CRE ROAD TO RECOVERY: GAINING THE EDGE

CRE ROADTO RECOVERY:

GAININGTHE EDGE

Awfis Leadership Series Summit

August 2021

Leadership Series Summit 2021

The commercial real estate industry has had its own set of opportunities and challenges throughout 2020 and first half of 2021. It has witnessed a tremendous change over the last few months due to the underlying forces of the pandemic. The industry has however, successfully managed to remain robust during the ongoing pandemic. The year 2020 ended on a good note for the CRE sector with signs of revival clear-ly visible from continuous lockdowns that were imposed and an increase in investment activity. And while green shoots of recovery were seen during the first quarter of this year, the second wave did usher in uncertainty which led to a tempo-rary pause in commercial real estate’s path to growth and success.

Despite the endless challenges faced by the sector, the abili-ty to adapt to changing conditions and to bounce back quickly by re-strategizing enabled the commercial real estate market to stay afloat and resilient in the present sce-nario. With vaccination rollouts and slow easing of restric-tions, CRE is transitioning to a recovery phase and is all poised to pick up pace, in the coming years.

The Awfis Leadership Series Summit 2021 brought together the best that CRE industry has to o�er- leading experts, industry veterans and thought leaders to provide actionable insights on the commercial real estate’s gradual recovery and how it is all set to witness an upward growth trajectory, going forward. The main mission of the virtual summit was to discuss the latest trends as well as address the challenges and opportunities shaping the commercial real estate sector by bringing knowledge and information from prominent professionals of the industry.

This report features a compilation of the key learnings and strategic guidance derived from two iinsightful Panel Discus-sions during the Summit into what the future holds for the CRE industry, what is going to be the gamechanger for the sector in the coming months and how CRE leaders can take advantage of the various opportunities to flourish in the market.

01

Panel 1 : Resilient CRE sector: Past, Present & Future 3-7

Panel 2 : Reimagining workspaces: Perspectives from

IPC's vantage point 8-12

CONTENTS

Leadership Series Summit 2021 02

The years 2020 and 2021 have forever changed the way organi-

sations function around the world and with emerging trends and

new learnings, the CRE industry had to quickly re-strategize and

adapt accordingly. And while the ever changing normal has dras-

tically impacted the CRE sector in 2020, better days are expect-

ed, going forward as the industry reimagines its strategies to

overcome the di�culties brought about by the pandemic for a

sustained recovery and to gain momentum in the coming years.

Resilient CRE sector: Past, Present & Future

P A N E L / 0 1


Key Insights

1The demand for CRE is seeing an

uptake especially from the IT sector

since the cost of operating in India is

lower compared to other markets as

well as the large pool of talent the

country has to o�er.

2A strong penetration of flex o�ce

spaces will be seen in Tier II & III

cities since organisations want to be

closer to employees who have

moved back to their hometowns in

these cities.

3India has been on a digital transfor-

mation journey and is known as the

outsourcing hub of the world. With

that journey continuing to grow the

industry will see hotelization of

spaces by 2030, since flexibility is

demanded by the new workforce.

4In the coming years, with hoteliza-

tion of spaces, residential segments,

malls, and o�ces will overlap with

each other. Therefore, development

companies will become service

companies.

5There is an increased focus on

development because of quality

supply especially due to lease and

up lease models.

6Nearly 50% of the real estate is insti-

tutional in terms of ownership, so

there is a lot of pressure from inves-

tor partner in terms of rental pres-

sure and future retention.

7Coworking seats absorption will be

at about 20-30% of the total o�ce

leasing by corporates in 2022

8Grade A o�ce stock is predicted to

grow to ~750 msf by 2022.


“The first and the second wave did have an impact on commercial real estate especially on-demand that was nearly half of its 2019 level. Net absorption may reach 2019 levels by 2025, however, new completions in 2021 may witness lag due to 2nd wave. Post the outbreak of pan-demic the business continuity plan has taken center stage of the risk management process and most companies are now contemplating “Core + Flexi + Location Agnostic” model as a way forward for their o�ce requirements. In long run, the fundamentals of Indian o�ce sector remain strong due to its vast talent pool as well as cost arbitrage that will encourage MNCs to continue to outsource work to India as well as set up their captive business centers. The Indian IT and start-ups that have emerged stronger during the pandemic are also expected to drive the demand for o�ce space in coming future.”

“With more than 75% of the workforce wanting to return to the o�ce, we certainly feel that the commer-cial real estate business will see a steady increase in demand to 30-35 million sft per annum levels next two years. The learnings from the COVID-19 pandemic are bound to bring in progressive inclinations such as well-ness has taken centre stage in our lives. Soon, property wellness will also be closely monitored by developers via a business intelligence enterprise dashboard. We also foresee a fundamental shift from the permanent workforce to freelance or contract-based work, thus making Co-working space an amenity in the coming years. Developers are destined to be “a service indus-try”. We have noticed that companies are now focus-ing on adopting a flexible and dynamic work model; therefore, occupiers desire flexibility in contracts. With nearly 50% of Grade A o�ce real estate now being institutional in terms of ownership, there is drive on asset enhancement with the intent to retain and improve overall customer experience and extract better economic value.

EXPERTINSIGHTS

Sanjay DuttMD & CEO, Tata Realty and

Infrastructure Ltd.

Anuj PuriChairman, ANAROCK Property Consultants

Private Ltd


“With respect to crucial learnings from the pandemic, the learnings occu-piers derived from the crisis will be very di�erent from an investor’s learn-ing and similarly the lessons that the developers learnt will be something entirely di�erent - the culmination of all these will make real estate a much more robust environment to work in. Going forward, product enhance-ment is something to watch out for as buildings will have to change in terms of the o�ering the client is looking for. Developers also need to step into the occupier’s shoes and understand what they want to deliver accordingly.”

“The commercial real estate sector was quick to embrace the evolving business landscape amid the pandemic. With the gradual lifting of lock-down restrictions and the government’s mass vaccinations drive – we can expect businesses to display an increased inclination towards co-work-ing/flexible spaces to meet the evolving real estate requirements. We can expect commercial leasing activities to gain momentum in the next quar-ters, with a renewed demand for ‘blended’ o�erings that include tradition-al o�ces, flexible/co-working spaces, and personalized human-delivered services – enabled by new technologies.”

“In response to COVID-19, commercial real estate stakeholders have adapted quickly on the physical and technology fronts, health and safety and cost controls. Despite the second wave, liquidity and investments are improving as we are witnessing a positive sentiment amongst investors as compared to last year, where they preferred a cautious approach. The CRE market needs to see movement beyond renewals towards pre-commit-ments and built-to-suit o�ce deals, which will create more optimism amongst occupiers. We also expect share of flexible workspaces in total demand to increase in the future. Over the next few quarters, we will see more occupiers incorporating best practices to improve and modernize the workplace in terms of refurbishment and design.”

Ramesh Nair CEO India & MD,

Market Development, Asia, Colliers

Juggy MarwahaCEO, Prestige O�ce Ventures

Ram ChandnaniManaging Director

Advisory & Transaction Services India, CBRE

“The ongoing pandemic has had an unprecedented impact across indus-tries and real estate was no exception. However, one of the few resilient sectors in real estate that was able to sustain the disruption caused by the pandemic was the commercial real estate sector. Despite the pandemic’s impact on its operation, culture and the way in which the industry func-tions, the CRE sector was able to bounce back stronger than ever.”

Mr. Amit Ramani,CEO & Founder, Awfis


Which aspects of CRE were most a�ected by the first and second wave?

AUDIENCE INSIGHTS

01

What can help the industry to recover and thrive in the coming months?02

Operations

Investments

Leasing

All of the above

26%

16%

32%

54%

Adapting to shifting occupier preferences

Identifying new business opportunities

Focusing on driving e�ciency and providing value

Leveraging technology to improve tenant experience

49%

26%

45%

46%


*The respondents could select multiple options

The definition of an o�ce is forever evolving with the pandemic

changing the idea of a traditional workplace. Organisations and

employees alike had to adapt quickly and with vaccinations

rollouts and gradual easing of restrictions, they have begun to

reconsider the concept as well as purpose of an o�ce space. It

has become important to reshape workplaces for the modern

workforce and the post pandemic o�ces of tomorrow will have

to be redesigned in such a way that it meets the changing needs

and expectations of employers and employees, both.

Reimagining workspaces:Perspectives from IPC's vantage point

P A N E L / 0 2


1We are now dealing with a liberated work environment and collaborative workspaces are a subset of this new work environment. With this trend, a conventionally popular trend of building the o�ce first and then hiring has been reversed. Despite these changes, o�ce is a flag that stands for stability, retaining and hiring talent.

2Working from home had its impact

on employees in terms of stress and

diminishing the overall well-being of

the employees. In today’s world,

hybrid work model, remote working,

work from home will co-exist.

3The other change which will take front seat in reimagining workspac-es is the safety of employees. O�c-es will be designed in line with the new reality where space utilization will get monitored, behaviour adjustments will be taken into con-sideration and the o�ces will provide an environment that yields higher productivity.

4While Work from home has its posi-

tives, o�ces are about collaboration,

engagement, culture building and

talent development which is only

possible with physical o�ces.

5Covid-19 has accelerated a few

trends like digitalization where the

new age workforce have di�erent

attitudes and preferences com-

pared to the millennials.

Key Insights


EXPERTINSIGHTS

“Flexible o�ce sector has shown remarkable growth in recent years with the pandemic not only introducing the concept of work from home but also work near home. Organizations and employ-ees are favouring a more hub and spoke model – a trend that was already a talking point in tier 1 cities now moving towards tier 2 and tier 3 cities too. There is pressure on traditional lease models towards short term contracts and diversifying portfolios in the di�erent micro markets as well.”

“Workspaces are no longer going to be a binary decision- it is going to have work from home, flexibility, and tier 2 cities- all these things will coexist in the world we will be moving forward to. Conversations around flex is on the rise and employee safety is becoming a matter of para-mount importance along with other wellness factors. Space utilisation will also have to be monitored and behavioural adaptation to space environments will be necessary as work environments will be more about experience and productivity.”

Arpit MehrotraManaging Director - South India,

Occupier Services, Colliers

Badal YagnikManaging Director,

Cushman & Wakefield

Janak MalkaniExecutive Director, CBRE

“We are witnessing an accelerated change in performance, expectations, and role of the work-place. Firms have been successful in changing their strategies to ensure seamless functioning, while e�ectively leveraging potential changes in work styles. With a renewed focus on health and safety, businesses are now incorporating smarter and people-centric business models to better fit employee-wellness strategies. While for many the work from home may continue, the demand for physical workspaces is expected to be driven by flex o�erings. The ‘o�ce’ will continue to evolve as a place for active collaboration, and act as a cata-lyst for solidifying corporate culture.”


“Conversations around satellite o�ces are getting stronger and clients are looking for country specific solutions instead of location specific solutions. With respect to the purpose of o�ces, o�ce spaces are spaces to collab-orate, engage, ideate- it is an experience. Employee connect, bonding, camaraderie, talent integration and development, all these need physical o�ce environments. Such spaces are required to build, sustain, and retain culture to socialise and network.”

Sanjay BajajManaging Director - Pune and Logistics &

Industrial Services, JLL

“Every walk of life has been changed by the pandemic including o�ce spaces. We are now dealing with a liberated work environment- hybrid, flex, work from home, in premises work and collaborative spaces are all subsets of a liberated environment. One thing is for sure, o�ce is a flag of strategic importance for the corporate world, a flag that stands for stabili-ty and for retaining as well as hiring talent.”

Viral DesaiExecutive Director –

Transaction, Knight Frank

“With a mass transition to work from home last year, organizations are now gradually breaking away from the traditional o�ce environment and look-ing to build a new type of workspace for the future. The ongoing pandem-ic has disrupted the traditional definition of o�ce and this has led both the employers and employees to reconsider the purpose and need for an o�ce space. In a pre-pandemic world, o�ces were designed to be primar-ily functional however with the changing times and revolving work cultures, companies look forward to building open and collaborative workspaces that facilitates knowledge and idea sharing among their employees.”

Mr. Sumit Lakhani,CMO, Awfis


The major factors driving workplace transformation are:

AUDIENCE INSIGHTS

01

In the evolving work landscape, Organisations are seeking o�ce spaces that puts central focus on:02

Emerging concept that work can be accessed anywhere, anytime

The need for e�cient use of space

Changing employee sentiments/needs

Digital Innovation and advancements

37%

17%

24%

22%

Safety and security

Collaborative opportunities

Flexibility and sustainability

Customization in design

50%

34%

77%

32%

13Leadership Series Summit 2021 12

*The respondents could select multiple options

CRE ROAD TO RECOVERY: GAINING THE EDGE

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