Allianz vows to keep investing in the office sector

Allianz’s real estate arm plans to continue investing in offices and remains optimistic about the sector’s future despite all the doom mongerers, Alexander Gebauer, chief executive of Allianz Real Estate West Europe, has said. Speaking on a webinar hosted by Duff & Phelps, Gebauer said that while the pandemic had proved that working from home was feasible and that staff didn’t need to go in just to sit and manage their inboxes, the office remained “irreplaceable” as “[it’s] a place to exchange, to create, to invent”. “People talk about social networks such as Facebook and LinkedIn, but the office is a social network where we have our likes and don’t likes, gossip and always something to look at.” However, understanding how offices will be used in the future and figuring out how the office sector can avoid obsolescence and protect values would be necessary, he explained. Gebauer also still has faith in skyscrapers so long as they provide “a sense of health and wellbeing and enable communication and exchange”. But he admitted that “just stacking people on top of each is no longer attractive”. He added that the move to working from home not only put the future of the office under the spotlight but also the residential sector. “A lot of people will rethink whether living in a loft-style open-serviced apartment is really as fantastic as interior designers have made us believe over the last 20 years. When you work from home it’s quite nice to have a door you can shut behind you.” Olivier Terrenoire, global head of asset and property management at Generali Real Estate, also speaking on Duff & Phelps’ webinar, said he was rather pessimistic looking forward to 2021. The lack of coordination about how to deal with the outbreak of coronavirus had made it more complex for companies to navigate, he said. Terrenoire added that he was concerned most of the firm’s tenants would struggle to survive if the current situation prevailed for another six months. “In terms of valuations and expectations the heat may be next year,” he said. A survey by Duff & Phelps and the GRI Club, the findings of which were revealed in the webinar, showed that 80% of respondents believed there would be a U-shaped recovery, John Slade, chairman of the real estate advisory group at Duff & Phelps, reported. A 5% to 10% fall in values was expected by 39% of the respondents to the survey, while 31% anticipated a fall of more than 10%. However, 90% of respondents believed there would be a recovery in valuations next year and 90% said they were ready to deploy capital into real estate when it was appropriate to do so. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette