Over the last decade, the commercial real estate market has transformed and matured, in the backdrop of policy reforms, institutional investments, foreign partnerships and growth in the services sector.
The average demand pan-India, is expected to increase to 46 million sq ft during 2018-2021, as compared to 41 million sq ft noted in 2014-2017. Keeping up with the pace of demand, new supply has also seen an increase of 48 per cent during the said period.
Changing preferences of occupiers and how it impacts commercial real estate developments
However, the decision making process for office space developers has become tough, with regulations like the sunset clause, technological advancements, new corridors being connected with infrastructure developments in the suburbs and shrinking availability of quality assets in core locations, in the backdrop of rising rents.
Factors such as the changing dynamics of the workforce, alternate workplace strategies, co-working spaces and technological advancements, among others, need to be accounted for, while designing a suitable real estate or location strategy. There has also been a sea change among occupiers in the past few years, in their approach towards renting. Occupiers are looking for professionally-managed spaces, improved efficiency and agility to resize the office, with respect to headcount changes.
Impact of co-working spaces on office leasing
The influx of co-working spaces has altered traditional leasing, with occupiers adapting to both flexible office space and fixed office concepts for core operations. Employees continue to be at the centre of decision making, as collaboration and synergies become essential elements of the work culture and wellness is given high importance. Flexible workplace providers and corporates are even organising fitness programs and events, offering healthy food choices at the workplace or providing gym and break-out zones for relaxation, aiming at a stress-free work environment to improve productivity.
Office spaces undergo a transformation
Such disruptors have forced companies to refurbish existing offices and adopt agile workplaces, to attract new talent and retain the existing employee base.