Analysts at UBS Asset Management’s Real Estate & Private Markets division have recommended taking “outlandish” statements from companies over the future of the office “with a pinch of salt”.
In a new report, UBS said claims by companies – including Twitter – that remote working will become permanent after the Covid-19 pandemic appeared to be “very alarming” for the European office market.
But they added that the statements are “somewhat contradictory” given that big tech firms such as Twitter and Facebook “have been at the forefront of driving the focus of office occupation on employee attraction and retention”.
“They all rely on intellectual capital and compete for highly skilled creative staff,” UBS’s team said. “The office became a key tool in attracting this talent – huge investments were made in some of the highest-quality buildings across Europe to create working hubs all focused around the concept of interaction and collaboration between their staff. The recent statements appear to be a complete reversal of this policy.”
Corporate media statements around rethinking real estate strategies “often need to be taken with a pinch of salt”, UBS added.
“In the current environment they are a win-win. It demonstrates to shareholders a willingness to cut costs, and offers flexibility to employees. Following through with such measures is often a very different reality… A complete U-turn on a decade of policy focused on employee interaction and collaboration in high-quality CBD office locations seems unlikely.”
Writing in EG, UBS’s Zachary Gauge said there is likely to be a growing gulf between occupiers’ interest in “office locations that offer very limited value-add… [such as] business parks or weaker secondary city locations” and “better-quality buildings which have these value-add attributes”.
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