Good morning, and welcome to your round-up of real estate news making the headlines this Thursday.
In this week’s EG we report on the state of net effective rents in the London office market. Strip out rent-free periods and other incentives and rents have risen for both five- and 10-year leases as demand gives landlords the upper hand.
But that could change, warns the team at Carter Jonas, noting: “Occupier demand faces the combined headwinds of economic uncertainty, rising inflation and an ever-sharper focus on costs, as well as the ongoing working from home revolution.”
If you’re surprised by that bearish note for real estate, you must not yet have pored over Berenberg’s gloomy paper on the outlook for the UK’s biggest REITs and listed property companies, which we reported on yesterday. In this week’s leader, editor Samantha McClary asks whether the industry’s dark days are here?
Sterling has suffered its worst monthly fall since the aftermath of the UK’s Brexit vote in 2016, dropping by 4.5% to $1.16 on the back of worries over the economic outlook (£) and the policies likely to be adopted by Liz Truss if, as is now considered almost certain, she triumphs in the race to be named the next prime minister.
The Telegraph reports that Truss’s team is considering extending business rates relief to more companies (£) to help them with surging energy costs. That could support the levelling-up agenda given that it would particularly help companies outside of London
The return to the office continues – or at least is being encouraged. Goldman Sachs is dropping the remaining Covid-19 restrictions in its US offices, including a mandate that workers must be vaccinated (£). It was, of course, Goldman chief executive David Solomon who called remote working an “aberration” during the depths of the pandemic. Looks like he’s out to prove his point.
And finally, if you’re heading to the office this morning and need something to listen to on the commute, here’s our latest EG Cities podcast, in which our guests discuss freeports and the future of Southampton.
Enjoy the day.
