Britain's commercial property market is returning to life after its post-pandemic freeze, albeit largely at much lower prices.

Some big-ticket office properties now on sale will show just where the market is likely to bottom out and how briskly UK deal volumes will recover - especially in the hard-hit office market. How that plays out could in turn signal what awaits other countries still gripped by a deeper downturn.

Real estate investor Nuveen has put a 21-storey City of London tower it completed in 2019, informally known as the "Can of Ham" due to its rounded shape, up for sale for 322 million pounds ($419 million), below about 400 million pounds it had sought in 2022, a person familiar with the matter said.

Canada's Brookfield is seeking around 500 million pounds for its nearby Citypoint tower, according to industry data provider CoStar. That compares with its most recent formal valuation of 670 million pounds, and its 560 million price tag when last sold in 2016, according to CoStar.

New office buildings are seeing robust demand, with investor M&G's new office towers at 40 Leadenhall in the City of London more than 80% let.

But a recent tour showed what it needed to do to attract tenants, with the building offering saunas, treatment rooms, a hair salon, a yoga room, Peloton fitness suite, a cinema room and a library - most for the exclusive use of office tenants.

"We had a conviction that tenants would want to upgrade their space," said Martin Towns, deputy global head of M&G Real Estate. Some out-of-favour older offices would have to be converted into other uses like housing, or demolished, he said.

The COVID-19 pandemic pummelled global commercial property markets by driving up inflation and financing costs, while causing a shift to hybrid and remote work that meant most tenants wanted less, but higher quality office space.

The cost of building prime offices in London has risen to more than 500 pounds per square foot now from less than 400 pounds before the pandemic, construction consultancy Turner & Townsend alinea said. Half of that increase was down to inflation, with the rest down to better amenities and green credentials, it said.

While some properties, such as older out-of-town offices, remain near-impossible to sell, the British market is improving for prime offices, rental housing and logistics, investors said.

A global retreat in inflation and interest rates is starting to ease financing costs and improve properties' appeal relative to other investments.

"The mood music has definitely changed in the UK," said James Seppala, head of real estate for Europe at Blackstone, the world's largest commercial property investor.

"There is more robust activity, and more participants are coming off the sidelines."

OFFICES LAG RECOVERY

Deal volumes across UK commercial property - which spans offices, retail, logistics and rental housing - have rebounded 26% annually in the second quarter, according to MSCI data, compared to 45% and 22% declines in France and Germany, respectively.

After plummeting in 2022 and 2023, UK commercial prices are also expected to rise 2% this year, even as they continue to fall in the euro zone and the United States, and to outperform other Western markets over the next four years, Capital Economics said.

But office sale volumes are still down 21% so far this year, MSCI said, lagging the rest of the UK market. There were also no deals over 100 million pounds in the first half of this year, the first such six-month period since 1999, according to CoStar.

Overall office vacancy rates also keep rising, hitting 10.1% in London in the third quarter - the highest for more than 20 years, CoStar said. It is nearly 17% in the city's eastern Docklands area, where Canary Wharf Group is considering converting some empty space into hotels.

FORCED SALES

Property investors and agents say would-be sellers are coming round to accepting today's lower prices. Some may be forced to sell by high refinancing costs, according to bankers, but foreign buyers could be willing to swoop.

"Many investors are saying the UK is a good investment location because of the stable political situation and they are wanting to get in before prices start to rise," said Fiona Voon, head of real estate capital markets UK at BNP Paribas.

Among domestic investors, Schroders plans to spend hundreds of millions of pounds on British commercial properties this year and next, likely including prime offices. The market was attracting increased interest from investors in the Middle East, Asia and Australia, the asset manager said. It said it would soon begin talking to potential tenants about pre-letting its own planned 63-storey City tower at 55 Bishopsgate.

"Offices to some extent has been a bit of a dirty word," said Nick Montgomery, global head of real estate at Schroders. "From the position we're in, it's more of an opportunity than a risk... The pendulum always tends to swing too far."

Source: The edge markets

A starkly critical report of European Union economic policy was issued by former European Central Bank President Mario Draghi in early September, entitled “The Future of European Competitiveness.” The report warns that the bloc is facing long-term declining economic growth that threatens Europe’s prosperity, independence and social welfare.

To address the EU’s vulnerabilities, the near 400-page document proposes cutting geopolitical dependencies by securing supply chains and closing its innovation gap with the United States and China. From a policy standpoint, these objectives would be achieved through a mix of sectoral reforms, including development of the energy, artificial intelligence, transport and pharmaceutical industries. Mr. Draghi also suggests horizontal measures to boost innovation, skills and governance.

Large-scale investment key to achieving growth

The report is no less forthright about the unprecedented financial outlays needed to achieve the desired productivity and growth ambitions. Mr. Draghi asserts that Brussels needs to make additional combined public and private investments of 750-800 billion euros each year – equivalent to 5 percent of the bloc’s current gross domestic product (GDP). Such a rise in EU investment would, proportionately speaking, put it at levels not seen since the late-1960s and early-1970s.

Mr. Draghi also promotes new policies on slashing bureaucracy and championing lighter regulation. Accordingly, the report proposes reforming competition law by harnessing more of the benefits from the innovation aspects of mergers. New competition rules would also allow market consolidation in sectors such as telecoms and information technology. Meanwhile, efficiencies in capital markets vital for funding a large part of the bloc’s necessary investments would be achieved through the Capital Markets Union by facilitating the centralization of market supervision at the EU level.

In his remarks to the media during the unveiling of his report, Mr. Draghi warned, “The reasons for a unified response have never been so compelling – and in our unity we will find the strength to reform. … Do this, or it’s a slow agony.”

EU Commission refocusing on competitiveness

In her comments on Mr. Draghi’s report, European Commission President Ursula von der Leyen reiterated the importance of competitiveness, stating, “First, to be competitive, we need to master the clean and digital transition … we need to act on all the principal levers that are at our disposal … mobilizing public and private investment, improving the business environment and cutting unnecessary red tape.”

Ms. von der Leyen also highlighted this focus on competitiveness in her own report, “Europe’s Choice,” published in July. In this report, she pledged that the main priority of her new upcoming five-year term following her reelection in July will be boosting domestic competitiveness. She also advocated for making business “easier and faster in Europe.”

To implement these goals, newly appointed EU commissioners will be tasked with reducing administrative burdens and simplifying business-related rules. These would include less red tape and reporting, improved enforcement and faster permitting. “The whole college [Commission] is committed to competitiveness,” she said.

The new commissioners will hold regular dialogues on policy implementation with businesses. They will also work with a newly created EU representative for Implementation and Simplification to stress-test the entire scope of EU legislation on how it conforms to the interests of business.

Future regulations are to be simplified and designed with small businesses in mind. This will be done through a new small- and medium-sized enterprise and competitiveness check to help avoid unnecessary administrative burdens.

According to President von der Leyen, better lawmaking will have to be a joint task between all institutions involved and all legislative processes covered – from proposal to amendments to adoption. “In this spirit I will propose to renew interinstitutional agreement on simplification and better lawmaking so that each institution assesses the impact and cost of its amendments in the same way.”

A starting point for this envisaged collaborative, interinstitutional legislative approach may be to consider reforming key pieces of legislation widely slammed for stifling competitiveness.

Burdening companies with administrative obligations

The Corporate Sustainability Due Diligence Directive (CSDDD) was formally adopted in July 2024, and its provisions will come into force in graduated steps over several years. The directive introduces mandatory human rights and environmental due diligence requirements for large companies operating within the EU, both EU- and non-EU-based.

Obligations under the directive will apply in addition to other more specific, or potentially stricter, due diligence obligations under other EU laws. These include regulations on conflict minerals, batteries, deforestation and a forthcoming law on forced labor.

The EU has increasingly come under pressure from member states, trade associations and major European political parties to “halt and review” the application of the directive’s rules. The main criticism of the law stems from its imposition of an excessive administrative burden on businesses. A risk is that member states could transpose the obligations into national law without transparency and without being clear or understandable for businesses.

Companies hindered by sustainability laws

Onerous environmental legislation also incurs a heavy cost for business and is an area where Mr. Draghi sees room for streamlining. For instance, the framework to facilitate sustainable investment regulation (Taxonomy Regulation), which came into force in January 2022, establishes a classification system providing businesses with a common language to identify whether a given economic activity should be considered “environmentally sustainable.”

Companies applying the Taxonomy Regulation are facing additional costs and resources associated with new reporting requirements. This applies to collating and reporting a new information category, such as sustainability data, which played none or only a subordinate role in previous reporting. From the perspective of these companies, this work and expense requires greater investment.

Companies are also worried about the Carbon Border Adjustment Mechanism (CBAM), which forms part of the EU’s green deal package. This is a collection of initiatives aiming to secure the bloc’s goal of a 55 percent reduction in carbon emissions (compared to 1990 levels) by 2030.

CBAM will apply to financial charges on imported goods from January 1, 2026. The reporting will involve calculating an EU importer’s total imported goods and associated embedded emissions. This calculation would form the basis of purchasing CBAM certificates, minus any carbon price already paid abroad.

European industries have been largely skeptical of CBAM, voicing concerns over negative impacts on investment prospects for the sectors affected, as well as the efficacy of its implementation.

New digital laws hamper EU tech competitiveness

The EU’s Artificial Intelligence (AI) Act came into force in August 2024 and is the first such comprehensive regulation in any global jurisdiction. The law assigns risk categories to providers of AI systems. This involves companies that develop AI with a view to placing it on the EU market under their own name or trademark, whether for payment or free of charge.

Given the law was enacted recently, it is widely anticipated that its application will entail new expenses, particularly during the initial phase of implementation. Satisfying its requirements will also likely increase administrative burdens, resulting in delays for the launch of new AI products.

Another new set of laws regulating the digital realm is the Digital Services Act (DSA), which restricts the activities of digital services providers within the EU. Alongside the Digital Markets Act, the DSA is part of a comprehensive European digital strategy imposing far-reaching obligations on providers of very large online platforms (VLOPs) and very large online search engines (VLOSEs).

The DSA became mostly applicable by February 2024. Critical voices have expressed concerns regarding the DSA’s extensive and complex rules creating unnecessary bureaucracy for digital businesses and stifling innovation.

Source: GIS

About Brazil Potash and the Autazes Project

Financial Overview and Market Demand

Environmental and Economic Impact

Potential Risks and Challenges

Conclusion

Company Background

Therapeutic Focus and Product Pipeline

Market and Financials

IPO Details and Market Impact

Conclusion

Defining Arbitrage: The Basics

How Does Arbitrage Work?

Types of Arbitrage Strategies

The Role of Technology in Arbitrage Trading

Risks and Limitations of Arbitrage

Real-World Examples of Arbitrage

Is Arbitrage Still Profitable?

Conclusion