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The COVID-19 pandemic has caused widespread disruptions in the activities of almost every sector, directly or indirectly. This has been the case for the real estate sector as well with demand for commercial properties also being impacted. Work from home has taken a priority for companies to allow their employees to maintain productivity while safeguarding their well-being.
The main buyers of modern office spaces happen to be the IT companies. Currently, with much of the work being done by the employees from their homes, the demand for office spaces has fallen. However, the activities cannot be resumed full-fledged without reopening the offices, which implies that the fall in demand for commercial spaces is only short-term.
Contrary to the idea that the cessation in activities in offices would affect the real estate developers adversely, it now seems like the current scenario may actually open up new opportunities for developers. Keeping in mind the current preventive measures in place, a number of leading IT companies have expressed that they are planning to buy larger commercial spaces where they can resume work while maintaining social distancing effectively.
The reason behind this decision by the IT companies is that not all the work can be done efficiently from home and employees would ultimately need to work from offices. It is expected that a new hybrid model of work would emerge, with a section of the employees working from home and another from offices.
The IT companies have also hinted that in order to maintain social distancing, they might purchase multiple offices across the city, thus resulting in a de-densification of their activities. Overall, it can be expected that the companies would expand rather than reduce their activities in order to thrive.
Certain changes are expected in the commercial real estate projects which would now come up, as a result of the current situation. The buyers would now highly focus on safety and sanitation features as health is of utmost importance. These include modern air conditioning systems which wouldn’t spread airborne diseases, larger personal space per employee, automation features to reduce physical contact, etc.
However, some of the companies which were planning to expand have now been forced to postpone their plans of buying a new property due to the pandemic. This is partially due to the financial strain caused by the pandemic and the lockdown. On a positive note, the situation is expected to reverse as soon as normalcy starts to set in.
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