New Delhi: Leasing of commercial spaces by IT companies and IT-enabled services is likely to decline in the coming days as major domestic and international organisations are reducing their expenses and deferring projects due to the impact of the coronavirus pandemic, according to a report by 360 Realtors.
The report noted that in recent years, the gap between Delhi-NCR and other formidable IT destinations such as Bengaluru and Pune has narrowed.
Quality human capital resources, the concentration of Fortune 500 and other major MNCs, and cosmopolitan culture continue to draw the attention of major IT companies. Besides a healthy pipeline of office supplies, robust infrastructure is also a pull factor for Indian and international IT companies to set up their foothold in markets like Gurugram and Noida.
“However, as major domestic & international organisations are cutting down on IT spending & deferring digital initiatives, the downtrend will reverberate across IT/ ITeS leasing activities in Noida and Gurugram. As a part of the business continuity plan, many companies will move to more affordable destinations. Likewise, to accommodate mandated safety and hygiene requirements, a major makeover in the office layout is expected,” it said.
“Amid the pandemic, many companies have begun to question the need for Grade A office spaces. As firms cut costs to weather the recession, office real estate will be at the top of the list to shed. Already Grade-B spaces and Grade-C space are witnessing a sudden spurt in inquiries,” Ankit Kansal, Founder and MD, 360 Realtors said.
IT and ITeS companies are facing muted demand due to a cut down in IT spending globally. Hence, they will like to reduce the cost of operations, he said, adding that there is a strong possibility of a mandate to increase space usage per employee.
Currently, space usage is around 30-40 square feet per employee and that might be increased to 80-90 square feet. This will be an incremental cost burden leading to increased demand for more cost-effective spaces, Kansal added.
