CRE ROAD TO RECOVERY: GAINING THE EDGE - Awfis Leadership Series Summit August 2021
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CRE ROAD
TO RECOVERY:
GAINING
THE EDGE
Awfis Leadership
Series Summit
August 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 offer- 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.
Leadership Series Summit 2021 01
CONTENTS
Panel 1 : Resilient CRE sector: Past, Present & Future 3-7
Panel 2 : Reimagining workspaces: Perspectives from
IPC's vantage point 8-12
Leadership Series Summit 2021 02
PANEL/01
Resilient CRE sector:
Past, Present & Future
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 difficulties brought about by the pandemic for a
sustained recovery and to gain momentum in the coming years.
Leadership Series Summit 2021 03
Key Insights
1 2
The demand for CRE is seeing an A strong penetration of flex office
uptake especially from the IT sector spaces will be seen in Tier II & III
since the cost of operating in India is cities since organisations want to be
lower compared to other markets as closer to employees who have
well as the large pool of talent the moved back to their hometowns in
country has to offer. these cities.
3 4
India has been on a digital transfor- In the coming years, with hoteliza-
mation journey and is known as the tion of spaces, residential segments,
outsourcing hub of the world. With malls, and offices will overlap with
that journey continuing to grow the each other. Therefore, development
industry will see hotelization of companies will become service
spaces by 2030, since flexibility is companies.
demanded by the new workforce.
5 6
There is an increased focus on Nearly 50% of the real estate is insti-
development because of quality tutional in terms of ownership, so
supply especially due to lease and there is a lot of pressure from inves-
up lease models. tor partner in terms of rental pres-
sure and future retention.
7 8
Coworking seats absorption will be Grade A office stock is predicted to
at about 20-30% of the total office grow to ~750 msf by 2022.
leasing by corporates in 2022
Leadership Series Summit 2021 04
EXPERT
INSIGHTS
“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
Anuj Puri
Chairman, ANAROCK “Core + Flexi + Location Agnostic” model as a
Property Consultants way forward for their office requirements. In long
Private Ltd
run, the fundamentals of Indian office 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 office space in coming future.”
“With more than 75% of the workforce wanting to
return to the office, 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- Sanjay Dutt
MD & CEO, Tata Realty and
ing on adopting a flexible and dynamic work model; Infrastructure Ltd.
therefore, occupiers desire flexibility in contracts. With
nearly 50% of Grade A office 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.
Leadership Series Summit 2021 05
“With respect to crucial learnings from the pandemic, the learnings occu-
piers derived from the crisis will be very different from an investor’s learn-
ing and similarly the lessons that the developers learnt will be something
entirely different - 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 offering the client is looking for. Developers also need to step
Juggy Marwaha into the occupier’s shoes and understand what they want to deliver
CEO, Prestige Office Ventures
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’ offerings that include tradition- Ram Chandnani
al offices, flexible/co-working spaces, and personalized human-delivered Managing Director
Advisory & Transaction
services – enabled by new technologies.” Services India, CBRE
“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 office deals, which will create more optimism
amongst occupiers. We also expect share of flexible workspaces in total
Ramesh Nair demand to increase in the future. Over the next few quarters, we will see
CEO India & MD,
Market Development, more occupiers incorporating best practices to improve and modernize
Asia, Colliers the workplace in terms of refurbishment and design.”
“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
Leadership Series Summit 2021 06
AUDIENCE INSIGHTS
01 Which aspects of CRE were most affected by the first
and second wave?
26% Operations
16% Investments
32% Leasing
54%
All of the above
02 What can help the industry to recover and thrive in the coming months?
49% Adapting to shifting occupier preferences
26% Identifying new business opportunities
45% Focusing on driving efficiency and providing value
46%
Leveraging technology to improve tenant experience
*The respondents could select multiple options
Leadership Series Summit 2021 07
PANEL/02
Reimagining workspaces:
Perspectives from IPC's vantage point
The definition of an office 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 office space. It
has become important to reshape workplaces for the modern
workforce and the post pandemic offices of tomorrow will have
to be redesigned in such a way that it meets the changing needs
and expectations of employers and employees, both.
Leadership Series Summit 2021 08
Key Insights
1 2
We are now dealing with a liberated Working from home had its impact
work environment and collaborative on employees in terms of stress and
workspaces are a subset of this new diminishing the overall well-being of
work environment. With this trend, a
the employees. In today’s world,
conventionally popular trend of
hybrid work model, remote working,
building the office first and then
hiring has been reversed. Despite work from home will co-exist.
these changes, office is a flag that
stands for stability, retaining and
hiring talent.
3 4
The other change which will take While Work from home has its posi-
front seat in reimagining workspac- tives, offices are about collaboration,
es is the safety of employees. Offic- engagement, culture building and
es will be designed in line with the
talent development which is only
new reality where space utilization
possible with physical offices.
will get monitored, behaviour
adjustments will be taken into con-
sideration and the offices will
provide an environment that yields
higher productivity.
5
Covid-19 has accelerated a few
trends like digitalization where the
new age workforce have different
attitudes and preferences com-
pared to the millennials.
Leadership Series Summit 2021 09EXPERT
INSIGHTS
“Flexible office 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.
Arpit Mehrotra There is pressure on traditional lease models
Managing Director - South India, towards short term contracts and diversifying
Occupier Services, Colliers
portfolios in the different 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 Badal Yagnik
Managing Director,
experience and productivity.” Cushman & Wakefield
“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 effectively 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
Janak Malkani physical workspaces is expected to be driven by
Executive Director, CBRE
flex offerings. The ‘office’ will continue to evolve as
a place for active collaboration, and act as a cata-
lyst for solidifying corporate culture.”
Leadership Series Summit 2021 10“Conversations around satellite offices are getting stronger and clients are
looking for country specific solutions instead of location specific solutions.
With respect to the purpose of offices, office spaces are spaces to collab-
orate, engage, ideate- it is an experience. Employee connect, bonding,
camaraderie, talent integration and development, all these need physical
Sanjay Bajaj office environments. Such spaces are required to build, sustain, and retain
Managing Director - culture to socialise and network.”
Pune and Logistics &
Industrial Services, JLL
“Every walk of life has been changed by the pandemic including office
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, office 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 Desai
Executive Director –
Transaction, Knight Frank
“With a mass transition to work from home last year, organizations are now
gradually breaking away from the traditional office environment and look-
ing to build a new type of workspace for the future. The ongoing pandem-
ic has disrupted the traditional definition of office and this has led both
the employers and employees to reconsider the purpose and need for an
office space. In a pre-pandemic world, offices were designed to be primar-
ily functional however with the changing times and revolving work
cultures, companies look forward to building open and collaborative
Mr. Sumit Lakhani,
CMO, Awfis workspaces that facilitates knowledge and idea sharing among their
employees.”
Leadership Series Summit 2021 11AUDIENCE INSIGHTS
01 The major factors driving workplace transformation are:
37% Emerging concept that work can be accessed
anywhere, anytime
17% The need for efficient use of space
24% Changing employee sentiments/needs
22% Digital Innovation and advancements
02 In the evolving work landscape, Organisations are seeking office
spaces that puts central focus on:
50% Safety and security
34% Collaborative opportunities
77% Flexibility and sustainability
32%
Customization in design
*The respondents could select multiple options
Leadership Series Summit 2021 13
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