What is the remote work impact on commercial real estate?

The rise of remote and hybrid work following COVID-19 created a complex and evolving impact on commercial real estate globally. In India, the initial expectation that WFH would reduce office demand has been largely contradicted Grade-A office leasing is at record highs in 2023–24.

Short-term Disruption (2020–2021)

• Office occupancy fell to 10–15% during pandemic lockdowns.
• New leasing activity dropped 40%+ in H1 2020.
• Companies paused office expansion plans; subletting activity rose.
• Demand for flex and managed spaces temporarily surged as alternatives to fixed leases.

Resilient Recovery (2022–2024)

• Gross office leasing crossed 60 mn sq. ft. in top 6 cities an all-time high.
• GCCs drove recovery: Global companies set up and expanded Indian delivery centres.
• IT/ITES firms returned to offices, especially in Bengaluru, Hyderabad, and Pune.
• Companies actually upsized offices to accommodate return-to-office mandates.

Remote work's long-term impact on Indian commercial real estate has been nuanced rather than shrinking the market, it has upgraded it. Companies are investing in better offices to attract employees back, driving demand for quality over quantity in commercial spaces.