Hammerson warned that job losses in the City of London were having an impact on demand for offices in the financial district. Financial Times, The Times, Daily Telegraph
Hammerson blamed banks reducing staff numbers at a time when development completions were increasing the supply of new space.
This, it said, had caused rents to soften. There had also been a weakness in demand for offices in the business district in Paris. The shares dipped 13p to 995p.
The company has completed two lettings at its office building at 125 Old Broad Street in the past quarter, one to real estate adviser DTZ at just £53.50 a square foot, which is seen as a low rent in the sector.
Property agents have warned that there are further falls to come in City rents. Last week, CB Richard Ellis said that rents on top quality office space could fall to £52 a square foot by next year, which could have a knock-on effect on property prices.
There was one piece of good news yesterday, however, after South African bank Standard Bank confirmed plans to relocate to Hermes Real Estate and City Offices’ 20 Gresham Street development in the City of London. It is expected to pay more than £57 a square foot.