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After a devastating shock due to the Covid-19 pandemic, the real estate sector is back in action, more so the commercial real estate sector.

Commercial realty had taken a hard hit as a large number of workforce started working from their homes in March 2020 in the wake of the health crisis.

With the economy reopening post a massive vaccination drive, many employees are now returning to their offices. Besides, demand for new office spaces too has emerged.

"We are seeing the working population revert to pre-Covid behaviour with most companies asking employees to report to work physically. Some companies have adopted a hybrid model, and some are now fully physical," Rohit Gera, Managing Director of Gera Developments, told IANS.

The explosion of latent discretionary consumer spending has also driven commercial space launches especially in the retail segment, he said.

"We've spent a lot of time watching the commercial market in Pune and have a lot to say about it. We began with our brand MBC Mantra Business Centres, where we launched a number of projects, including boutique, classic boutique, and two to three-lakh sq. ft offices. This is the general trend in Pune, where MNCs are absorbing large sections of the population. MNCs will be the ones to consume these massive structures," said Rohit Gupta, CEO of Pune-based Mantra Properties.

As the employees and employers are office bound after such a long gap, the immediate beneficiary would be the office and work spaces.

"With the world opening up, the commercial realty space is bound to see a lot of action, both in terms of the number investor interest as well as consumer footfall," said Amit Modi, Director, County Group & President of the Confederation of Real Estate Developers' Associations of India (W-UP).

He said there was also a massive return of footfall in retail and dining, with people embarking on revenge travel, retail therapy and outside dining to make up for the lockdown era.

As a result of the recovery in the office market, the year 2022 is likely to witness strong supply and demand conditions led by cities like Hyderabad, Bengaluru and Delhi.

"The improving job market is already creating demand for office spaces. It means occupiers and companies are again taking up space as per the new, recalibrated hybrid work policy," said Rajan Bandelkar, President of National Real Estate Development Council (NAREDCO), an autonomous self-regulatory body under the aegis of the Union Ministry of Housing and Urban Affairs.

Uddhav Poddar, MD at the Bhumika Group, said: "There is an immense crop-up of commercial developments, retail spaces and leasings in Tier 1 and Tier 2 cities. Top brands and names are vying to introduce their chains in these regions to enhance their brand network and increase their customer base."

Having painted the rosy pictures for the sector, on the flip side, there are some concerns such as possible policy rate hikes by the Reserve Bank of India and rising commodity price inflation.

"The real estate sector has shown superb resilience ever since the pandemic times. The market sentiments might be affected by the possibility of a hike in RBI's policy rates," said Nayan Raheja of Raheja Developers.

Gowever, it is unlikely to have a considerable impact amidst the heightened growth as the recent selling robust figures and growing demands for various real estate investment classes speak the market trend, he added.

According to Pradeep Aggarwal, Founder and Chairman, Signature Global (India) and also Chairman - ASSOCHAM National Council on Real Estate, Housing and Urban Development, "global volatile environment is causing price hikes that ripple from crude oil to the lowest end of every product. Real estate is experiencing the same wave in the last few months, as the inflation in raw materials for the construction of the property is bound to push up the price of housing".

That said, he believes the government would take some corrective policy measures to put a lid on the soaring inflation numbers.

Notably, the Consumer Price Index or retail inflation rose steeply in March to 6.95 per cent, which was above the Reserve Bank of India's upper tolerance band of 6 per cent for three consecutive months in a row.

Even though the rising inflation print is a concern, Ankur Gupta, Joint Managing Director of Ashiana Housing, believes that buying a property for own use provides a safety net against the uncertainty of inflation, market lows and change in the interest rates.