Commercial Property

Supply shortages are turning London's office market into a landlord's paradise. CoStar data shows leasing in London's Southern Fringe reached its highest level since 2016, when Apple pre-let nearly 500,000 square feet at Battersea Power Station. City Core prime rents jumped 41.4 percent to £102.50 per square foot since 2019, while West End rents hit £185 per square foot, up 60.9 percent as property data shows. Construction activity fell to a 13-year low in 2025, creating a supply crunch that forces occupiers to pay premiums for Grade A space. Alternative investment firms now pay 24 percent above prime rents and commit to 12-year terms on average, signaling confidence that London's office shortage will persist despite hybrid work trends.

BentallGreenOak sold a central Tokyo office building to a local developer planning luxury apartment conversions, realizing a profit on its value-add strategy. The $628 million sale reflects a pivot from office holdings amid potential oversupply and remote work trends, with BGO raising a record $5.1 billion for its Asia Fund IV last year targeting similar repositioning plays. The deal taps residential demand in central Tokyo where luxury condo conversions capitalize on wealthy buyer interest. BGO's broader Tokyo bet included the $693 million Avex Building purchase in 2021, part of a $10 billion Asia investment plan that now sees exits as office fundamentals weaken globally.