Allan Gray's view is that investors are assuming lasting harm for office shares, even though part of the downturn appears cyclical. Elevated vacancies and too much supply have hurt landlords, and worries that AI could shrink white-collar employment have piled on. The firm's view: those fears are already baked into today's prices.
"The unknowable and the concerns over the future are typically a red rag to a bull from our perspective," Mawhinney said.
Across the past 12 months, the fund deployed more new cash into office real estate investment trusts than anywhere else, "by a country mile," said Mawhinney in an interview last week. One standout: Dexus. Although the shares fell more than 20% over that period, the stake that ranked as the fund's 16th-largest holding in December 2025 now sits as its second largest today.
Buying office landlords after a brutal cycle is a genuine contrarian call. Market Briefs covers commercial property free every weekday.
Even as AI hype lifts anything with servers in it, Allan Gray is sitting out data-center plays. Mawhinney argues that prices do not adequately reward investors for risks such as shifting technology, equipment replacement cycles and unknown tenant demand. "Are you paying a sufficiently low price for the risks which present? Or are you paying too much for potential risks?" he asked. He added, "I can't help but think that they are overpriced for the risks that I see on the table today," and warned, "I do think spending billions and billions and billions of dollars on a data center where there is so much uncertainty as to who your tenant will be or even if you will have tenants in 10 years time, it is not a risk-free endeavor."
This is a bet that scary headlines have already crushed prices in offices, while the shine on data centers may be blinding investors to real risks. The fund's strong one-year showing, helped by a big tilt to healthcare, underscores how contrarian positioning can work when the crowd is leaning the other way. If you own office REITs or data-center names, the key question is the same one Mawhinney posed: are today's prices paying you enough for the risks on the table?
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