LONDON – London businesses are shrinking their office footprints and giving up traditional long leases as the pandemic-induced shift to flexible working settles in.
This trend is helping drive up vacancy rates, and is increasing the gap between rental prices in highly sought-after new spaces and less desirable older buildings, Bloomberg Intelligence analysts Sue Munden and Sirine Bouzid wrote in a note on Thursday. “The work-from-home era is polarising vacancy and rents between prime space owned by real estate investment trusts, such as Derwent London Plc and Land Securities Group Plc, and second-hand space,” said Ms Munden.
The survey also found that 70 per cent of respondents’ employers have formalised a permanent policy around flexible working, while the remaining 30 per cent are still unclear on their plans after this year.