Work from home culture may damage workspace market: Ind-Ra

07 Jun 2021 CW Team

Unfavourable demand created by the work-from-home culture along with the reduction in recent leasing activities as a result of a weaker economy can easily hit 40% off annual demand for the next few years, as per India Ratings and Research (Ind-Ra).

The agency told the media that this negative demand can lead to over 500 basis points increasing the vacancy levels over FY21 to FY23. While the impact on upcoming workplace providers is likely to be particularly sharp as these may struggle to let out their upcoming properties.

Almost 83% of employees surveyed recently by Accenture favoured a hybrid work model with the flexibility to work remotely 25% to 75% of the time.

Ind-Ra stated such a transition to working remotely can severely hamper office real estate demand as it may allow companies to use a hot-desking policy.

If 2.5% of total staff are asked to report to work on alternate days and use the hot-desking policy, it may result in a net 1.25% reduction in office space required in a country.

Ind-Ra said that on a base of 635 million sq ft of office space occupied in the top eight cities of India at FYE20, it will result in a negative demand of 7.9 million sq ft which is 21% of the average annual demand seen during FY19 to FY20.

Moreover, several international companies have announced hybrid work models where the employees will need to report to the office only on a few days of the week.

Ind-Ra said that occupancy at a large real estate investment trust (REIT) focusing on office portfolio has dipped to 86.8% in 4Q FY21 from 92.2% in 1Q FY21.

Further, the agency added that occupancy at another listed REIT has decreased to 81.8% in 4Q FY21 from 87.1% in 2Q FY21.

Image Source

Also read: 7,400 office leases of 90 million sq ft up for renewal in top 6 cities in 2021

Also read: Embassy REIT to invest Rs 2,800 cr in developing office spaces

Resources

04 Jun 2026

ULCCS Showcases Cooperative Model at UN Symposium

Uralungal Labour Contract Co-operative Society (ULCCS) showcased its community-led development model at the United Nations Headquarters in New York, where it participated as a panellist at the International Symposium on Cooperative Financial Institutions held on 28–29 May 2026.Jointly organised by the United Nations Department of Economic and Social Affairs (UN DESA), the International Cooperative Banking Association (ICBA), and the International Cooperative Alliance (ICA), the symposium was held under the theme ‘Fuelling Inclusive and Equitable Growth’ and brought together policymakers,..

Delhi Airport to Finalise 20-Year Master Plan

Delhi International Airport Ltd (DIAL) is finalising a 20-year master plan to guide long term infrastructure and operational development at Indira Gandhi International Airport, an official said. The operator expects the plan to reflect changes in the airline industry, shifts in the competitive landscape and evolving infrastructure requirements across terminals, airside and support services. The official said the document is likely to be ready in the next two to two-and-a-half months as the operator moves through planning stages. The plan will be prepared after consultations with airport users ..

Aadhar Housing Finance Targets Rs 500 bn AUM By FY29

Aadhar Housing Finance has set a target to raise its asset under management to Rs 500 billion (bn) by the end of FY29, aiming to achieve this over the next three financial years through an 18-20 per cent loan growth trajectory. The firm focuses on the low-income segment with a ticket size of less than Rs 1.5 million (mn) and has relied on that segment to drive expansion. The company closed FY26 with an AUM of Rs 305.71 bn, reflecting the expansion in recent years, and it reported a net profit rise of 22 per cent to Rs 11.08 bn. Management indicated that gross non-performing assets stood at 1.0..