Real Estate Investment 2022 18 The officesector The opportunity As organisations adapt to the post-COVID-19 world and the market improves, it’s likely demand for flexible space and new office build models will play an even greater role within the real estate office portfolio. Adapting to this presents both challenges and opportunities for investors and commercial landlords with increased need to deliver spaces that present new ways to optimise how people live and work. Meeting sustainability and ESG requirements continues to be a priority for investors in the delivery of new or refurbished space. Ground up developments and value-add opportunities appeal to buyers with a lower cost of capital than traditional developers, driven by the lack of Grade A stock across London. Investors are also looking beyond London for opportunities. Shorter leases, sub-quality buildings, and a lack of sustainability credentials are leading to an increase in the liquidity at debt and asset level and there are joint venture and repositioning opportunities where current income is stagnating and owners lack capital and/or delivery skills.