Real Assets
Commercial Real Estate

Hybrid Working Impacts Real Estate

Published on
May 26, 2022
Contributors
RFPnetworks favicon
RFPnetworks editorial
Engagement & analytics
Subscribe

Trends newsletter

Get our insights on what asset manager selectors are reading. Delivered weekly.
Request successful. You will receive confirmation shortly.
Oops! Something went wrong while submitting. Try again.

One empirical observation that attracts professional investors to the real estate market is landlords ability to raise rent above inflation. But this assumes that vacancy rates are low and tenants are prepared to pay. How does that rationale translate to the office market, two years into COVID?

With clear data insights on office utilisation lacking, drawing conclusions from non-traditional data can share some light on how the new hybrid working model is, and will potentially impact vacancy rates.

Useful trends can be extracted from Google workplace mobility data, Bloomberg's Pret a Manger Index, and the INRIX Global Traffic Index.

What these sources suggest is that the negative impact on office from partial WFH, combined with 20-40% less office utilisation than pre-COVID, may not be compensated by the expected increase in office employment needed to offset the current increase in vacancy rates. If lower office attendance gets absorbed by a shift to hot-desking, and firms aim to reduce their office footprint, the inflation hedging ability of office may deteriorate.

Fortunately, the magnitude of this risk for office real estate investors will vary from city to city, region to region, country to country, tenant to tenant, and industry to industry.

In other words, the assets and the asset managers that investors select going forward, may be very different. At least, the managers we see getting traction inside RFPnetworks are not the ones who usually get all the footfall.

Related Investment Trends

Commercial Real Estate

Follow the asset managers and topics that are trending with manager selectors.
CRE research on RFPnetworks depicted by man crossing a mountain ledge

Will Commercial Real Estate Prices Drop

How depositors react to the latest banking crisis of confidence, may determine the direction of commercial real estate prices.
Read post
CRE research on RFPnetworks depicted by man crossing a mountain ledge

Will Commercial Real Estate Prices Drop

How depositors react to the latest banking crisis of confidence, may determine the direction of commercial real estate prices.
Read paper
Logistics real estate research on RFPnetworks depicted by warehouse

Logistics Real Estate Trends

Logistics real estate has substantial untapped potential for net zero portfolios and decarbonisation. This is what investors are uncovering.
Read post
Logistics real estate research on RFPnetworks depicted by warehouse

Logistics Real Estate Trends

Logistics real estate has substantial untapped potential for net zero portfolios and decarbonisation. This is what investors are uncovering.
Read paper
RFPnetworks Asia Pacific real estate research depicted by aerial photo of Hong Kong Bay.

Which Asia Pacific Real Estate Markets

Asia Pacific Real Estate markets have seen strong inflows. But Singapore, Seoul, China, Japan have very different factors at play.
Read post
RFPnetworks Asia Pacific real estate research depicted by aerial photo of Hong Kong Bay.

Which Asia Pacific Real Estate Markets

Asia Pacific Real Estate markets have seen strong inflows. But Singapore, Seoul, China, Japan have very different factors at play.
Read paper
RFPnetworks Office Real Estate Statistics 2022 depicted by empty office.

Office Real Estate Outlook

Real Estate Investment Managers seem more bullish on Offices than investors. Do their stats add up? Or does the segment need time to find equilibrium.
Read post
RFPnetworks Office Real Estate Statistics 2022 depicted by empty office.

Office Real Estate Outlook

Real Estate Investment Managers seem more bullish on Offices than investors. Do their stats add up? Or does the segment need time to find equilibrium.
Read paper
RFPnetworks latest financial markets statistics depicted by blue bar chart icon

Office Real Estate 1H22 Stats

Office Real Estate 1H22 Stats - Across Europe's top 25 markets, 5.6 million square metres of commercial office space was let in 1H22.
Read post
RFPnetworks latest financial markets statistics depicted by blue bar chart icon

Office Real Estate 1H22 Stats

Office Real Estate 1H22 Stats - Across Europe's top 25 markets, 5.6 million square metres of commercial office space was let in 1H22.
Read paper
Office Real estate research on RFPnetworks depicted by feet walking to work on cobblestone square

Hybrid Working Impacts Real Estate

Office Real Estate valuations rely on the ability of landlords to raise rents. But there are some assumptions that may no longer hold with hybrid working.
Read post
Office Real estate research on RFPnetworks depicted by feet walking to work on cobblestone square

Hybrid Working Impacts Real Estate

Office Real Estate valuations rely on the ability of landlords to raise rents. But there are some assumptions that may no longer hold with hybrid working.
Read paper

Are you an asset manager selector?

Access 40k+ professional investment research white papers