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Prime offices in London, Paris negatively affected by remote work
A new report from Bloomberg Intelligence (BI) has found that prime offices in London and Paris may acutely feel the pain from remote work as a mix of falling values and widespread vacancy destroys the city networking vibe and leaves high-quality buildings empty.
REIT defenses, such as inspiring green buildings and services, coupled with low leverage, might not be enough. Clusters of ownership where landlords can create destinations — such as British Land’s London campuses — look most resilient.
“European office values are declining, and there's considerable uncertainty as to where they may settle,” said Sue Munden, real estate analyst at BI. “Views expressed by REITs that high-quality space may prove more resilient are backed up by strong leasing activity and low vacancy in those premises as second-hand buildings empty. But with economic growth weak and continued popularity of remote working, it’s possible that secondary space distress may spill