We think that the enforced remote-working experiment of recent months will cause a dramatic demand shift in the office sector, with as many as 50% of office-based employees working from home at least once a week. Even with a heroic supply response through substantial conversions and demolitions, we expect vacancy to rise markedly in the next five years and still be elevated in 2030. A combination of reduced occupancy and lower rental values will mean that income returns in an average office portfolio are likely to be down by more than 20% by 2025, only some of which will have been regained by 2030.
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