The consequences of the shift to home offices may be severe for commercial property owners
Mannequins and empty clothes rails are seen in a permanently closed store on July 27 2020 in London, England. Picture: GETTY IMAGES/LEON NEALBut as Covid-19 lingers, and second infection spikes dot the global map, something is changing in how employees and employers view the workplace: It’s being seen as an option rather than a necessity for many white-collar workers.
With property being a big business cost, employers would love to cut their space. Burberry, a British luxury company, is exploring whether it can save money on its offices outside the UK. Better news for the property industry is that it will be able to reuse commercial space as residential developments assuming people still want to live in cities once the pandemic ebbs. By cutting supply in this way, UBS estimates that the West End office vacancy rate could stabilise at 5.1% by 2025.
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