Firms Are Betting That Europe’s Offices Have a Long Future Ahead
(Bloomberg) - Companies are betting on the long-term future of European offices as vaccine rollout draws workers back downtown.
AXA IM Alts, part of AXA Investment Managers, has raised around 800 million euros from investors in Asia, the US and Europe to develop offices and apartments, according to a statement on Thursday. The asset manager will seek flexible offices in the UK, France and Germany as companies adjust their working practices after the pandemic.
"While the office space has been characterized by uncertainty about future user needs, it will continue to be an essential opportunity for businesses to attract talent and we anticipate increased demand for CBD locations," said Ian Chappell, Head of Development and Value Funds at AXA IM Alts.
British Land Co. announced Thursday that it had leased nearly a third of a major redevelopment in the city of London four years ahead of its scheduled completion, further boosting the capital's office market.
Real estate agent Jones Lang LaSalle Inc. has agreed to use 12,450 square feet of space on 1 Broadgate in the heart of the financial district. The building, when expected to be completed in 2025, will house JLL's flagship in Chicago.
The deals contrast with fears that companies and their employees will choose to spend less time in the office, even as lockdown restrictions ease across the continent. Many companies vow to reduce their real estate footprint. Still, offices topped the list of destinations for more than a third of property investors surveyed by CBRE Group Inc. last month, with London being the most popular destination for those looking to Europe.
"1 Broadgate will be central to our plan as we recognize the importance offices play in collaboration, innovation and promoting culture and wellbeing," said Stephanie Hyde, director of JLL in the UK and Ireland, in the statement .
Bloomberg reported last month that British Land was also in talks with the law firm Allen & Overy about renting office space at 1 Broadgate, according to those familiar with the negotiations. This would be the largest office lease signed in London since the pandemic began.
AXA's bet on flexible office space comes from financial firms like Grant Thornton UK LLP finding from surveys that the vast majority of their employees want to spend more than half of their time working remotely. The competitor PricewaterhouseCoopers is giving its employees Friday-summer afternoons off this year.
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