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Skyscraper sale to test strength of office market

Vacant office space in London has soared 75%

A London skyscraper is on sale for a record price in what is being seen as a test of the real estate market in the new work-from-home era.

The owner of the 37-storey 100 Bishopsgate building is asking £1.8 billion, significantly higher than the £1.3bn paid for the Walkie Talkie building in, well before the pandemic impacted on office life.

100 Bishopsgate is occupied by law firm Freshfields, the Royal Bank of Canada and the investment bank Jefferies.

Canadian asset management firm Brookfield is planning to sell the entire building, which was completed in 2019, according to The Sunday Telegraph.

A new owner is being sought at a time when major City employers such as  Capita, HSBC, Lloyds and Sainsbury’s have all announced plans to downsize or close some of their London offices as more staff choose more flexible working patterns.

This is being repeated across the UK, with Edinburgh-based Standard Life Aberdeen among those saying they do not expect to see their offices fully occupied.

The amount of vacant office space in London soared 75% year on year to a nine-year high last month, according to a report by the property advisory firm Colliers. It is expecting London vacancies to peak this year at 10%, a level not seen since the 2008 financial crisis triggered the last major recession.

However, office exits have slowed in the past two months, hinting at a steady return of workers to commercial premises.

Colliers forecasts a pickup in demand as lockdown-weary employees are lured back to the office by assurances on safety measures.

Goldman Sachs chief executive, David Solomon, said he expects employees to return to their office desks.

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