UBS to allow two thirds of staff to WFH

UBS is reported to have identified 48,000 employees as being able to work from home

                                

According to a report in the Financial Times, an internal analysis of UBS's 72,000 global workforce identified that around two-thirds had roles that were suitable for hybrid working. 

Whether the employee is allowed to work from home will depend on their role and location; traders and some client-facing staff may be expected to work solely from an office-based location.

As with many other corporations, UBS has not set a date for a return to the office and last year, UBS was believed to be experimenting with virtual reality headsets for its London-based trading staff.

Property fund closures

For investors, the fall-out from the COVID-19 pandemic continues to pose questions about the future of commercial property.  

In May, Aviva Investors announced the closure of its UK property fund over value and liquidity concerns. The firm told shareholders that a review into its value assessment had determined that it would be in investors’ interests to wind the fund up, and also close its two feeder funds.

The group cited uncertainty around property values because of COVID-19. It said it had become ”increasingly challenging to generate positive returns whilst also retaining enough liquidity to re-open the funds.”

In September 2020, Financial Conduct Authority (FCA) regulations came into force requiring commercial property funds to be suspended if there was material uncertainty over more than 20% of the fund’s value.

The death of the office?

The Association of Investment Companies (AIC) said it remains to be seen what the longer-term impact of working from home will be on the office, its location and its purpose.

Annabel Brodie-Smith, communications director of (AIC), told Currency.com: ”In the meantime, it’s important that investors who want to invest in commercial property can do so within a suitable fund structure with reliable redemption rights.

“Proposals for 90- or 180-day notice periods for open-ended property funds are a step in the right direction, but we would question whether they go far enough. In Germany, the notice period is a year. The basis on which an investor can leave the fund should not change, regardless of the level of redemptions.”

Quality not quantity

Richard Shepherd-Cross, manager of Custodian REIT, told Currency.com “Betting against central London has not worked for anyone over the last 20 years, so by hook or by crook I suspect it will survive as an office location.

“That said, the days of the five-day-a-week commute into a central London office are perhaps behind us. Remote working, whether from home, suburban or regional offices, is likely to be a feature for the future. I would back regional offices in towns and cities where people want to live, rather than choosing where to live because of the train timetable, and they can benefit from a short commute to a satellite office.”

Jason Baggaley, fund manager of Standard Life Investments Property Income Trust, said: “There is likely to be an increase in the supply of available office space, with poorer quality offices becoming much harder to let, and suffering the biggest rental and capital value decline. It is too early to say what the extent of that will be, but our expectations are that central London and the West End in particular will be hardest hit, as long and expensive commutes will increase the desire to work from home.

“Generally we expect city and town centres to remain more popular than out-of-town offices, and that car-based commuting will only be a short-term solution.”

Office into accommodation

Baggaley said commercial property could prove to be the solution to the issue of residential under-supply.

“Over the last five years, we have seen a great deal of conversion of old offices into hotels and residential units.

“That is likely to continue, although the demand profile for residential will evolve as people prepare to work from home more of the time, and we are unlikely to see significant hotel demand for a while.”

Richard Shepherd-Cross, added: “The process of converting unused office space into residential space or student accommodation has been underway for some time. Permitted development accelerated this activity and created the opportunity for rental growth in regional office markets.  

“Happily, in most towns and cities, the pricing dynamics of residential or student property will support conversion and I would expect this trend to continue. Even if we see a reduction in demand for office space, the conversion of the secondary office space will help to keep supply and demand sufficiently in balance to support office rental levels.”

Will warehouse be the way forward?

Calum Bruce, manager of Ediston Property Investment Company, told Currency.com that convenience-led retail warehouse assets, which constitute 61.6% of its portfolio, could prove to be more resilient than other parts of the retail market, such as high streets and shopping centres, as they had proved to be during the COVID-19 pandemic.

“During lockdown, several out-of-town retailers were able to stay open for trade as they were classed as providing ‘essential services’ by the government.

“As lockdown restrictions were lifted, but social distancing continued, the attributes of out-of-town retail parks appealed to customers, as evidenced by higher footfall numbers.

“Their accessibility, ample car parking provision, and the space they provide for queuing (avoiding contact with other shoppers), plus the fact that they are open-air, make them the ideal location for shopping in the post-lockdown world.”

A spokesperson for UBS told Currency.com it was looking at allowing staff to work from home, but would not add any further comment.

Further reading:  Venture capital firm launches $2.2bn crypto fund

 

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