Warren Buffett ponders the future for offices

Warren Buffett has highlighted the likelihood that the coronavirus pandemic will fundamentally affect supply and demand dynamics for office and retail spaces in the long term. The billionaire investor discussed this as well as various topics including Covid-19, buying stocks during the pandemic, and the US’s prospects during Berkshire Hathaway’s annual meeting on Saturday (2 May). Responding to a question on businesses that might be impacted by the pandemic, Buffett noted it “won’t be any fun with the businesses where the world has really changed”. “People are developing different habits in retail,” he said. “There’s no question about that. “If you own a shopping [centre], you’ve got a bunch of tenants that don’t want to pay you right now. And the supply and demand for retail space may change fairly significantly. “A lot of people have learned that they can work at home or that there’s other methods of conducting their business than they might’ve thought from what they were doing a couple of years ago.” Buffett emphasised that in these cases, it is important to adapt to these shifts in demand. “When change happens in the world, you adjust to it,” he said. He added: “It may be that what’s happened in the last couple months has accelerated the decline of those businesses, or their customers are developing different habits. “There are businesses that were having problems before and that have even greater problems now.” Buffett’s own consumer habits have changed during lockdown – he said it has been “seven weeks since I’ve had a haircut”, and “more than seven weeks since I put on attire”.  “[It’s] a question of which sweatsuit I wear,” he quipped. “So who knows how we come out of this.” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette