LONDON, Sept 23 Reuters British investment managers Legal General and Schroders are to invest hundreds of millions of dollars in commercial property in the United States, but are largely steering clear of the hardhit office sector, the companies told Reuters.

The fund managers, which oversee more than 1.9 trillion pounds 2.5 trillion of assets between them, said they had separately been building up their U.S. real estate teams to make the push, anticipating that property prices will recover, aided by falling interest rates.

Legal General CEO António Simões told Reuters that U.S. real estate was a key expansion market for the company, adding that the market39;s fundamentals remained strong.

Higher borrowing costs and widespread adoption of home working postpandemic have hit property prices globally, with the U.S. office market hit particularly hard and investors still nervous about oversupply.

But expectations of more interest rate cuts after the U.S. Federal Reserve announced a bumper 50 basis points reduction last week have improved the investment outlook.

Property analysts also said the U.S. market tends to reset faster than continental Europe, with lenders and developers quicker to reprice assets.

LG plans to expand its fledgling U.S. real estate equity portfolio by hundreds of millions of dollars over the next few years, while adding a similar level of exposure in its more established real estate debt business, the company said.

The fund manager has built a…