Finance

Goldman Sachs: Buy the return-to-office boom

Investors should keep their eyes on office developers as staff begin returning to the workplace, Goldman Sachs has said.

The return to the office in the UK is “firmly in progress”, the US investment bank said, with office traffic already back at its summer 2020 highs, and rents set to recover from the Covid pandemic.

“We expect [the return to the office] to catalyse a prime office rental recovery to within 3% of pre-Covid levels by end-2022,” Goldman’s analysts said in a 10 May note. 

The research, focused on the bank’s Europe-wide analysis of economies reopening, comes as the UK government continues to slowly restart the economy.

Although workers are still being asked to work from home, the next phase of the four-step roadmap will kick off on 17 May, with limited foreign travel resuming and the hospitality sector allowed to welcome diners inside their premises. 

READ Office headcount seen slumping up to 80% as new flex work becomes norm

The Goldman analysts said that the combination of positive office-based employment growth in the UK through the pandemic and a 10% contraction in the new office supply pipeline will drive a recovery within the sector.

Developers British Land, Derwent and Great Portland Estates are “well positioned to capture both this expected recovery and the growing bifurcation in demand between old and new office buildings”, their note said.

READ Back to the office — Here’s what we know about who’s going back and when

While workplace footfall is still 28% below its pre-Covid baseline, it is back to matching highs seen in the summer of 2020, the analysts found, based on Google Mobility data.


The use of public transport in Greater London remains 50% below its pre-Covid baseline and travel to workplaces is 45% down, however, according to the latest Google Mobility Data released on 6 May.

Firms around the UK are awaiting guidelines as the government completes a review on social distancing, which will be crucial for companies mulling how to resume a  new era of office life.

Led by the Cabinet Office, the review is expected before mid-June.

To contact the author of this story with feedback or news, email Bérengère Sim

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