New research by UBS-AM about the future of the office segment pours cold water upon some speculation over what lies ahead for the asset class after the Covid-19 pandemic.
The study predicts office will not suffer the same level of negative capital growth that has befallen physical retail, as the sector is much more adaptable and underpinned by alternative use options.
It forecasts the trend for home working to accelerate but is cautious on some of the ‘more extreme recent claims on future workplace strategy.' UBS foresees occupiers paying an increasing premium for flexibility, quality office space and for core central locations.
One outcome of these development would be to heighten the polarization with secondary assets and locations, the report says.
An UBS spokesperson said: ‘Part of the issue with this particular topic is that it is highly subjective and views are often driven by one’s personal circumstances and experience.
‘There is a temptation to assume that what might work today, could potentially work indefinitely into the future. In reality the real impact will not be measurable until several years into the future, which makes it very easy for bold claims to be made based on the limited anecdotal evidence currently available.
‘Numerous CEOs of major office occupiers have made such claims, which if taken on face value would imply a major structural shift for the office investment market in Europe. But we have a few reasons to be slightly cautious on these claims.'
