City of London Office Leasing Is Lowest in a Decade: Brookfield

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Firms are continuing to delay decisions about leasing space in London’s main financial district after the U.K.’s vote to leave the European Union, according to Brookfield Property Partners LP Chief Executive Officer Brian Kingston.

“Leasing activity is slow,” Kingston said on a call with analysts on Thursday. “The leases that are getting done, rents are still holding in pretty well. But the level of activity I think is probably the lowest it’s been in over a decade in the City of London.”

Brookfield has been one of the biggest developers of office buildings in the so-called Square Mile since it began buying up land plots in 2010. It sold its stake in the 20 Fenchurch Street tower known as the Walkie Talkie in the third quarter at a capitalization rate of 3.5 percent, one of the highest prices on record for the financial district.

Kingston also said it will be difficult for some firms to move people overseas.

“The idea of moving jobs or moving people from London to some of these other centers is not as simple as just picking up and moving it,” he said. “London benefits from a tremendous amount of infrastructure including housing and schools and just generally quality of life that many of these other cities just don’t have” and “wouldn’t be able to turn on overnight.”

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