Don’t write off skyscrapers yet

WARREN Buffett famously said that investors should be greedy when others are fearful... and fearful when others are greedy – and few things inspire fear like commercial property right now.

This winter is too soon for city centre office life to bounce back fully – but Mark Callender, head of property research at Schroders, reminds us that these things have a way of changing when you least expect it.

He says: ‘In the 1960s and 1970s, London’s population dropped by about 25 per cent as manufacturing moved away. There was some debate then as to whether it was the end of big cities, but London just reinvented itself.’ IBM was an early fan of working from home, but brought staff back into the office in 2017 to improve morale.

‘From 2022 and beyond, we expect a recovery in office rents. Less flexible older buildings are likely to be losers. Looking forward, office designs are likely to think more about collaboration and teamwork spaces – things it’s hard to do at home.’

For those wanting a property bet, Dzmitry Lipski, head of fund research at Interactive Investor, recommends TR Property Investment Trust.

This is an unusual investment trust in that it invests mainly in the shares of property companies – rather than physical properties themselves.

Almost three quarters of the trust is invested outside the UK, spread around the Continent, which may appeal to those looking to diversify away from the UK.

Shares in the trust are down 11 per cent over a year and up 6.2 per cent over three years.

British Land shares are currently £3.54 – down from more than £6 in January, while Land Securities, which owns shopping centres as well as offices, is down at £5.39 from over £9 at the beginning of the year. Even so, these stocks are really only for the brave.