RBC warns on London office rents and impact of Brexit on REITs

London offices skyline

Source: Wikimedia Commons/Colin and Kim Hansen

Royal Bank of Canada (RBC) has issued a Brexit warning to the London office market, predicting rents will fall 16-18% in the next five years.

The bank, which has also initiated coverage on the UK’s top real estate investment trusts (REITs), believes UK rents are close to their highs, while property yields and interest rates are at their lows. RBC believes these factors would ordinarily lead to an unattractive growth outlook, but added to macro-economic issues such as Brexit could trigger a “significant pause in tenant demand”.

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