The second quarter of 2020 saw the commercial real-estate being adversely affected by the COVID-19 pandemic, but the market seems to be growing and recovering in 2021. The pandemic has damaged the revenues of most companies, which has led them to re-evaluate their capital expenditures. Since the release of vaccination, companies are expecting the staff to come back to workplace although with raised flexibility given the WFH trend witnessed over the past year. This blog would speak about how the commercial sector has survived the pandemic and is ready for business today and tomorrow.
Business During Pandemic
Before the pandemic, commercial real-estate was a rapidly rising market but during the pandemic, it was one of the worst hit markets as almost all offices were shut down for a considerable amount of time. The parts of the population who were majorly dependent on the rental income, faced heavy losses. After the lockdown period, companies slowly started working with their employees from their respective homes, commercial real estate, one of the top expenditure overheads for a company, had lost its purpose with global workforce going fully remote. Many ongoing projects had to stop their work due to the sudden lockdown, leaving a lot of the population without funds as theirs were invested leaving them in a helpless situation.
Current Scenario
Indian commercial real estate has retained a strong position in the market and is becoming a preferred destination for global institutional investors driven by robust office space take-up, falling vacancy levels, and rising rentals. Since the release of the vaccine, the world is slowly going back to its old ways of work. Few offices have opened but many of IT companies still work from home. Experts suggest that despite the COVID-19 setback, the sector is likely to recover early and may prove to be a good investment option over the long term. COVID-19 did obstruct the growth trajectory of commercial real estate. Having conducted remote work for long enough now, companies space priorities reached a new standard, especially coming from sizable savings for both workforce (time, money) and for companies (rental expenditure and maintenance costs).
Future Scope
According to trade specialists, around seventeen million square foot of workplace house deals are finalised to this point that is predicted to cross twenty million square foot within the months to come back. This is often against 30-35 million square foot annually that is taken into account good, despite the work-from-home model being tested all over. Incidentally, Netflix has hired close to 8,800 square foot workplace house and Morgan Stanley has hired 1.1 million square foot of workplace house in Mumbai. Within the residential area market of Noida, MetLife has hired 2.95 hundred thousand square foot house, whereas in Bengaluru, Microsoft and Intel are attempting to find one million square foot every, to expand their engineering offices. These are just few companies who have adopted to the market. Majority of the offices may have to pursue a hybrid work model, with increased liberty in work from home policy, mandated minimal work from office and optional work from office days. This could reopen the demand for commercial real estate once again with companies looking to reopen office spaces for workforce to come in mandatorily for certain period every year. In the industrial assets market, retail, and cordial reception are growing considerably, providing the much-needed infrastructure for India’s growing desires. The industrial assets sector in India is foretold to be accelerated by giant-scale investments by institutional investors within the approaching years.
At Pyramid Lifestyle, we believe that the businesses that choose to setup their workspaces at our projects are bound to progress. With our evolved office spaces at Pyramid Axis, you will certainly ride the bull even if the market bears the brunt. You get to enjoy 8% dividend on your investment at Pyramid Axis and that’s the kind of progress we’re talking about. We talk business, precisely.
