Sale of 100 Bishopsgate to serve as acid test for whether remote working will continue after Covid pandemic
A London skyscraper is poised to become the UK’s most expensive office block after being put up for sale for £1.8bn, in an acid test for whether the move to remote working during the coronavirus pandemic is expected to last.
The deal for the 37-storey 100 Bishopsgate building in the heart of the financial district, which is home to the law firm Freshfields, the Royal Bank of Canada and the investment bank Jefferies, is expected to surpass the £1.3bn paid for the nearby Walkie Talkie building in 2017 despite an exodus from the City in the past year.
The Canadian asset management firm Brookfield is planning to sell the entire building, which was completed in 2019, the Sunday Telegraph reported. Far Eastern investors, who have been active in London throughout the pandemic, are thought to be the most likely buyers.
The sale comes despite a shift towards working from home during the pandemic. Major companies including 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.
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, it found that the pace of office exits had unexpectedly slowed in February and March in a signal that demand for working in usually busy urban centres would potentially return after lockdown.
Colliers forecasts a pickup in demand later this year as some occupiers aim to increase their office footprints to make coming into the workplace more attractive for lockdown-weary employees, and to give staff more space for social distancing.
Some bosses, including the Goldman Sachs chief executive, David Solomon, have said they expect the trend will not be sustained as many businesses require face-to-face contact to foster innovation and collaboration, and to train and guide the next generation.