London Office Demand Set To Fall

The value of commercial real estate in the UK is under threat, as employees become more accustomed to working from home amid the coronavirus outbreak. Companies are reviewing their property requirements and may need less office space, which could hit prices and have a knock-on effect for Britain’s pension funds — many hold considerable chunks of real estate. Various property funds are heavily exposed to offices. Kames’ £442m UK Property Income fund has more than half of its assets allocated to office property. Likewise, the smaller £411m Aviva UK Property Fund has its largest holding in office property — just over 35% of the portfolio. The M&G Property Portfolio, which has been suspended since December, has its top holding in office property — just over 29% of the fund. Others including M&G Property Portfolio, Janus Henderson Property and Standard Life Investments Real Estate all invest in offices.