Any pandemic brings in a humanitarian challenge that has lasting effects on how people live, play and work. COVID-19 is no different.
The working world moved rapidly from business as usual to staggered office hours, work-from-home mandates, cautious travel, closed borders to a complete lockdown in certain cases.
The impact
Almost 2.6 billion across the world are now living under some sort of lockdown quarantine under uncertain economic conditions with recovery trajectory difficult to forecast. Sentiments are obviously low in the real estate sector.
The industry is particularly facing a dire working capital crisis which is essential to restart the business. Given that it is a critical sector besides having strong linkage with other sectors in the economy, strong government intervention is need of the hour.
Source: Knight Frank Real Estate Sentiment Index – Q1 2020.
Only an improvement in overall public health will bring an end to the crisis, hence demands for a health policy response is the highest. Considering physical distance is helping the cause, the Real Estate business will undergo some irreversible transformations while adjusting to the new post-Covid world like other industries.
Navigating the crisis
The urgent measures, combined with the ongoing growth of India’s service industries – particularly the shift to e-commerce, tech and finance segments – are expected to help counteract current downward pressure on the country’s commercial real estate sector in 2020.
Experts believe that the commercial real estate will witness a temporary slowdown but other emerging asset classes like warehousing, Industrial logistics parks shall be demand driven and will see a definite boost due to the importance of seamless supply chain distribution development.
Taking the digital leap
The industry leaders have been diversifying sources of revenue, pursuing digital strategies, and focusing on tenant experience. The COVID-19 crisis has accelerated the need for those strategic changes, e.g. one of the big news last week was from CBRE who announced the launch of its commercial listings platform.
At the same time, some behavioural changes may outlive the crisis. Changes in how businesses are operating can be expected to have an impact on tenant requirements for their workplaces, as well as on how landlords design and manage their office properties.
A bellwether example is already being set by Tata Consultancy Service (TCS), who is set to discard its 20-year-old operating model and leapfrog into a new model called 25/25, which will require far less office space post-COVID.
Now is the time to rethink the future of real estate
Crisis forces adaptation. Some species and businesses respond. Others don’t. Post-pandemic, it will be developers who react quickly that decide what the new human environment looks like on the other side.
Almost universally, all of them already seem to agree that sapiens are now looking for a healthier, more stable, experienced-based lifestyle – be it in an official set up or at home.
Some of them are planning ahead and looking to sociologists, futurists, technologists and even the psychologists for answers.
While uncertainty currently reigns, by employing a range of creative personnel and using new methodologies—such as deep design interviews, advanced touchless and keyless technology like voiceprints and optical recognition—business leaders may find new and more predictive insights.
Although, real estate software solutions and technology integration into practices are already making their way into the sphere, acting quickly and smartly will help determine the fate of players not only in these challenging times but also as the industry emerges from the current crisis and inevitably reinvents itself.
HIDECOR’s Conclusion
Office market in India had clocked an all-time high transaction of 5.6 mn sq m (60.6 mn sq ft) in 2019, signalling the robustness of the market.
There is no playbook for the current situation, hence we see a couple possibilities especially covering workspaces:
- Unless a company acts quick and activates a remote-working option for most of its staff, driven by social distancing, the standard 100 sq. ft per person space will expand and hence the demand for larger workspace space. This has its caveat and is industry and function dependency.
- Corporates, in order to curtail capex, may boost demand for managed/furnished spaces or co-working spaces.
We are inviting all SMEs and startups to leverage our subject matter expertise to think about what their workplace will look like in a post-COVID-19 world and answer some key questions like:
- How to plan their space requirements, budgets and designs for the near term?
- How to calculate the efficiency of the space before the sign-off?
- Chalk out the actual design, using technology, which can be replicated in real as and when.
- What are the key factors to be considered for negotiations with the landlord?
- What are the mandatory questions to be asked to the builder before finalisation and cross-validate it with design partners if that would fulfil the requirements?
We like everyone else. we are too looking forward to better times, anticipating circumstances and staying prepared in advance to hit the ground running.
Explore us, talk to us, we are here!
Additional Resources: https://hidecor.in/covid19/
