Slackness likely in realty with focus back on WFH
With the Govt of India tweaking work rules for IT SEZ units for one more year, return to offices will be delayed for most companies.
Hyderabad: With the Government of India tweaking work rules for IT SEZ units for one more year, return to offices will be delayed for most companies.
As a result, office space absorption and the corresponding demand for residential units may see some slackness. The complete rebound in the housing rental segment, which the industry was hoping to happen early next year, might also be delayed.
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With hybrid working allowed for one more year, companies are likely to delay expansion plans as they get into a wait and watch mode. Hyderabad, like other IT hubs, too might feel the impact. There will also be some re-negotiations on a few deals, said a real estate industry representative.
After the pandemic, many had opted to work from home. About 40-50 per cent of the employees were now working from offices while the remaining were working remotely on a rotation basis. Many firms were hoping that the employee numbers at offices would increase from January as the earlier WFH norms were set to end this month.
The Department of Commerce last week amended the Special Economic Zones Act to liberalise work from home (WFH) for SEZ units. There is no permission needed to implement WFH as was the case earlier.
Industry body Nasscom termed this change as a major ease of doing business step that enables the IT and Business Process Management industry in SEZs to operate a flexible hybrid work model. Under the new rules, WFH can be provided to upto 100 percent of all employees of the SEZ unit till December 31, 2023.
Earlier this year, a new rule, 43A, was inserted in July to enable WFH for SEZ units. However, the industry wanted greater flexibility. The Government in the December 8 notification, said the hybrid mode of working has become a norm, especially in the IT/ITES sector, in the wake of disruptions caused by the pandemic.
The WFH rules were liberalised noting the needs of the industry and its benefits to Tier-2 and Tier-3 cities. The SEZ units may provide employees laptop, desktop and other electronic equipment needed.
“A big timely step. Thank you for simplifying the SEZ rules,” said CP Gurnani, MD and CEO of IT major Tech Mahindra in a tweet. A hybrid work model will ensure the best of talent and the best of technology for the IT and BPM industry, for India and for global customers, he said.
“Most companies have already started working on a hybrid model. Work from home is definitely not easy for employees and companies as well. In fact, we should be looking for complete work from the office, bringing back the shine of the IT Industry which helps a lot of direct and indirect employment. Also with talks around recession, working from offices gives employees a better vision about projects and work,” said Aswanth, Vice President HR, Workfusion, about the industry trends.
Amarendra Sahu, Founder and CEO of rental solutions company NestAway Technologies, said hybrid work models were making employees return to renting homes as they would have to be in office on a rotation basis. Rising home loan interest rates also support the rental segment, he said.
Managed office space provider Skootr Co-Founder and Director Puneet Chandra said the demand for flexible work spaces that support hybrid and distributed working was on the rise. Enterprises were increasing the percentage of flexible spaces and were re-engineering the premises to accommodate hybrid working, he said.
“Companies are finding it difficult to get the staff work from offices. They are willing to allow them to work from anywhere. Also, some segments do not actually require the staff to be in offices physically as the work can be managed from anywhere if they have a connected system. That is why there is a push for hybrid working,” said a real estate consultancy representative. The demand for office space is not coming from SEZs but is being driven by non-SEZ units, he added.
