Covid Impact on Commercial Real Estate Industry



The commercial real estate market in India has been hit by the COVID-19 pandemic. The pandemic has caused a number of trends to grow, including a rise in the demand for digital comforts and facilities devoted to health. Demand for flexible workspaces and the office sector has risen in Tier 2 and Tier 3 cities.

The commercial real estate sector saw a massive decline following the enforcement of the nationwide lockdown in March 2020. Despite the odds, the industry has survived and shown resilience.

The commercial real estate sector has seen a rise in demand due to a consistent vaccination rate across the nation, and the pattern is expected to continue.

Companies from many sectors are expected to resume working from offices, which would result in a major increase in demand for commercial spaces.

Since they have been one of the most active sectors in terms of employing workers during the epidemic, the information technology (IT) industry will be the main source of growth for office spaces.

The current state of the commercial real estate sector

The pandemic is creating problems in all industries. The commercial real estate sector has seen the most severe changes out of all the affected industries.

The pandemic's effects on social isolation, lockdowns, quarantines, layoffs, and remote work have changed the type of demand for commercial real estate spaces.

The criteria of corporate occupiers have changed since the outbreak. Fair indoor air quality, touch-less technology, and proper office cubicle separation are ever more in demand.

The same is a significant shift from the times before the pandemic, when corporate tenants often looked out large lounges and meeting rooms with high occupancy.

Businesses want to provide their workers with a healthy and secure work environment that promotes new social isolation and worker safety protocols.

The rise in demand for flexible office spaces and commercial real estate

A flexible workplace provides a setting where workers from various companies, cultures, and fields can work, building community ties and increasing capacity.

By selecting flexible locations, businesses can save money on maintenance and utility expenditures.

 

Many companies are adopting a hybrid work model where some employees do their business from homes and others do so in offices. This method of operation ensures the long-term need for office space and the commercial real estate market.

Many enterprises have partnered with co working players to fulfill their workspace needs.

Commercial real estate demand increase in Tier 2 and Tier 3 cities

Cities in Tiers 2 and 3 are seeing significant economic growth and a demand for commercial real estate due to rising population and governmental measures promoting digitalization.

Since the majority of companies began providing their employees with remote work options in early 2020, many working experts relocated to their hometowns.

As a result of the cost savings, occupiers find Tier 2 and Tier 3 markets to be appealing. Future market turns look after by traditional office space developers and flexible space providers.

The digitalization boom in commercial real estate sector

To understand changing client behavioral patterns, adapt to them, and create safe spaces on their properties, developers have started to invest in prop-tech.

In order to reduce employee-to-employee contact and improve safety, developers and co working operators are structuring their commercial real estate spaces to include touch-less entrance, automatic attendance, and voice-controlled features.

Workspace operators can track tenant profiles, tenant applications, and inspection requests, among other things, to simplify the leasing process and other related tasks as artificial intelligence (AI) and cloud-based technologies become more common.

As the workforce returns to work in the following months, prop-tech will address social isolation, air quality, and hygiene issues.

Technology-based innovations like sensor-activated spray, retina-based entry scanners, and digital ventilators will be important to the future of commercial real estate.

Client expectations of this type will rise as more CRE companies begin to provide such digital goods and services, driving more commercial developers and operators to adopt technology in the commercial real estate sector.

Source Link: https://addindiagroup.com/covid-impact-on-commercial-real-estate-industry/

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