Indian Realty Firms Upbeat on Office Space Demand

Despite the coronavirus pandemic hitting demand for office spaces significantly, realty players are bullish about the segment and expect at least 28-30 million sq ft commercial space absorption this year. A 28-30 million sq ft of absorption in 2020 is estimated, which is nearly 40 per cent lower than the record absorption of over 49 million sq ft in 2019. "There will be a demand bounce back currently, things are moving slow but may be next year, we will see the momentum picking up," Mindspace Business Parks REIT CEO Vinod Rohira said during a virtual real estate summit organised by CII. The demand is expected to be back once the government opens up international travel as the capital intensive decisions of investing in commercial space come from the head office. The data privacy continues to be a big worry while working from home along with issue of business continuity, safety, security and governance, as per experts. However, only 10-15 per cent of the workforce in offices have returned so far. The experts are also expecting consolidation in the commercial space as financing will continue to be a challenge with banks still being reluctant to fund.