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Offices, stop or not?

For a long time, office property has been a favorite in real estate portfolios. Generating stable, inflation-indexed cash flows, the asset class made it possible to deploy capital on a large scale, securely and with the conviction that continued capitalization rate compression would deliver attractive long-term returns. That was the world before...
There is still a great deal of mistrust in the office sector, especially outside Paris, where eight out of ten investors expect commitment volumes to fall (Thomas Bekker/Costar)
There is still a great deal of mistrust in the office sector, especially outside Paris, where eight out of ten investors expect commitment volumes to fall (Thomas Bekker/Costar)

Translated from French.

The question is no longer open to debate: the Covid-19 pandemic has profoundly transformed the way companies use office space. According to CBRE 's most recent "European Occupier Sentiment Survey" of over 130 companies, 48% reported attendance rates of 40% or less last year, compared with just 15% who observed employee presence of over 60%. "Getting workers back to the office in large numbers is proving to be more of a challenge than many thought," thus notes the consultancy, adding that 56% of respondents had accepted these attendance reductions as a new state of affairs.

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