Covid impact: Companies give up office space as employees WFH

Cumulatively, companies have given up over 6 million Sqft of prime office space as employees work from home (WFH). More than half of the release of office space has happened in Bengaluru, the country’s biggest market for office space. In fact, before the Coronavirus struck, Bengaluru was reeling with an acute shortage of office space. This has resulted in about 4 million square feet of unused office space.

According to a study, Accenture has been the biggest company that has released office space with it giving up about 0.8 million sq ft of office space in various locations across Bengaluru. Other companies have followed suit-these include MuSigma (0.2 million sq ft), GE (0.3 million sq ft), and Reliance Capital (0.7 million sq ft) where it has leased the same to other companies.

“The average expense per employee comes to Rs.15,000 per seat a month and now, with so many working from home, companies have realized that the savings of giving up space will directly go to the bottom line,” Srinivas Rao, CEO (Asia-Pacific) of workspace solutions firm Vestian Global said.

Companies are looking not to lease office space as most of the employees are now working from home and are unlikely to come back.

In the commercial market, releasing space and delaying expansion plans are common, even if the companies have signed a Letter of Intent (LoI) with the developers. Based on market conditions, a company may or may not go for the expansion of its office space.