We believe hybrid work policies will likely impede office rent growth over the next several years, but it’s important not to paint all markets with the same broad brush.
- Remote work impact
Work from home is affecting regions and industries differently, creating select value opportunities. - Greater workplace flexibility
Work from home is about more than the pandemic, driven by preferences for greater workplace flexibility that could have lasting implications for office utilization. - Better positioned properties
Regardless of the city, companies that own newer properties offering environmentally friendly features and modern amenities are likely to see better demand and stronger rent growth.
While the global office sector is likely to remain under pressure in the near term, we believe investment opportunities may continue to emerge in select markets, underscoring the importance of active portfolio management.
ABOUT THE AUTHORS
Leonard Geiger, CFA, Senior Vice President, is a portfolio manager who also oversees the research of the office and residential sectors in Europe.
Alec Overby, CFA, Vice President, is a real estate securities managing analyst covering the office and regional mall sectors.
FURTHER READING
3 Reasons to own Listed REITs today
We see compelling evidence to own listed real estate in the current environment
Capital Market Assumptions
Expected returns for the next 10 years amid elevated inflation and resilient global growth
The drivers of listed real estate’s strong start to the year
The absolute performance of listed REITs, their relative performance to the broader market and the drivers of the positive returns.
Index definitions / important disclosures
An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. Index comparisons have limitations as volatility and other characteristics may differ from a particular investment.
Data quoted represents past performance, which is no guarantee of future results. The views and opinions presented in this document are as of the date of publication and are subject to change. There is no guarantee that any market forecast set forth in this document will be realized. This material represents an assessment of the market environment at a specific point in time and should not be relied upon as investment advice, does not constitute a recommendation to buy or sell a security or other investment and is not intended to predict or depict performance of any investment.
This material is not being provided in a fiduciary capacity and is not intended to recommend any investment policy or investment strategy or to account for the specific objectives or circumstances of any investor. We consider the information to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of appropriateness for investment. Cohen & Steers does not provide investment, tax or legal advice. Please consult with your investment, tax or legal professional regarding your individual circumstances prior to investing.
The views and opinions expressed are not necessarily those of the broker/dealer or any affiliates.
Real estate securities. The risks of investing in real estate securities are similar to those associated with direct investments in real estate, including falling property values due to increasing vacancies; declining rents resulting from economic, legal, political or technological developments; lack of liquidity; limited diversification; and sensitivity to certain economic factors such as interest rate changes and market recessions. Foreign securities involve special risks, including currency fluctuations, lower liquidity, political and economic uncertainties and differences in accounting standards. Some international securities may represent small- and medium-sized companies, which may be more susceptible to price volatility and low liquidity than larger companies. No representation or warranty is made as to the efficacy of any particular strategy or fund or the actual returns that may be achieved.
Cohen & Steers Capital Management, Inc. (Cohen & Steers) is a registered investment advisory firm that provides investment management services to corporate retirement, public and union retirement plans, endowments, foundations and mutual funds. Cohen & Steers UK Limited is authorized and regulated by the Financial Conduct Authority of the United Kingdom (FRN 458459). Cohen & Steers Asia Limited is authorized and registered with the Hong Kong Securities and Futures Commission (ALZ367). Cohen & Steers Japan Limited is a registered financial instruments operator (investment advisory and agency business and discretionary investment management business with the Financial Services Agency of Japan and the Kanto Local Finance Bureau No. 3157) and is a member of the Japan Investment Advisers Association. Cohen & Steers Ireland Limited is regulated by the Central Bank of Ireland (No.C188319).
For readers in the Middle East: This document is for information purposes only. It does not constitute or form part of any marketing initiative, any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any products, strategies or other services nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract resulting therefrom. In the event the recipient of this document wishes to receive further information with regard to any products, strategies or other services, it shall specifically request the same in writing from us.