UK office landlords may not see immediate threat from hybrid work -Citi

Stock Markets42 minutes ago (Sep 28, 2021 07:21AM ET)

(C) Reuters. FILE PHOTO: Westferry Printworks construction site is seen with the Canary Wharf business district in the background, in London, Britain, June 25, 2020. REUTERS/John Sibley

(Reuters) – The hybrid working model may not be an immediate threat for British commercial landlords as corporate decisions on space requirements are taking longer than first thought, a Citigroup (NYSE:C) analyst said on Tuesday.

The brokerage firm raised its ratings on Land Securities and British Land to “neutral” from “sell” while arguing that the ongoing shift to hybrid work models could take a while.

“In London, the drive to return to the office is taking much longer than expected, as are corporate decisions on long-term space requirements,” Citigroup analyst Aaron Guy said.

But, remote work could still push desk occupancy in many offices below 50% over the medium term, causing a fall in demand and rents, Guy cautioned.

Commercial landlords have already suffered steep declines in rental income and footfall at retail spaces due to the COVID-19 pandemic.

As businesses adjust to flexible models of working, they may not give up existing spaces until new office designs become certain, flexible technology is tested and new space is found or existing space is refurbished, Guy said. “This process could take years.”

There still remain risks that could push demand for office spaces lower by about 40% and office rents by 30%, Guy said while noting that any such possibility would be delayed.

UK office landlords may not see immediate threat from hybrid work -Citi

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

More from author


Related posts

Latest posts

China raises $4 billion in U.S. dollar bond deal

Stock Markets12 minutes ago (Oct 19, 2021 08:30PM ET) (C) Reuters. By Scott Murdoch HONG KONG (Reuters) - China has raised $4 billion through a...

U.S. House committee backs contempt charge against Trump aide Bannon

World21 minutes ago (Oct 19, 2021 08:22PM ET) (C) Reuters. FILE PHOTO: Former White House Chief Strategist Steve Bannon exits the Manhattan Federal Court, following...

U.S. House committee backs contempt report on Trump aide Bannon

Sign In/Free Sign Up 0 World24 minutes ago (Oct 19, 2021 08:18PM ET) (C) Reuters. FILE PHOTO: Former White House chief strategist Steve Bannon...


Want to stay up to date with the latest news?

We would love to hear from you! Please fill in your details and we will stay in touch. It's that simple!