London Office Market Faces 'Rental Recession' as Vacancies Soar

London's office market is experiencing a "rental recession" as vacancies in the city's business hub reach a 30-year high. The shift towards remote and hybrid working, as well as a focus on green offices, has led to a 20% contraction in office usage. The level of vacancies is surpassing the tipping point where rents typically start to decline, except for sustainability-focused buildings. Flexible, co-working, and serviced offices have taken up some of the vacant spaces. Commercial real estate companies British Land Company and Great Portland Estates have been downgraded by Jeffries, while Morgan Stanley sees UK real estate investment trusts as a compelling opportunity.