A half-decade after Covid-19 sparked a debate about remote work, real estate giant Brookfield Corp has declared that employees are back at their desks. “The debate is finally over,” the Canadian alternative investment firm said in a presentation released on its investor day on Sept 10, which pointed out that many companies have returned to the office.
Remote work increased dramatically in all US industries after the 2020 pandemic hit, according to data analysed by the US Department of Labor. By the following year, remote work was still higher than in 2019 in most industries.
Yet five years later, the vast majority of companies have mandated their staff’s physical presence at least part of the time, according to Brookfield, which cited JLL Research on Fortune 100 office attendance policies. More than half of offices require full-time attendance.
“So what happens when everybody goes back to work?” Kevin McCrain, a managing partner in Brookfield’s real estate group, told investors. “The demand for office space is soaring because companies vastly underestimated the amount of space they were going to need coming out of the pandemic.”
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This is good news for Brookfield, which has a strong presence in the office sector. The firm said on Sept 10 it owns global office buildings collectively worth more than US$23 billion ($29.5 billion) across its so-called super core and core-plus portfolios.
For Brookfield CEO Bruce Flatt, the return-to-office debate ended long ago. “Three weeks after Covid hit, we went back to the office and it was the best thing we ever did,” Flatt said at the investor day. “First, it was more fun being at the office than sitting at home.”
What’s more, Brookfield did things during that time that will be “game-changing” over the next several years, he said. That includes entering the insurance market, which is now going to be a cornerstone of the firm’s business.
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The parent company expects to pour more capital into its insurance business and “use that capital to grow the business to possibly US$600 billion and maybe more”, Flatt said. — Bloomberg
UBS CEO says tariff impact on inflation, Fed still unclear
UBS Group CEO Sergio Ermotti said the impact of global tariffs on the US economy and inflation remain unclear, making it harder to predict the outlook for Federal Reserve policy.
“In the US, we still believe that growth will be there but the inflation question and how it plays out into the central bank’s policies remains open,” Ermotti said in a Bloomberg Television interview on Sept 11.
While a reduction to interest rates by the Fed at its Sept 16–17 meeting is baked into expectations, beyond that investors are shifting predictions on the pace of policy adjustments.
“The true issue on tariffs will be seen on consumers,” Ermotti, 65, said. “In the US, we need to see exactly if there is an inflationary aspect of tariffs. I think it’s unclear.”
Goldman Sachs Group Inc CEO David Solomon signalled this week that there is no need for the Fed to rapidly cut rates, diverging from the Trump administration’s pressure on the central bank to loosen monetary policy.
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Ermotti said the global economy is being divided into two — one that is driven by technology and artificial intelligence, and the other that is more traditional. The divergence is playing out in areas like Hong Kong’s “booming” market for IPOs, he said.
“In general there is a constructive momentum,” he said. “But the jury’s out because the complexity is not only the economics, but also the very complex geopolitical environment.”
The Swiss economy ministry is seeking input from UBS as it scrambles to get an improved US trade deal, Bloomberg reported last month. The Trump administration has imposed 39% levies on Switzerland’s exports to the US, the highest tariff rate for any developed nation, posing a major threat to businesses and the economy.
A potential role in helping the government navigate the tariffs could help boost UBS’s standing with Swiss authorities after relations tensed over proposed capital rules that the bank opposes.
Ermotti described the capital plans as “excessive” and called the debate on banking regulation in Switzerland a “huge distraction.”
Switzerland unveiled proposals to toughen its bank capital rules following the 2023 collapse of Credit Suisse, which was merged into UBS to create a lender that would likely be too big to rescue. The move could add as much as US$26 billion ($33.4 billion) to UBS’s existing capital demands, according to government estimates.
“The requirements, as they are, are very punitive and excessive and therefore we would need to think about how to protect our shareholders and our stakeholders’ interests,” Ermotti said.
The debate has raised questions over whether the country’s largest lender might limit its growth or even move headquarters. Ermotti reiterated that the bank has no plans to shrink its business and wants to keep operating out of Switzerland.
“It’s difficult for me to see a successful global organisation that is very close to clients, that is very resilient and strong in terms of capital embracing a strategy of shrinking as a good way to succeed in the future,” he said. “So we are very focused on keeping our global footprint.”
UBS is focused on completing its integration with Credit Suisse by migrating clients in Switzerland, an exercise that will finish next year, Ermotti said. — Bloomberg
Australia’s multi-billion dollar energy link to Asia will focus on local data centres for now
The US$24 billion ($30.8 billion) renewable energy project that seeks to link Australia and Asia will focus on supplying local data centres for now, with a proposed power cable to Singapore seen as a longer-term option.
Billionaire Mike Cannon-Brookes’ SunCable project will concentrate on building solar and storage capacity to serve customers in the Northern Territory including data centres from the end of this decade, the company said in a statement. Electricity exports to Singapore would follow in the mid-2030s, it said.
“The energy-hungry digital sector will be one of the first movers in the transition to large-scale renewable power supply,” SunCable said. “The Northern Territory offers a compelling proposition for sustainable data precincts: abundant renewable energy, existing fibre optic connectivity, land availability, and proximity to key regional markets.”
The Australian Financial Review earlier reported the increased local focus. The development is one of the most ambitious global efforts to supply power-hungry Asian economies that lack the land to generate enough clean energy. SunCable’s Australia-Asia Power Link plans to send 1.75 gigawatts of renewable electricity — about 9% of Singapore’s current demand — via a 4,300km (2,670-mile) subsea cable.
A revised plan outlined in August targeted a final investment decision in 2027 and first exports in the early 2030s. Singapore granted conditional approval to the proposal in October. — Bloomberg
Oracle shares surge most since 1992 on cloud contract wins
Oracle Corp shares gained the most since 1992 after the company gave an aggressive outlook for its cloud business, cementing the software maker’s place in the race to support demand for artificial intelligence computing.
The stock surged 36% on Sept 10 in New York, bringing its market valuation to about US$933 billion ($1.2 trillion). The rally temporarily turned co-founder Larry Ellison into the world’s richest person, with the tech magnate passing Elon Musk for a few hours. AI-related stocks such as chip developer Nvidia Corp and Asian suppliers also climbed.
Known for its database software, Oracle has recently found success in the red-hot cloud computing market and is emerging as a key provider of AI computing capacity, competing against cloud leaders Amazon.com Inc, Microsoft Corp and Alphabet Inc’s Google.
Bloomberg reported previously that Oracle signed a deal with ChatGPT operator OpenAI to supply 4.5 gigawatts’ worth of data centre capacity — enough energy to power millions of American homes. The Wall Street Journal said on Sept 10 that the contract will be worth US$300 billion over five years. Oracle also counts Nvidia and ByteDance’s TikTok as major cloud customers.
Such deals helped boost remaining performance obligations — a measure of bookings — to US$455 billion at the end of the fiscal first quarter, Oracle said on Sept 9. That is more than four times higher than the same period a year earlier. It’s also roughly four times Google’s backlog, according to Bloomberg Intelligence, suggesting Oracle’s cloud-growth rate is poised to surpass Google’s.
“It was an astonishing quarter” and demand for Oracle cloud infrastructure continues to build, CEO Safra Catz said. The company signed four multibillion-dollar contracts with three different customers in the quarter and expects to sign up several additional customers in the coming months, she added, pushing remaining performance obligations above US$500 billion.
Recent and upcoming bookings will translate to a rapidly expanding cloud infrastructure business over the coming years, Catz said. That unit will expand 77% to US$18 billion this fiscal year and continue to grow at an aggressive clip, reaching US$144 billion in annual revenue by the fiscal year ending in May 2030, she said.
“We’re all kind of in shock in a very, very good way,” Brad Zelnick, an analyst at Deutsche Bank, said during Oracle’s earnings conference call. “There’s no better evidence of a seismic shift happening in computing than these results that you just put up.”
Oracle’s stock was already on a tear before the latest financial results. It was up 45% this year through Tuesday’s (Sept 9) close, four times the gain seen in the S&P 500. Its surge on the following day lifted other AI stocks including Nvidia, which rose 3.8%. In Asia, Nvidia suppliers rallied in Japan and South Korea, with Advantest Corp up more than 3% and SK Hynix Inc advancing 5.6%.— Bloomberg
