Remote and hybrid work are among the factors hurting the sector, said investment bank Jefferies.
London's main business hubs have seen an uptick in empty space in the past three decades, resulting in the UK capital's capital becoming a'rental recession', investment bank Jefferies said.
The Bank's analysts said that there has been a 20% contraction in the city's office usage due to a post-pandemic hybrid work model and a shift to greener offices in the suburbs.
The survey found that flexible, co-working, and serviced offices account for about 9% of London's space and have moved into some of the vacant facilities.
s first casualty and we think offices are next. Utilization has shrunk and landlords are losing price power as tenants offload surplus space, analysts said.
Jeffries criticized British Land Company and Great Portland Estates in its report, warning that the market will continue to shrink.
The future of London has been a focus of top financial managers recently, warning that the UK capital could lose its status as a leading financial hub. Lloyds Bank revealed that 64% of sector leaders think London will stagnate as a global hub compared to its rivals.