While work from home, WFH, has become a new normal and perhaps a necessity, it does however not bode well for India’s commercial realty. It is expected that around half-a-million sft of office space is getting vacated. This in turn means a negative impact on the building products industry; their demand is likely to dip further.
With companies looking at continuing WFH even post lockdown, there are reports suggesting that a number of service firms and companies in the IT domain are considering surrendering a part of their rented office space. For instance, companies such as Deloitte, PwC, KPMG, EY, Accenture and Cognizant feel that even post lockdown around 25-50% of their workforce would continue to work from home. They would need smaller office space.
Accordingly, they are analysing their real estate strategy, which buildings and offices can be let go off and looking at ways to substantially reduce rental costs. Companies also feel that WFH, in the current situation, ensures both safety and work continuity.
While financial institutions and major consulting companies are the ones currently emphasising on promoting and continuing with WFH, the trend is likely to catch up with other business entities. As a result companies will clearly reduce their investment in real estate and perhaps increase their investment on enabling technology.