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When a country's commercial real estate is healthy - demand and supply of CRE are in sync, there's a steady growth in office space absorption and rentals - it signals that the economy on the whole is healthy.
So, if the health of India's office space market was to be our yardstick today, what does it say about our economic fitness? Here's what we found.
A Quick Background
As the workforce packed up and went WFH in 2021, it also took with it the demand for office space.
📎 The reverse migration of employees to Tier 2 cities, thanks to the lockdowns, has kicked off decentralisation in large organisations, meaning the flexible office space is set to grow in metro as well as non-metro cities.
Yes. As organisations narrow down on the health and wellness of their taskforce, demand for Grade-A offices with contemporary infrastructure is expected to exceed 700 million sq. ft. in 2022, and Delhi-NCR will lead the show with the most number of fresh leases.
However, with vaccinations reaching lightning speed and Omicron displaying decreased destructive capability, 2021 witnessed a strong revival in occupiers’ confidence and office space absorption exceeding levels witnessed during 2016–18, per a report by KPMG.
📎 As we are expected to hover around an 8% GDP growth in 2022, the office space segment should accordingly grow this year.
📎 The shared economy, aka co-working spaces - the trending choice for most occupiers today - is expected to grow at a rate of 20–30% as organisations come out of WFH and adopt the hybrid model.
From Here On
Alright. Got Some Numbers?