JP Morgan expects City of London property values ​​to fall by 20%

Bank JP Morgan predicts that for the year – from March this year to March next year – the value of real estate in the City of London will fall by 20%. The forecast is related, among other things, to concerns about the prospects for the British economy, rising key rates and growing competition from the West End, where office real estate is growing in popularity.

“We fear that oversupply will put pressure on the office real estate market in the City,” he was quoted as saying. Bloomberg bank recommendations for clients.

Demand for offices in London continues to be affected by the transition to remote work or hybrid work, which began in many companies during the pandemic, according to many experts. By evaluation online real estate platform Rightmove and analytics company EG, the number of requests for new office space has decreased by 11% since the beginning of the year compared to the same period in 2022.

Rightmove commercial real estate expert Andy Miles noted that companies are increasingly evaluating their need for office space, taking into account the hybrid work schedule of their employees. In February became knownthat London-based Clifford Chance, one of the world’s top 5 law firms, is planning to downsize its London headquarters. The same is known about many legal and other companies.

True, there are opposite data: according to the Savills real estate agency, the demand for office real estate in central London in the year to the end of March was 10% higher than the average values ​​for ten years. However, Savills also recognizes the potential impact on this market of a difficult economic situation.

Yana Rozhdestvenskaya