spaces to maximise value will be a trend in large as well as small companies.
The role of interior designers and architects will play a major role in office spaces optimisation going forward. Moreover, uncertainties attached with the new variants of the coronavirus is also leading the companies to tread cautiously in terms of investment in new office spaces.
Open sustainable spaces and natural touch
The year 2022-23 is expected to witness offices spaces with a lot of open spaces and natural touch. As the pandemic has shifted the focus on social distancing and a healthy work environment, the offices will be duly ventilated. Use of sustainable materials such as bamboo, installation of indoor plants, efficient air conditioning and social distancing will be ensured at all costs. The use of tech-enabled and minimal touch equipment will be in vogue.
Incidentally, sensing the trend of ultra-hygienic office spaces in 2022, the large co-working players have already put in place the world-class sanitisation mechanisms and technology backed office spaces.
Flexible lease terms
The pre-pandemic lease terms were infamous for rigid terms and conditions and non-flexible payment plans. However, the pandemic has altered the way the world works, so has the working style of lease providers. The professional office spaces will now be available at flexible and negotiable lease arrangements. As the uncertainties are still to fade away completely, the corporates prefer a no-strings-attached relationship. The icing on the cake is that the relaxed lease terms are coupled with flexible or deferred payment plans. This kind of arrangement is a win-win for both the businesses and the operators. The year 2022-23 will witness a change in the way leases and rentals work.
Focus on mental wellbeing
The Coronavirus pandemic was a blow to the physical as well as mental wellbeing of the working class. In the gradual opening of the workplaces and office spaces, the corporates are ensuring that the workers are mentally fit and sound. This is leading to the provision of recreational facilities, gym, play areas and food joints in the office spaces so that the employees do not get stressed and feel burnt out. Moreover, the offices are being redesigned in such a way that lets the workers feel at ease. This will be a widely seen trend in the office spaces industry in 2022-23.
Conclusively, with companies planning a comeback to offices in 2022-23, the office spaces industry has adapted to the new normal. The high-density offices are a thing of the past, and the new format will cater to the changing preferences of the workforce in a more open environment. The office spaces industry has learnt a great deal from the pandemic, and the strategies for 2022-23 will be heavily impacted by the lessons learnt.
The author of this article is Mr. Nakul Mathur, MD, Avanta India
The views and opinions expressed are not of IIFL Securities, indiainfoline.com