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Business News›Prime›Markets›Office realty is a ‘radioactive’ investment in the US. Can India stay insulated for long?
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Real Estate

Office realty is a ‘radioactive’ investment in the US. Can India stay insulated for long?

Office realty is a ‘radioactive’ investment in the US. Can India stay insulated for long?
Office realty is a ‘radioactive’ investment in the US. Can India stay insulated for long?
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Thunder and lightning struck the skies over a high-rise building in Mumbai.

Synopsis

In the US, the hybrid work model and a wave of tech layoffs have created an over-supply of workspaces. In India, while things are not dire, the long-term impact on office demand is shrouded in doubt. Even here, MNCs that dominate the rental-office market are considering hybrid work. If that happens, the demand for commercial property may fall.

The Embassy Office Park REIT (Real Estate Investment Trust) stock is on a free fall. Over the last one year, it is down 7% (even after adding the dividend) when the Nifty 50 is up 12%. For Q1 FY24, the REIT has leased 1.1 million sq feet of commercial space across 22 deals and its net operating income is up 9%. The company has big prospects as it caters to multinational clients who don’t hesitate to pay a higher price for office-rental space.
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