Rethinking Work, Home and Office

Context: Working from home will reshape the labour market and the real estate market.

Impact on Real Estate Market:

• Expected Changes:

• Change in the mainstream business: Now mainstream business conventions have changed; a sales pitch on a video call has been normalised.

• Offices will be restricted to in-person meetings: will become more like convention centres, with meeting rooms and catering, with a small full- time facilities management crew.

• Conflicting phenomenon in over-crowded offices: 

• Some offices will upgrade to a higher area per employee (to traditional styles of work but with greater hygiene) – thus greater demand for Commercial Real Estate.
• Other offices will graduate to more WFH and thus demand less CRE.

• Residential location will be more influenced by nature and culture rather than commute time:

• Locations with modern culture will be prized.

• Reduced Cultural Gap: 

• There will be a two-way feedback loop between art, culture and broadband, and new residential arrangements. 
• The cultural gap between the north and the south will be accentuated.

• Negative Impacts:

• Interaction-intensive consumer-facing services will face challenges.

• E.g. Malls, restaurants, gyms, and movie halls have been hit hard and there is a shift towards e-commerce.

• Declining prices: Due to the inflexibility of India real estate to repurpose Commercial Real estate into Residential Real estate, will lead to a fall in real estate prices.

• Positive Impacts

• Reduced physical presence has its positive benefits, in terms of reducing groupthink.
• Productivity gains through WFH, by reducing the cost of travel/commute.
• Better communication between the senior and those at the lower level.

Impact on Labour:

• Positive Impacts:

• Labour supply by women: A vast untapped resource in India is educated women who are not working.

• This will exert a negative impact on wages in the job profiles where it has an impact.
• Emergence of more women in the public sphere will induce social modernisation.

• Reduced need for Residential Real Estate: 

• If an office only requires a few visits a week, there is a reduced need to live near the office.
• Reduced commute time.

• Direct hiring by global companies: 

• Once WFH works for global corporations, the logical next step for them will be placing the workers in India.
• Demand for this kind of labour will go up, the price will rise, and the invisible earnings will support the rupee.