CHENNAI: The dormant office spaces and shopping malls have regained its usual buzz with further relaxing of the lockdown recently, and developers are hoping that the office space sector will revive at least in the second half of next quarter.
“Leasing and sale of office spaces in Chennai were hit hard by the lockdown. The city witnessed 2.1 million square feet of leasing activity, which translates to around one-fifth of the all India activity. In terms of area, there has been a 16 per cent reduction in absorption, the least among the top six cities in India,” says India Market Watch -H1-2020 report released by International Property Consultants, Savills India.
During the first quarter of the financial year many firms expedited its relocation plans. Cognizant moved to 4.7 lakh square feet of office space in Mount Poonamallee, and Bank of New York moved to a new site in Pallavaram Thoraipakkam, Chennai Savills India managing director Anup Vasanth said. “Deals with regard to 1.5 million square feet of office space took place in the first quarter. The figure dwindled to 5 lakh square feet in the next half,” Anup added. A clear picture of the situation will emerge only after six months as several firms are serving notice periods at present.
CREDAI Tamil Nadu Chapter chairman S Sridharan told Express that he is positive that the office space activity would improve once the lockdown was relaxed. Jones Lang LaSalle, Strategic Consulting, chief operating officer A Shankar believes that the office work culture is all set to undergo a major change. “The designs of office space will be revised with thrust on social distancing,” he added.
Meanwhile, real estate consultants claim that the work from home culture is here to stay. “Although only 50 to 60 per cent of employees are working from home now compared to the initial days of lockdown, I hope at least 12 to 15 percent of workforce will continue to work from home,” says Shankar while belittling the claims that employees in IT enabled services and IT companies will continue to work from home.
Anup Vasanth says that this could also result in a hub-and-spoke model where IT offices may do away with some office space and lease spaces near the residences of workers. “There has already been some activity in this regard,” he adds. According to data available from Savills, during January-June 2020, office absorption in Mumbai, Chennai, Hyderabad, National Capital Region, Pune and Bengaluru, stood at approximately 13.7 million sq. ft. as compared to 32 million in the corresponding period last year.
While this pattern may change during the second half, if the pandemic crisis persists, India’s focus on its traditional sectors may need to increase, necessitating vital policy initiatives as well, the Savills India report added.