Property investor LaSalle says 30% of European office space may be 'obsolete' (updated)

Jones Lang LaSalle Incorporated

12/03/2024 15:15

(Adds details on La Salle targets in paragraph 5)
    By Iain Withers
       CANNES, France, March 12 (Reuters) - LaSalle Investment
Management is reducing its exposure to offices in Europe and
believes between 20% and 30% of office space in the region could
be "obsolete", the firm's head of Europe said on Tuesday.
    "Is there redundant space in areas where it shouldn't have
been in the first place? I think maybe 20 to 30% of office stock
is probably obsolete," Philip La Pierre, head of Europe at
LaSalle, told Reuters at the MIPIM real estate conference in
Cannes.
    La Pierre said the commercial real estate market remained
"fickle", although there were signs that investors were slowing
redemption requests and becoming used to lower prices.
    "Everyone has to accept the fact that pricing is down 30 to
40% and they might want to liquidate their position ... Now
they're willing to do it. But it takes a year or two
psychologically to adapt to the fact that you're making a loss,"
he said.
    Despite the tough conditions, LaSalle is targeting growing
its overall property acquisitions in Europe to $2 billion in
2024, up from $1.8 billion last year, and sees growth
opportunities in real estate debt, La Pierre said.
    LaSalle is an independent part of global property services
firm Jones Lang LaSalle  JLL.N .

 (Writing by Tommy Reggiori Wilkes; Editing by Sinead Cruise and
Alison Williams)
 ((thomas.wilkes@tr.com; +44 (0) 7769 955711;))