The end of the office has been overegged according to a top asset manager, as he claims investors are underestimating the extent to which people will return to work.
Speaking to the Financial Times, Bruce Flatt, chief executive of Brookfield Asset Management is hopeful that office workers will return to the office and shopping centres.
The Canadian investment group is planning to delist its property arm, Brookfield Property Partners, amid frustration that investors do not recognise the value of its portfolio.
The holdings are “not trading at tangible value” so “it’s the right thing to take it private,” Flatt told the FT.
“Clearly there are differing views about real estate securities. Some people think people won’t go back to the office and that retail will be done online.”
Earlier this month the firm announced plans to take its real estate arm private in a $5.9bn deal, which would see Brookfield offer $16.50 per share in cash.
Brookfield Property Partners reported a $135m net loss for the third quarter, a staggering fall from the $870m profit it reported during the same period last year. The firm was forced to announce a swathe of job cuts in September as the pandemic took a toll on new leasing activity.
But news of a vaccine rollout will be some cause of optimism. Flatt noted the return of office workers in Shanghai, Dubai and Australia as a sign of things to come.
There are signs that London will soon see a return of its office workers. Recent research by JLL shows a “significant” uptick in interest in London office properties suggesting the end of remote working is on the horizon.
On Monday American law firm Latham & Watkins announced it had agreed a major pre-let for an office in the City it plans to occupy from 2026.