After China's, it's London's real estate that's worrying investors

The FTSE 100 struggled yesterday due to ongoing worries over, higher-for-longer interest rates, high yields and China’s property sector. US consumer confidence came in lower than expected, fuelling recession fears. The FTSE 100 closed flat yesterday and remained flat this morning.

Real estate shares took a hit after Jefferies analysts said in a report that London's office market is in 'rental recession'. “Retail was technology's first casualty and we think offices are next. Utilisation has shrunk and landlords are losing pricing power as tenants offload surplus space. London vacancies are at a 30-year high and above the tipping point at which rents fall”.

And just as Jefferies note came in, press reports today revealed that Meta has paid £149mn to break its lease on a London development owned by British Land.

Overall sentiment is also dented by the return of worries about further rate hikes in the United States.

Among stocks, auto retailer Pendragon shares soared 11.1% after it said it received a takeover offer from AutoNation for about 447 million pounds.

Things to read today:

Meta pays £149mn to break London office lease (Financial Times)

China Puts Evergrande’s Billionaire Founder Under Police Control (Bloomberg)

America Is Desperate for a New Beginning (WSJ)