Stock prices have seemed pretty resilient as government bond markets have wobbled — especially in the UK. But commercial property investors aren’t smiling. The UK sector has gone from a play on the office revival to a bet on whether the ruling Labour party can calm bond vigilantes.
Fundamentals in the market for office real estate are stronger than they have been for many years. Employers are being increasingly rigid in getting workers back to the office, and London suffers a shortage of prime space. HSBC Holdings Plc, moving from Canary Wharf to the center of town, needs more square feet in the east London campus it was meant to be leaving. State Street Corp. is purchasing its next London base outright. BlackRock Inc. is reportedly on the hunt for new premises well in advance of its current lease expiry. Such are the worries about being left stranded.
