Commercial office portfolio risks during the COVID pandemic and the future beyond – a survey of stakeholders in India

Abstract

PurposeThis paper investigates the dynamic nature of risk in pre-, during- and post-COVID duration. It investigates how commercial office portfolio stakeholders in India perceived risk during the COVID pandemic, their risk response and mitigation strategies, and emerging structural changes that would impact the commercial office portfolio (COP) in the post-COVID period.Design/methodology/approachA qualitative and applied research method is adopted for the study. Through purposive sampling, commercial office portfolio stakeholders were selected and interviewed using a semi-structured questionnaire having two parts. In the first part, risk attributes were accessed on the Likert scale and in the second part there were open-ended questions.FindingsThe uncertainty during the COVID period increased the risk perception significantly. There was a sense of urgency to retain the tenants, preserve the headline rentals and keep the properties operational. COP managers were forthcoming to offer rent deferments, common area maintenance discounts and upgrades in the physical office in form of touchless equipment, better air filters, etc. Post-pandemic there would be extensive use of technology and data for facility management and space utilization analytics; mainstreaming of hybrid working and flexible office spaces; increased certification of buildings; adoption of ESG and sustainability norms; and better-designed buildings with a focus on EHS and wellbeing.Practical implicationsIdentifying structural changes in the post-pandemic period will help the COP managers to align their portfolios to the emerging office market requirements.Originality/valueThis study helps in developing an understanding of the dynamic nature of the risk across pre-, during- and post-COVID periods. And risk responses and mitigation strategies adopted during the COVID period in an emerging market.

Commercial real estate prices in Europe after COVID-19

“…Their results suggest that market participants are expecting the shift to teleworking to durably affect the demand for office space. Focusing on the Indian market, Gupta and Bajaj (2023) highlight the many challenges for office markets after the pandemic, including the mainstreaming of hybrid working and flexible office spaces as well as the adoption of ESG and sustainability norms.…”