The commercial real estate market will be expecting growth and getting ready for a post pandemic recovery with the roll out of vaccines in India, according to experts.
In the words of Amit Ramani, CEO & Founder, Awfis and Vice President, Indian Workspace Association-Last year, the pandemic changed the CRE sector in fundamental ways that no one predicted. With the pace of improvement driven by the availability and effectiveness of a vaccine in 2021, the long-term outlook for commercial real estate looks positive in many facets. With the CRE industry likely to recover in the coming months, 2021 foresees a strong partnership between occupiers and developers.
Sanjay Dutt MD & CEO, Tata Realty and Tata Housing said that they have seen significant changes from an occupier’s point of view.
“Occupiers are exiting leases, which do not meet the new benchmarks of environment, health, safety and wellness (EHSW) standards and willing to pay premium and renew & consolidate where they do. Majority of occupiers have deliberated on the work from home vs work from office options and a lot of emphasis has been on building the right infrastructure to make sure one inculcates the culture of the organisation in the workplace for the people since they want them to come to the office. hey are expected to repurpose the office,” said Dutt.
Experts believe that the latter half of 2021 brings with it a lot of new opportunities for the CRE market with respect to the strategies and planning that is required for the evolving nature of the industry.
“For the short to medium term outlook, the developers must listen to their clients and synchronise their supply to real, tangible demand and redesign/repurpose their products for what is the new normal (post pandemic). Additionally, developers also need to focus on stabilising rather than chasing growth and be disciplined about the capital they raise and focus on executing to deliver as committed,” said Arpito Mukerji, Managing Director, Apollo Global Management.
Going ahead, occupier’s health and wellbeing will be crucial to future CRE strategy and investments. Developers need to reinvent their strategies accordingly, although the response to restructuring their portfolios varies from developer to developer.
“The entire focus currently is to stand by our customers and help them tackle the ongoing crisis. In the long run, developers will need to recognise the importance of digital technology across the value chain, right from investments to design / construction and to operations. There will need to be tremendous focus on green power, energy efficiency, cost optimisation, improving customer experience and health & wellness using PropTech - developers who will do this will stand out in the market ,” said Vinamra Srivastava, CEO, Business Parks, CapitaLand India.
The growing demand for more sustainable, smart, and flexible options among occupiers will have an impact on the demand for commercial real estate, as corporates consider a hybrid work culture to reduce excess space from their portfolios.
According to Vinod Rohira, MD & CEO, CRE & REIT, K. Raheja Corp, REITS is a fantastic opportunity for India and right now it is in the stage of infancy.
“If you look at the developed markets of the world, they are way ahead of us and there is more to learn from a governance, compliance strategy, development, and asset management level. If we can get this right, it will be a massive opportunity for India, going forward,” Rohira said.