A real estate developer in Greater Noida West struggled to sell his 2BHK inventory at an attractive price of Rs 32 lakhs. The ready-to-move-in property remained largely unsold in the market, even after the developer experimented with various sales schemes and flexi-payment plans. In the same neighbourhood, another developer who had earlier planned a project with 1BHK units and then converted it into a corporate suite, managed to sell his units at a brisk pace. Even though the project was far from receiving its occupancy certificate, the move by the developer to convert the project into office-cum-home spaces, paid off. This seemed to indicate a preference for SOHO in the micro-market.
See also: Is cost escalation forcing builders to compromise on quality?
What is SOHO
The concept of SOHO (small-office-home-office) is an established reality the world over. The design and layout of such buildings, especially in the metro cities, where the cost of land is astronomically high, is to avoid getting into a rat race to avail of the maximum permissible density and then wait for the buyers. Such buildings are rather smartly designed to use space in a manner akin to service apartments.
SOHO helps the dual purpose of providing a small home that is loaded with small office features and vice-versa. It is pretty much the first choice of budget-conscious young couples, corporates, professionals with multi-city presence and lifestyle-seeking youngsters.
The market for SOHO in India
SOHO also answers the dilemma of many developers who are carried away with the post-Covid need for an office within the houses. This is counter-intuitive to the industry narrative that Indians need bigger houses along with an office space.
Owing to the lack of understanding of the market and the buyers’ purchasing power, many developers are struggling to find buyers who could afford bigger houses. With salary cuts and inflation, average middle-class Indians are today looking for compact houses with an office space. SOHO perfectly answers India’s urban housing demands in today’s context.
A leading real estate consultant agrees, while requesting anonymity, since endorsing SOHO while selling large-sized apartments could amount to conflict of interest. According to him, developers started constructing bigger apartments to tap into buyers who were slowdown-proof. However, this has been a short-term solution for them; the long-term solution lies in reaching out to the buyers whose numbers reflect the housing shortage figure in India.
See also: Can home buyers time the real estate market?
“Home buyers who were slowdown-proof and recession-proof were least affected during the Covid pandemic. As a matter of fact, they became a catalyst to the recovery of the housing market, as they could afford bigger houses post the pandemic and hence, we saw a rise in demand. However, for the housing market to reach out to the masses, the developers need to bridge the demand and supply mismatch. The large universe of the buyers have budget constraints and the work-from-home trend has further created the need for an office space at home. Clearly, SOHO is the answer,” says the consultant.
Small office-home office: Can it help home buyers and developers?
Ashish Narain Agarwal, founder and CEO, PropertyPistol.com, says that with the Coronavirus pandemic popularising the concept of WFH and hybrid working, most people have accepted the fact that this concept is here to stay and will play a vital role in the effective use of resources. This has definitely made people prefer having a small space within their homes for work. We had seen a rapid increase in affordable yet spacious homes during COVID-19 and the reason was quite obvious; to cater to the requirements of each member in the family, he maintains.
“Although WFH is gaining momentum and demand exists for a decent amount of space, most of the time buyers do not find it feasible, financially. In such a case, an individual can organise the small space with precise seating arrangement, necessary tech devices, Wi-Fi, etc., giving this space a formal look. The concept of SOHO can benefit many small businesses or start-ups that do not have enough budget to take up an office space,” says Agarwal.
Amit Goenka, MD and CEO at Nisus Finance, categorically points out how the fourth wave that has started in India has made SOHO a reality, creating the need for an extra bedroom or a space that can be used as a home office. The idea that SOHO is here to stay is changing the demand pattern for housing, with 3 and 4BHK homes becoming more popular than in the past.
“Several new ideas are being experimented with – common areas being converted to co-working spaces, collapsible furniture and dual-use furniture in homes, creating small cubicles inside the home, etc. Such ideas are being examined by innovative interior designers, as they try to find solutions in existing homes. Most solutions are being implemented on a customised basis and are quite budget-friendly. However, they are yet to become as efficient as Japanese and Korean homes, which optimise space very efficiently,” says Goenka.
How the concept of SOHO has evolved
The term SOHO has also been witness to change of reference over the years. In its initial conception, SOHO referred to a small business that was often run out of small office spaces, homes, or even virtually. These businesses were commonly considered micro-enterprises. SOHO used to be the choice of business owners who were mostly self-employed and who did not need large office spaces to conduct their day-to-day operations.
See also: Office space for rent vs sale of commercial real estate: Which is a better option?
Now, SOHO is no longer used merely to refer to small office spaces or businesses running from home. SOHOs is today a smart housing solution in metro cities world over. Although the concept may sound similar to a studio apartment, 1BHK or a loft, it is definitely different in terms of design, functionality and its usage. Many of the developers are today offering customised SOHO solutions to buyers and the price range defines the services. At the top-end, SOHO could well be a full-scale service apartment.
Whether SOHO could be the answer to India’s housing shortage and/or demand-supply mismatch in the major cities of India post the pandemic, remains to be seen. Nevertheless, what is certain, is that SOHO has the potential to emerge as a need-based housing solution in today’s context.
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
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