Occupiers in India have started opening their doors to employees after a hiatus of two years. Over the last two months, cities like Delhi NCR, Mumbai and Pune have seen employees returning to workplaces at a relatively faster rate. These cities have economically well-diversified commercial markets spanning trading & manufacturing, BFSI, which are contact-intensive services. Moreover, domestic companies have been at the forefront of bringing employees back to offices in a phased manner. Service-oriented markets such as Bengaluru and Hyderabad, which have a strong technology base have also seen a steady return of employees to their workplaces.
The overall market is seeing a surge in workplaces opening in the last few months after the diminishing impact of the third wave of Covid-19, and good vaccination coverage among the eligible population. Beginning March 2022, several technologies and IT companies have started calling employees to the workplace at least two times a week, with most of these majors opting for a hybrid work policy.
Some global companies and MNCs have reopened with a hybrid model of working, but many continue to chalk out their hybrid policies. Overall technology companies are taking more time to develop policies as they continue to work remotely. Indian IT companies have started opening offices in March 2022, with many of the companies planning to return to offices in a phased manner beginning in April 2022. At some companies, the senior management employees are coming into the workplace a few times a week. Consulting companies have also adopted a hybrid work model with employees coming into the workplace 2-3 times a week on a rotational basis.
“Returning to the workplace has been a running theme for the last two years, soon after every wave. However, we are seeing companies opening the office with greater fervour only now. Q2 2022 will be a crucial period as we expect more companies to open up workplaces to their employees through a hybrid model. We have already started seeing companies encouraging in-person team meetings, team huddles and brainstorming meets that were done virtually over the last two years. We are also seeing companies opting for next-gen office spaces that act as centres of collaboration and innovation,” said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.
Overall, business sentiments have significantly improved after the third wave of Covid-19 in January 2022. To corroborate the above trend, Colliers studied the key trends emerging from the Google Covid-19 Community Mobility Reports to understand the change in patterns of visits to workplaces across the top six cities. The study showed that Delhi NCR, Mumbai and Pune have seen a steady increase in visits to workplaces, compared to other cities and are almost inching towards pre-pandemic level. Having said that, the traffic has significantly improved across all the cities in the last 2 weeks. (The visit to the workplace is a comparison of visits in March 2022 from a baseline of five weeks between January-February 2020 pre Covid-19).
Companies need to focus on ‘What will employee want in the workplace’
Overall, occupiers are showing a clear preference for next-generation offices. The focus needs to be on building the office for employees wants, which will keep ‘employee experience’ at its core.
Companies can overcome employees’ fatigue to resume office by making the workplace safety compliant. These new-age offices will promote health, safety, protection and wellness through various facets. At the same time, technology will be an important enabler as offices evolve into a space for collaboration, innovation, socializing.
Landlords and developers can also focus on:
a) High-performance buildings (A high-performance building facilities technology, environment, energy and efficiency parameters to enable greater productivity, health and wellness.)
b) More space for common amenities
c) Sustained wellness measures to bring back employees to offices and highlighting the same to tenants
d) Assisting tenants with renovations to maintain social distancing requirements
There will be immense scope for landlords to upgrade existing facilities. Colliers estimates that landlords and developers have a scope to upgrade around 100 million sq feet of office space in the top six cities, accounting for 14% of the existing stock. Retrofitting of buildings is crucial and can fetch as much 20% increase in rents for developers/landlords. Upgradation should make these offices more attractive to occupiers, leading to a) increased rents and lower vacancy levels, b) high tech buildings and c) sustainability benefits like reduction in carbon emissions.
About Colliers : Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 64 countries, our 17,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 27 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of 20% for shareholders. With annual revenues of $4.1 billion and more than $50 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people.