Office splits into winners and losers as market narrows

The day before this panel convened at the Rueckerconsult INVESTMENT Expo in Berlin last week, KanAm Grund signed a lease in the City of London at nearly £110 per square foot. Anthony Bull-Diamond, KanAm's chief executive, mentioned it almost in passing — as live confirmation of a rental trajectory that Philip La Pierre of LaSalle Investment Management had just outlined, with City rents breaking through the £75-to-£100 range. The room took note. In a market where office has spent four years being written off, one of Germany's most respected real estate investment houses had just put its name to a lease at a level that would have seemed implausible not long ago.

That set the tone for a discussion that proved considerably more bullish on office than the prevailing narrative — but bullish in a precisely defined way. What emerges is not a uniform recovery, but a market that has split into investable and effectively uninvestable segments.