Evonite: The office is far from dead

The offices sector is not experiencing an existential crisis despite the fact that many investors are selling off stock, according to Jose Pellicer, partner, strategy, at Evonite.

Jose Pellicier

Speaking to CRE Media Europe, Pellicer said that the idea that offices are redundant in the post-pandemic world of hybrid working needs to be debunked.
“It is interesting how REITs and other fund managers are selling offices,” he said. “The narrative about offices is well trodden – offices are toxic, they need to be decarbonised to ensure liquidity, hybrid working is making offices obsolete, AI is killing graduate recruitment, and therefore the future use of office is in jeopardy. Only the top offices will survive. Nice and neat.”
However, Pellicer pointed out that the data tells a different story. “Things are more complicated,” he said. “Firstly, occupancy is 97% of where we were at pre-COVID, this hardly sounds like a crisis. Secondly, decarbonisation is needed, but it is not as expensive as people think, so long as the price reflects the cost.”
He added: “Finally, the reduction in graduate recruitment could be more of a cyclical issue. Therefore, there is still uncertainty out there, and with occupancy nearing pre-COVID levels, it is not just the top 5% of offices in the city that are doing well.”

Adam Branson