Is London’s office market a bargain?
Private-equity groups are swooping on London’s property companies, which are trading on steep discounts to net asset value.
New York’s commercial property is in trouble, say Julia-Ambra Verlaine and Sebastian Pellejero in The Wall Street Journal. Last month only 10% of office workers in Manhattan had returned to their desks. The pain could spread beyond New York. Wall Street “slices” property loans and packages them as commercial mortgage-backed securities. Pension funds and asset managers worldwide participate in this “half-trillion-dollar” debt market, but prices are falling. Some lower-rated US commercial mortgage bonds are trading on between “70 cents to 50 cents on the dollar”.
London property is also in crisis, but these “comatose days” for offices “will not last forever”, says Jim Armitage in the Evening Standard. Post-pandemic, people will probably still head go to the office at least a few days a week. “Canny private-equity groups” such as KKR are swooping on London’s property companies, which trade on steep discounts to net asset value. Yet their focus is limited to firms with office exposure. The outlook for retail space is much grimmer.
London’s offices are suffering from “unprecedented uncertainty” because of the rise of homeworking, says a UBS Research note. But big companies may end up reducing their requirements for space less than expected. Steep discounts to net asset value and proven management teams mean that Derwent London (LSE: DLN) and Great Portland Estates (LSE: GPOR) could interest brave investors.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Carers retire with an average pension of just £6,750
A growing pensions gap shows carers retire with significantly less private pension income than the national average
-
8 of the best properties for sale with award-winning gardens
The best properties for sale with award-winning gardens – from a Victorian Gothic rectory in Hampshire, to a Georgian house in Kent with gardens designed by multiple Royal Chelsea Flower Show gold medallist Roger Platts
-
8 of the best properties for sale with award-winning gardens
The best properties for sale with award-winning gardens – from a Victorian Gothic rectory in Hampshire, to a Georgian house in Kent with gardens designed by multiple Royal Chelsea Flower Show gold medallist Roger Platts
-
AJ Bell: a fine British fintech going cheap
Opinion Don’t overlook investment platform AJ Bell, a significantly undervalued British business with an excellent financial base
-
End of “fleecehold”: Will leasehold reforms bring an end to the UK's feudal system?
Britain’s feudal system of property ownership is being overhauled. It's about time, says Simon Wilson
-
8 of the best properties for sale with communal gardens
The best properties for sale with access to communal gardens – from an apartment in a listed building opposite London’s Hyde Park, to a wing of a mansion with access to 180 acres of parkland in Henley-upon-Thames
-
The British railway industry is in rude health – here's why investors should jump aboard
The railway industry has bounced back from the devastating impact of the pandemic and is entering a new phase of development – and profitability
-
Infrastructure investing: a haven of stable growth amid market turmoil
From booming construction in emerging markets to digital and green transitions, the infrastructure sector offers security, returns and long-term opportunities
-
The costly myth of “sell in May”
Opinion May 2025's strong returns for US stocks have once again shown that putting too much weight on seasonal patterns will only make investors poorer, says Max King
-
8 of the best houses for sale for around £2 million
The best houses for sale for around £2 million – from a houseboat moored at London’s Prospect Quay, Wandsworth, to a 15th-century chateau in Pas-de-Calais, France