The US labour market showed signs of a steady slowdown in October, with job openings increasing moderately and layoffs declining, according to the latest Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics on Tuesday. Job openings, a key indicator of labour demand, rose by 372,000 to 7.744 million at the end of October. However, the September figures were revised downward to 7.372 million from the initially reported 7.443 million. Economists polled by Reuters had anticipated 7.475 million vacancies. Labour Market Dynamics While job openings increased, hires dropped by 269,000 to 5.313 million, and layoffs fell by 169,000 to 1.633 million. These figures suggest a gradual cooling of the labour market rather than a sharp contraction. Hurricanes and strikes also impacted October’s labour market data. Rebuilding efforts in storm-affected regions and the resolution of strikes at Boeing and another aerospace company are expected to contribute to a ...
The cost of upgrading Europe’s aging office buildings to meet zero-carbon targets is soaring, creating a risky environment for property owners as property values decline. With 80% of Europe’s office market being over 10 years old, much of the real estate is outdated and requires significant improvements to meet emissions goals.
In London and Paris, the cost to modernize buildings could exceed $77 billion, with annual capital expenditure set to rise by nearly 30%, according to a report by AEW. This is compounded by a 9% drop in property values over the past year, further squeezing the return on investment.
The pressure is intensifying as demand concentrates on buildings with green credentials, leaving older, less energy-efficient properties at risk of becoming stranded assets. For example, 5 Churchill Place in Canary Wharf, which was purchased for £270 million in 2017, only attracted bids of £110 million recently due to the high costs of upgrading the building and concerns over future office demand.
Europe is also lagging in meeting the energy intensity targets set by the Paris Agreement, adding to the financial burden. The need to install energy-saving technologies like heat pumps has further increased operational costs.
However, AEW forecasts annual returns of 8.8% across prime European commercial real estate by 2028, driven by future interest rate cuts and rising rents. This suggests there is potential for absorbing the higher upgrade costs. Still, developers are pausing projects due to rising rates and economic uncertainty, creating a supply squeeze for top-tier green buildings, which are increasingly sought after for their ability to help meet carbon reduction goals.
In prestigious areas like Mayfair and St. James’s, vacancy rates are below 3%, driving up rents for the best buildings, while areas like Canary Wharf and Hammersmith have vacancy rates of 15.7% and 19.9%, respectively.
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