Investors in the FTSE 100 company have become jittery since it emerged that a number of major occupiers were downsizing their occupancy requirements in Docklands leading to speculation that as much as 1m sq ft of offices could become vacant. The shares fell 30% in a week as the scale of the downsizing took the market by surprise.
To make matters worse, there has been drip feed of announcements from major tenants including Clifford Chance which has already given back more than 10% of its new 1m sf Docklands offices. Barclays Bank and Lehman Brothers also have agreements that would allow them hand back space. Tenants who have exercised put options include publisher McGraw-Hill and asset manager Northern Trust.
But more sober analysts in the City argue that the options are a reflection of the current state of the market and do not present an accurate picture of the company's fundamentals.
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