Despite a general aversion to office investment, the tenants that typically lease office space are holding up well according to our latest T200 reports. Our T200 series quantifies the default risk across the top 200 standard industry classifications (SICs) for the UK, Western Europe and North America.
In all regions office occupiers score above average and have recorded stable scores over the last 12 months or longer. In North America, where the “death of the office” is a common refrain, occupiers in this sector record the second highest score of 84/100.
Of course, stable occupier credit fundamentals do not necessarily translate to increased demand for office space, but it is a concern to take off the table when looking for risks in the sector.
In Western Europe and North America the leisure and hospitality sector tenants are showing signs of improvement, although in the UK these tenants are sliding backwards after a post-pandemic boost. Perhaps the continued cost of living crisis is hitting discretionary spend and impacting this sector; or the ending of post-pandemic life-support programmes is now seeing weaker businesses fail. Similarly, average retail occupier scores have fallen in the UK, while holding up in Europe and North America.
