Rising Rates and Regulations Pressure Commercial Property Market
• Interest rates have risen sharply, making commercial property financing more expensive and sending values tumbling • New sustainability regulations require offices to meet minimum energy efficiency ratings, forcing costly upgrades • Hybrid working trends have companies downsizing offices, with more space becoming redundant • Many buildings may be sold at a loss or sit vacant rather than fund needed green upgrades • Financial distress will likely force more property sales in 2024, further depressing values