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Commercial real estate stocks fell in Europe on Thursday, following sharp declines on Wall Street, as the sector became the latest to be swept up in a sell-off prompted by fears over AI disruption.
Shares in Savills fell 7 per cent in early afternoon trading in London, while UK peers IWG dropped 4.4 per cent and British Land was down 2.7 per cent.
The moves in Europe followed sharper declines among US real estate companies on Wednesday. Cushman & Wakefield lost 14 per cent, while CBRE and Jones Lang LaSalle each fell 12 per cent.
The declines came after similar sell-offs for sectors regarded as potential losers from the rapid advances in artificial intelligence, with shares in wealth managers, software, data and analytics stocks all hit over the past week.
AI’s potential to replace a range of tasks in so-called knowledge sectors and lead to swaths of job cuts has also sparked concern among investors in property groups that demand for offices could fall.
Shares in US-listed commercial real estate were set to stabilise on Thursday, and pre-market trading pointed to a rise in CBRE’s shares of 2 per cent when New York opens, while JLL’s and Cushman’s were set to open flat.
The sell-off among US names came despite analysts’ positive outlook for the industry’s shares this year, with Jefferies in December citing the sector’s “outsourcing momentum, growth in digital infrastructure within services, and expectations for another strong year in capital markets”.
CBRE on Thursday also reported its highest-ever quarterly revenue and earnings figures.
The company was bullish, reporting a rise in revenues of 12 per cent to $11.6bn in the three months to the end of December and an 18 per cent increase in core earnings per share to $2.73 versus analyst consensus of $2.68.
“Our strength was broad based,” said Bob Sulentic, CBRE’s chair and chief executive. “We saw significant gains in sales and leasing in the US and much of the rest of the world and our resilient businesses continued to post double-digit revenue growth, a trend we see continuing.”
