Striking a balance between WFH and WFO is need of the hour: Space Matrix CEO

With commercial spaces readying to resume work from site, experts said that office spaces, not just in India, but across the globe may adopt a balance between work from home (WFH) and work from office (WFO). Akshay Lakhanpal, Chief Executive Officer, India, Space Matrix, spoke to Bizz Buzz on the challenges pertaining to redesigning work space to accommodate the emerging hybrid work space and the scope of tier-2 and tier-3 cities to host bigger office spaces in the coming years

In your experience, how has the demand for workspace evolved due to pandemic?

The numbers have gone down drastically in terms of net absorption, to almost half of what it was pre-pandemic. Our sector has seen a lot of stress in terms of trend since the first wave of the pandemic, decision-making has completely stalled. Decision-makers were not deciding because nobody was cleared about what needs to be done. After the second wave, the sentiments have gone up, vaccination has been carried out at an accelerating pace, people are looking at reasons why working from home is not the 100 per cent success. Hybrid is definitely a success, but just as much working 100 per cent from home isn't successful aspect at all, people are rethinking their strategies to get back to work.

People at managerial level are figuring out how to incorporate a balance on work from home and work from office. From a trend perspective, work from office is picking up, I think everybody is waiting and strategizing at the moment. By year end or so is when office activities would regain its levels which were earlier in terms of easing.

What has been the presence of Space Matrix in the Indian market. Has the company set aside a target on client reach for the coming quarters?

We have done approximately 70-80 projects in India since the beginning of the pandemic. These would constitute around 60 clients. In terms of square foot, we have done project on approximately 3.5 million sqft - some of the clients have asked for technologies wherein they can accommodate work from home, some have asked for equitable space solution where some are working from home and some working from the office. Our solution offering has varied. Business plummeted after the first wave itself, but only since June-July we are seeing monthly recovery happening.

Most of your clients constitute of established firms. Any plans to cater to the Indian start-ups?

We largely work with IT firms but 15 per cent of our client base also includes Indian startups. We have done office spaces for Browserstack, OYO Homes, Stanza Living, we have recently worked for Dream 11 as well. Some of these clients work with us they want to build a brand while it's in a startup stage, so office goes a long way in terms of making sure that the brand is built on an ongoing basis.

In your opinion, what is the future of hybrid workspaces in India?

Hybrid is here to stay for sure, not just in India, but globally as well. But I think the most interesting piece about hybrid is that each organization is figuring out how to inculcate the new model, which aligns with their business strategy, HR strategy, their complete business operations. So, all of these things come together for them (companies) to figure how much they want to include a hybrid model, whether 10 per cent, 50 per cent or zero per cent. The design solution is going to be different for each company.

Our workplace strategy teams work with the clients to figure that ease out to say what kind of hybrid solution needs to be built for them. We bring in the best of the two worlds, what works best from WFO and WFH.

Any strategy to enter into tier-2 and tier-3 cities in India?

We are catering to firms based out in tier-2 cities but from our offices located in 7 (tier-1) cities in India. Going to tier-2 cities is not a financially viable model in terms of setting up (work) studios over there. But have mobile teams, we do design in a centralized fashion and then we have delivery teams which go to the project cities, delivery the project and come back. We have worked in cities such as Lucknow, Cochin, and outside India in Dhaka and Kathmandu.

After the pandemic, organizations are happy to look for talents in tier-2 and tier-3 cities, without bringing them to tier-1 cities. This change will bring hub and spoke model for most of our clients as well, where they will bring in smaller spaces in tier-2 cities and smaller towns. The potential is huge but we might not shift our work studio to those cities.

Would Space Matrix be tapping in on the health infrastructure segment or any other allied industry segments?

We are doing labs and office spaces for pharmaceutical companies such as IT labs or testing lab, but hospitality sector isn't our domain. In terms of workspace design, what we intend to do is work in incubator space, setting up test centres for clients. We are also getting into workspace operating system which is technology platform, which brings in all possible technologies which are used in a workspace onto a singular platform to be able to give personalization and customization, and this is something towards which we are working very aggressively.

Apart from Covid, the realty segment is also been affected by prices of raw materials and logistics constraints. Your thoughts on coping with these difficulties.

Logistics is a definite challenge, but I think most of the Indian firms have figured out a way to work around it. But raw material prices are a big challenge, especially 30-40 per cent of the fit-out metal and metal products that kind of cost has gone up through the roof, the wood prices have gone up. This has definitely affected the overall cost that the end client has to bear to develop their office. This is certainly affecting us, the end clients and the overall cost of the project.

Like most companies in realty segment, your company too suffered some losses due to Covid. What was the drop percentage in the annual turnover?

So, our company's turnover stood Rs560 crore 2 years ago. That number has obviously dropped. The idea is to get to that number next year, to get to the same benchmark. Our turnover drop percentage was around 30 per cent.