Office footfall starts to recover in biz parks

Business parks across cities are witnessing a steady rise in footfalls with companies asking employees to start working from the office at least for a few days every week. As a result, occupancy rates have gone up from 5-7% in the two years of the pandemic to 20-50%, said industry experts.

In fact, in the second half of March, occupancy rates were up significantly. For instance, Embassy Office Parks REIT saw nearly 33,000 employees attend office on Wednesday in the third week of March, and up to 35,000 on the same day in the last week across its 12 office properties in four cities. And, footfall is expected to rise further in April.

“A record number of people were back at the parks in the last 2-3 weeks. There is an increase every week, particularly on Tuesday, Wednesday, and Thursday. In the Mumbai park, where we have primarily non-IT occupiers, occupancy is at 55-60%, while in Bengaluru, it is at sub-20%. We expect a sharp increase this week,” said Mike Holland, chief executive officer (CEO), Embassy REIT.

Information technology (IT) companies, among the first to adopt the work-from-home model and the largest occupiers of office space in India, also asked employees to return to office from April, though they are likely to continue with the hybrid work model.

CapitaLand Investment Ltd, which witnessed an average occupancy of 5-7% during the pandemic, has seen three- to four-fold growth in March. “...Our clients are looking to welcoming more employees to offices in April. We see this gaining further momentum in the coming months. A majority of our tenants are bullish about their office space requirements and believe physical office spaces are essential to enhance team dynamics, staff development and maintain a work-life balance,” said Gauri Shankar Nagabhushanam, CEO, India Business Parks, CapitaLand Investment.

Business park owners expect office occupancies to return to pre-pandemic levels in the next six months to a year. “...We are seeing a steady increase in the number of tenant employees returning to work. Most of our tenant partners have indicated that they are recalling employees in a structured manner offering flexibility. In certain companies, senior executives have begun working from offices, encouraging their teams to also come to office,” said Sriram Khattar, managing director, DLF Rental Business.

Firms are refurbishing the office spaces and engaging with office park owners to get people back. “It is inevitable for people to get back. While Mumbai is seeing faster adoption, Hyderabad, and Bengaluru will take longer because more people had gone back to their home towns. In a few months, occupancy will touch 35-65%. Demand for office space is strong, and we feel the larger firms will expand first and smaller ones will follow,” said Vinod Rohira, chief executive, Mindspace Business Parks REIT. “….We are working towards a progressive shift to a hybrid model combined with empathetic management, comprising three central pillars: flexible working, connected spaces and anyone anywhere. With the new normal strategy, we have a balanced mix of working from home and office,” said Ashwin Yardi, chief executive, Capgemini in India.

(Ayushman Baruah contributed to the story.)