MORNING NEWS: Fitch forecasts Canary Wharf vacancy rise

Good morning. Here’s your daily round-up of the latest news and views from EG and a collection of industry-relevant headlines from the national papers. Rating agency Fitch has said Morgan Stanley’s decision to stay put at Canary Wharf has “alleviated some downside risk” for landlord Canary Wharf Group, but vacancies are still predicted to grow. Analysts pointed to challenges that “remain from wider market conditions”. Vacancy rates in Canary Wharf generally have climbed to around 15%, according to Fitch’s note, while yields rose by 150bps over 2023. “Given that other large occupiers have announced their exits from the estate, we anticipate vacancy will continue to grow over the medium term, which will likely constrain rental growth,” said analysts. Grosvenor has teed up a trio of sites in London’s Victoria and Belgravia to convert into flexible offices, as it readies a push to build a 300,000 sq ft portfolio in that part of its business. Head of flex offices Piers Townley told EG that the firm has lined up around 25,000 sq ft of flexible workspace openings in the short term, including 10,000 sq ft at 146 Buckingham Palace Road, SW1. And Prologis’ European arm has posted a rise in rents, although its pace has slowed on the same period in the previous year. Ben Bannatyne, president of the Europe business, said demand stayed steady, with Germany and the Netherlands credited as its top performers geographically. Rents grew by 20.5% during the first quarter, compared with a 26.5% rise in Q1 last year. Leasing activity across its portfolio totalled nearly 11.6m sq ft in Q1 this year, up from 11.1m sq ft in the same quarter in 2023. Within that, the proportion of new leases fell but renewals grew. All of the news from EG, plus a selection of headlines from the nationals:Watkin Jones names new chief financial officerGrosvenor picks next London sites for flex office pushTaylor Wimpey hails period of ‘market stability’Regal £153m Wembley PBSA gets go-aheadFitch predicts Canary Wharf vacancy rise despite Morgan Stanley dealPrologis Europe rental growth slowsAdvisers appointed for Sunderland leisure plansGary Neville’s Relentless signs office operator for Manchester schemePGIM appoints Wise Living to 918-home SFH portfolioSalford’s Trinity Bridge House sold at half previous asking priceChancerygate seals five deals at Genesis ParkVoice of the Region: West Yorkshire – the unstoppable deal machineICG taps Goldman for real estate hireNational deals round-upCan long-term mortgages help solve the UK’s housing crisis? (£)Asda finance chief dismisses talk of sale amid ownership shake-up (£)COMMENT Dear next government, this is what the real estate sector needs to solve the housing crisisHomeowner pain as major banks hike mortgage ratesWorld’s biggest floating offshore wind farm gets go-ahead