CBRE UK CEO Talks UK Property, Credit, Stability

Summary

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Bloomberg Talks: CBRE UK CEO Rishi Bucha on Property, Credit, and Stability

Date: May 19, 2026
Host: Bloomberg (Caroline, Lizzie)
Guest: Rishi Bucha, CEO of CBRE UK

Episode Overview

This episode features an in-depth interview with Rishi Bucha, CEO of CBRE UK, focusing on the state of UK property markets amid rising bond yields, instability in government, and the ongoing infrastructure buildout. The discussion highlights trends in real estate investment, the surge in data center demand, challenges with UK planning and utilities, political uncertainties, and the implications of new policies like rent control.

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Key Discussion Points & Insights

1. Shifting Real Estate Investment Trends

• Alternative Asset Classes Gaining Momentum:
  • Real estate investors are moving toward sectors like healthcare, data centers, and "living" (student accommodation, flats, single-family homes).
  • Traditional infrastructure investors (tolls, bridges) are increasingly purchasing real estate assets with infrastructure-like qualities (high barriers to entry, long inflation-linked leases).
• Resilience Despite Rising Bond Yields:
  • Despite spikes in gilt yields and modest price reductions, demand for real estate and related assets remains robust.
  • Infrastructure investors, less reliant on leverage, are often able to pay more, leading to continued transaction activity.

"We're seeing a very interesting trend at the moment where real estate investors invest in alternative asset classes... At the same time we're seeing more traditional infrastructure investors... investing in real estate which have infrastructure-like characteristics."
— Rishi Bucha [01:20]

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2. The Data Center Boom vs. Office Space

• Booming Data Center Demand:
  • London is the epicenter, accounting for 30% of pan-European data center capacity and the majority nationally.
  • There is significant and growing demand, not at the expense of office space.
• Office Leases Remain Stable:
  • Contrary to fears over AI replacing workers, demand for office leases is not shrinking—AI-focused companies are projected to take significant space in future years.
  • Lease durations for major (non-AI) corporates remain unchanged from a decade ago.

"We are expecting AI focused companies to take up to 4 million square foot of new office space here in London by 2033... We're not seeing any shortage in demand at all."
— Rishi Bucha [02:48]

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3. Challenges in Data Center Construction

• Severe Power and Planning Constraints:
  • Building a data center in West London could take up to 10 years—2 years for planning, 2 years for construction, and up to 6 years to secure power.
  • Factors like supply chain frictions, material costs, and utility delays are significant barriers.

"West London right now will probably take you 10 years to build a data center... up to six years to get power."
— Rishi Bucha [04:29]

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4. Political Uncertainty and Investment Stability

• Long-term Commitment of Real Estate:
  • Investors tend to look past short-term political volatility, focusing instead on stability, certainty, and predictability.
  • Interest rates are a more significant concern than political fluctuations for real estate buyers, who operate with higher leverage.

"People do look through short term political volatility. The bigger issue was going to be interest rates... What they do need is certainty, stability and predictability which is a bit of a challenge right now within the UK."
— Rishi Bucha [05:11]

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5. Global Capital Flows & London’s Enduring Appeal

• Domestic and International Interest:
  • Mansion House Accord is increasing domestic pension fund investment in UK private markets.
  • Substantial foreign capital—especially from Japan, the US, and Australia—is targeting the UK for its legal framework, universities, tech sector, stable currency, and time zone.

"We've seen a huge increase in the amount of overseas capital looking at the UK... London is one of a handful of places that is still viewed as very attractive with stability in the long term."
— Rishi Bucha [07:07]

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6. Policy Risks: Rent Control and Industry Renationalization

• Rent Control Could Disrupt Investment:
  • Recent policy proposals (e.g., Renters Right Act) are creating a more institutional landlord market as private landlords exit due to complexity and unprofitability.
  • More institutionally managed rental stock could benefit tenants in the long run, but heavy-handed rent control would "spook investors."

"We've seen a huge, huge uptick in the amount of institutions looking for living. And actually if you end up with more institutional landlords, arguably that's better for the tenants renting the space."
— Rishi Bucha [09:20]

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7. On Government Change & Future Policy

• Market Favors Stability Over Political Leanings:
  • Investors are less concerned with the political identity of the Prime Minister and more with the predictability of the investment environment.
  • Some “stability” may return after a transition, which is more valuable than any particular policy stance.

"From a real estate investor perspective, they're very comfortable investing at higher rates of interest rates... The issue is just having some stability back."
— Rishi Bucha [08:25]

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Notable Quotes

• "I'm not an AI specialist but you know, the earnings forecast for some of these big datacenter businesses is enormous. But I can tell you right now, the fact that everybody's talking about it, the fact that everybody's worried about it means that people are aware of it and hopefully taking account of it in their underwriting."
  — Rishi Bucha [06:05]

• "It's really easy to forget these things sat here with the day to day minutiae of the doodle and gloom. But when you...travel around the world...London is...still viewed as very attractive with stability in the long term."
  — Rishi Bucha [07:07]

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Key Timestamps

• 01:20 — Investments shifting to alternatives (healthcare/data centers/living)
• 02:48 — Data center and office demand in London
• 04:29 — Data center build time (planning, power, constraints)
• 05:11 — Political instability vs. investment certainty
• 06:05 — AI/hyperscaler capex and the risk of a bubble
• 07:07 — Influx of domestic and overseas investment; London's competitive edges
• 08:25 — Impact of a potential change in Prime Minister
• 09:20 — Effects of increased regulation and rent controls

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Memorable Moments

• Surprising Resilience: Rishi notes that, despite political and economic headwinds, real estate investment remains strong due to the enduring global appeal of London's ecosystem.
• Data Center Paradox: London leads Europe in data center demand, but faces profound challenges when it comes to actually building new capacity due to planning and utility constraints.
• Institutionalization of Rentals: Government regulation and tax policy are driving smaller landlords out and institutional capital in—potentially to the benefit of renters.

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Overall Tone

The conversation is straightforward, realistic, and optimistic—Rishi Bucha frequently acknowledges the sector's challenges but retains confidence in the long-term stability and attractiveness of UK property, urging listeners not to lose sight of its global competitive strengths.

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Transcript

[Indiana University Announcer]

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[Bloomberg Radio Host]

Bloomberg Audio Studios Podcasts Radio News Right, we're going

[Caroline (Interviewer)]

to pivot to something a little bit different. So the UK we know heavily reliant private sector for development of UK infrastructure. For the property firm cbre it means opportunities in investments, for health care, for accommodation and for the much talked about data center build out. But this with the backdrop of global bond yields rising, particularly UK gilt yields, they spiked on Friday. Does that dent the sector? Really pleased to say that we have CBRE UK CEO Rishi Bucha with us. Good morning. Really great to see you, thanks for coming over. You spoke to my colleagues on tv so I'm really glad that I've got you on radio as well. You released a report about the rise of interest, infrastructure capital, how important it is. Where is the fastest growing sector in amongst this infrastructure build out? Are your clients making active investment decisions now for the UK and Ireland?

[Rishi Bucha (CBRE UK CEO)]

So a couple of comments Caroline. Firstly, we're seeing a very interesting trend at the moment where we are seeing real estate investors invest in alternative asset classes, health care data centers which I'm sure will come in and talk about and living which is broadly student accommodation, flats and single family homes. And at the same time we're seeing more traditional infrastructure investors, those that would have invested in tolls, bridges, motorways, investing in real estate which have infrastructure like characteristics. So those assets have got high barriers to entry, long leases in today's environment, inflation linked leases. And the reason that's interesting is with and I heard you talk about gilt prices earlier, in infrastructure investors typically have lower leverage or no leverage versus a typical real estate investor which means they should be able to pay more. So going back to your question, we are absolutely still seeing lots and lots of real estate transactions closing. I think we're day 80 of the war today. What we have seen unsurprisingly is a modest price reduction for those deals that we're getting close to getting done. But we're seeing no shortage of demand demand right now for real estate and real estate adjacent assets.

[Lizzie (Co-Host or Interviewer)]

Rishi, good morning. I wonder where you're seeing more demand for data centers. Does that mean you're seeing less demand for offices as workers are replaced by AI?

[Rishi Bucha (CBRE UK CEO)]

Morning Lizzie. So I'll make a couple of points. You know the first one is everybody's talking about AI. And worried about what could go wrong. The way I like to think about it is what could actually go right. So in London right now, we're seeing a huge number of AI tech engineers being hired. That's great for employment. Second point, we are expecting AI focused companies to take up to 4 million square foot of new office space here in London by 2033. We saw anthropic take 150,000 square foot recently. Third point is on a global basis for corporate occupiers, non AI companies, but they employ a lot of people. We haven't seen them sign leases are any shorter than they were a decade ago. And the reason that's important, if they thought they were going to have fewer people or they were more uncertain about the environment, you would typically expect them to sign shorter leases. So we're not seeing that. And then the point around demand for data centers versus offices, in part, you've got different buyers, so you're not cannibalizing one another. But where you do have real estate buyers, we're seeing a huge demand for data centers. If you just take London right now on a pan European scale, London accounts for about 30% of datacenter live capacity. It's about 80% nationally. It is by far and away the largest city in Europe out of the big five. Big five being Paris, London, Amsterdam, Dublin. And so we're not seeing any shortage in demand at all.

[Caroline (Interviewer)]

Okay, this was in demand. How quickly can you really build a data center in Britain given the power and water constraints?

[Rishi Bucha (CBRE UK CEO)]

So that is the absolute right question to ask. So West London right now will probably take you 10 years to build a data center. That's two years to get planning, albeit the government has designated datacenters critical infrastructure. So maybe it's a bit quicker, two years to build. But right now with supply friction. Yeah, that's also hard. Availability of materials and cost. And then the big point that you were saying, Caroline, up to six years to get power.

[Caroline (Interviewer)]

Yeah. So surely that timeline, you have to add a number of years to that because of government fragility, the change of leadership. Are your clients, you know, are they delaying any plans because of the fragility of the government?

[Rishi Bucha (CBRE UK CEO)]

Now look, we've, we've to a certain degree since 2020 had some level of uncertainty every year, some more than others. Real estate's clearly a longer term commitment. So people do look through short term political volatility. The bigger issue was going to be interest rates. You know, real estate buyers are typically higher levered, so the higher the gilt yields go the more expensive real estate becomes. But real estate investors generally can invest in any environment. What they do need is certainty, stability and predictability which is a bit of a challenge right now within the uk. You know, things will get resolved. It's a long term commitment. We don't expect in the short term, sorry in the longer term that to really influence the amount of real estate investment there is in this country.

[Lizzie (Co-Host or Interviewer)]

But what if the bubble bursts and you get hyperscaler capex cycle cycles slowing down?

[Rishi Bucha (CBRE UK CEO)]

Rishi so it's, it's a question that everybody's asking the amount of Capex that's being spent and why does that matter for real estate? It matters because you've got an awful lot of real estate debt being lent against this capex. Look, I'm not a, an AI specialist but you know, the earnings forecast for some of these big datacenter businesses is enormous. But I can tell you right now, the fact that everybody's talking about it, the fact that everybody's worried about it means that people are aware of it and hopefully taking account of it in their underwriting.

[Caroline (Interviewer)]

In terms of other things that we are thinking about and maybe that, that you're thinking about. If you talk about the kind of, the attractiveness of building this kind of infrastructure of bas it here in the uk, how do you defend against competitors? JL Cushman Wakefield and again with the backdrop of yields is that not making investors think twice as yields continue to rise, but especially here in the uk.

[Rishi Bucha (CBRE UK CEO)]

So I can only tell you what we're seeing aside from the amount of domestic capital under the Mansion House Accord, that's where you've had a number of defined contribution providers commit to invest 10% of their capital in the UK in the private markets by 2030. So you've got a wonderful pool of domestic capital. We have seen a huge increase in the amount of overseas capital looking at the uk, predominantly out of Japan, the United States and Australia. So there is something going right. People are looking to diversify away from other parts of the world, you know and we can forget sat here in London, we've got Ruler Law, some of the best universities in the world, a great tech infrastructure, business of relatively stable currency and time zone in a global environment that's really valuable. It's really easy to forget these things sat here with the day to day minutiae of the doodle and gloom. But when you, when you travel around the world like I do, actually London is one of a handful of places that is still viewed as very attractive with stability in the long term, obviously we've got some short term challenges right now.

[Lizzie (Co-Host or Interviewer)]

Yeah. And what if there is a change of prime minister? If you get a more left wing Prime Minister, is there any particular policy, Rishi, that worries you could slow down investment in your sector?

[Rishi Bucha (CBRE UK CEO)]

Look, without getting to the individual names, there are clearly the bond markets would if there is a change in prime Minister, there's clearly the bond markets will favor certain candidates over the other. But like I said before, from a real estate investor perspective, they're very comfortable investing at higher rates of interest rates. That's not a problem. Done that for years. The issue is just having some stability back. So if we do end up with a change in pm, you know, arguably some stability comes back and investors will look through it and invest.

[Caroline (Interviewer)]

Okay, I'm going to press you a bit about renationalizing various industries. What about rent controls that were discussed only a matter of days ago by the Chancellor Rachel Rees, that would surely spook investors who are trying to build, as you say, long term investments with rents for, you know, older people or students or whatever it might be. Rent control would be a huge deal

[Rishi Bucha (CBRE UK CEO)]

for the to a certain degree we've had if you just take. Let's talk about residential. Just let's look back over the last five to seven years of what's happened. You can no longer claim back mortgage interest relief on your tax returns. The amount of legislation rightly that's coming to protect renters most recently the Renters Right Act. Having said that, it's in a way it's institutionalizing the asset class. Individual private landlords are finding it too expensive, too complex to invest. We've seen a huge, huge uptick in the amount of institutions looking for living. And actually if you end up with more institutional landlords, arguably that's better for the tenants renting the space.

[Caroline (Interviewer)]

Okay, Rishi, very good to see you. Thank you so much for coming in and speaking to us here on Bloomberg Radio. That is Rishi Bukar who is the CEO of CBRE UK giving us some interesting thoughts on data centers on the infrastructure build out, saying no, you know, investors not deterred as yields rise or even really by the political situation. But I think a kind of clear message on stability. Lizzie, I mean that was what we were talking about during the general election.

[Bloomberg Radio Host]

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