Real Estate

Are the Most Compelling Post-COVID Opportunities in Offices?

February 2021 – 7 min read
Property investors and their lenders are shifting down the risk curve and becoming highly selective about sector exposures and asset quality. The Barings Real Estate team weighs in on the opportunity set—and why the overall outlook remains positive.


  • The latest lockdown restrictions will have likely pushed back the recovery, but at least this time around, there is reason for optimism with the COVID vaccine rollout underway.
  • The H2 2021 outlook is now much improved, although there is the downside risk that the virus mutates, increasing the rate of new infections or that it affects vaccine efficacy. 
  • Highly accommodative monetary policy and fiscal stimulus will help to sustain the recovery, with additional support from the European recovery funds for those countries hit hardest by the pandemic.

Property Markets

  • The pandemic has accelerated many pre-existing real estate trends, with logistics and residential the most resilient sectors and retail and hotels the most challenged. Mass working-from-home probably makes the outlook for offices the least certain.
  • Property investors and their lenders are shifting down the risk curve and becoming highly selective about property sector exposures and asset quality. It will be these trends that will drive sector-pricing prospects through 2021 and beyond.
  • Core real estate pricing has held firm through the pandemic, underpinned by the enormous support provided by ultra-low interest rates and the unprecedented fiscal support efforts; but only where structural drivers (demographic and technology trends) remain favorable.

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Paul Stewart

Head of Europe & Asia Pacific Real Estate Research & Strategy

Benjamin Thatcher

Associate Director

Joanne Warren

Director, Real Estate Research

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