City Of London
Rising Rents Aren’t Sparing Landlords From End of Easy Money Era
- Commercial property valuations are dropping even as rents rise
- Rising gilt yields are putting downwards pressure on values
A block of flats near the Canary Wharf district in London, UK.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
The end of the era of cheap money has revived a rare phenomenon in UK real estate: valuations are dropping even as rents rise.
Landlords including Land Securities Group Plc, British Land Co., and Great Portland Estates Plc reported rising rents for their offices, warehouses and even stores this week but it wasn’t enough to prevent them writing down valuations. Its a reflection of the degree to which the sector is being battered by rising interest rates, which have overwhelmed the typical interaction of supply and demand.