Tuesday 12 May 2020 2:17 pm

Only 10 per cent of office space in use during lockdown, says Landsec

Property landlord Landsec said only 10 per cent of its office space is currently being used as most employees are working from home during the coronavirus crisis.

The property company, which this morning revealed a £1.2bn hit to the value of its portfolio, said the office sector had seen a “less pronounced immediate impact” compared to its retail assets.

However, less than 10 per cent of its total office space is being used as all employees that are able to work from home have been instructed to do so during the coronavirus lockdown. 

Landsec said it is confident it can shift its office portfolio to meet demands after the coronavirus pandemic.

“The impact of Covid-19 will disrupt the market and, at this stage, the extent of any changes to short- or longer-term trends on the use of office space is uncertain,” the company said.

“We anticipate that there is likely to be a greater emphasis on health, air quality and the flexibility of both layouts and working practices. 

“We expect that this will only reinforce a ‘flight to quality’ and our portfolio is well positioned to meet these demands from occupiers.

“All of our office customers have been impacted by Covid-19 but the strength of our occupier base gives us confidence in the resilience of the portfolio.”

This morning the company said it was on site constructing 600,000 sq ft of pre-let office space in the City, and other speculative developments in Victoria, the West End and London Bridge. 

It also has the option to begin constructing a further 800,000 sq ft of office-led developments in London this year, and 200,000 sq ft in 2021. 

“It is tempting to think that none of us will ever need to work in an office again, but that it not likely to be the case,” said Russ Mould, investment director at AJ Bell.

“Winter weather will make working from home less appealing than it is now in spring, boredom will set in as the novelty wears off and the lack of human interaction could be as bad for mental health as the lack of exercise is for physical health.”