Post COVID -19 World, Commercial Spaces will need a re-set.

Historically an address for office space has been very important. With the recent trend of Co-Working spaces and it's popularity has made getting an address even easier for an organizaion. An address for an organisation typically boast about its reputation if it is in the CBD of the city. Post COVID - 19, we see this is going to be changed for several reasons. Address of CBD is not going to be as important anymore compared to location for its tangible advantages such as proximity to large number of employees, connectivity to metro station and connectivity to artery highways.

"We have seen surge of inquiry from large and medium enterprises who wants to shift or scale down their offices located in BKC and Lower Parel in April and May."

said Girish Patel a leasing specialist at Crest Property. As per Girish, organisation are looking at opportunity to save rentals by reducing size of the operating office as they have already invested in technology for data security, accessibility and connectivity for their employees to work from home. This is a major investment which most of the companies did not anticipated and now looking at tangible way to monetise the offset of investment in Work from Home (WFH) capabilities of the organizaion by reducing office space for staff.

So question is what is it companies are looking for when thinking about scaling down the office space. To start with companies are evaluating not only scalding down but can they have lower rentals. Negotiations are on with their existing landlord for trimming rentals or notice for reduce square feet. Companies are already identifying property that offers lower rentals than prominent CBD like BKC which are previously prestigious address but a logistics nightmare as high occupancy and pick hours makes employee spend more hours on roads.

Further, companies are evaluating creating hub and spoke approach. Basically, distributing work space of the Head Quarter limited to C executives with some hot desks and meeting facilities and remaining workstations or hot desk available in suburbs for easy access for staff.

Girish explains that post COVID - 19, office space like Rustomjee Central Park is going to be preferred destination for relocating staff for such hub and spoke model as building already is five minutes proximity to Western Express Highway, in between Western Express Highway and Chakala Metro Station. Plus, connectivity to International and Domestic Airport in pick traffic is not more than 30 mins. This means buildings that are closer to artery road, with mutiple connectivity and lower rentals will be important for companies when thinking about lowering cost of rentals and improving ease of travel for employees.

We have seen some articles published that companies will be spending per employee from 60-70 sq ft space to doubling up to 150 sq ft. Our understanding is that this is unlikely as companies are gasping for cash flow during pandemic plus macro environment was also not positive pre-COVID 19. Decision to spend on more space per employee means, getting more expensive lease space will strain the company balance sheets amid increased expenses on networks, hardware, software and data security because of COVID -19.