- Occupancy rates and average rents have declined during lockdown
- The group has the financial strength to withstand substantial declines in income and asset valuations
- More widespread adoption of hybrid working could provide a post-pandemic opportunity
Tip style
Value
Risk rating
High
Timescale
Long Term
Bull points
Shares at discount to forecast NAV
Robust balance sheet
Potential growth in flexible working
Modern, well located portfolio
Bear points
Occupancy rate decline
Rent pricing weakens
Office landlords are arguably facing more uncertainty than those in any other corner of the real estate market. While the government’s roadmap set firm dates for the potential reopening of shops and hospitality venues, no firm guidance has been given for employees to come back to offices in great numbers. More unclear is just how many employers will even require their staff to make the return, and how many will embrace home or hybrid working.