Quarterly rents for some of the poshest offices in London have dived because of the way the Great Recession has cut a swathe through London’s once thriving hedge fund sector.
In Mayfair’s hedgie-belt quarterly rents for a typical 5,000 square foot top-end office have collapsed from around £144,000 to £69,000. At the height of the boom in mid 2007 lets in Mayfair and St James – which boasts some of the finest property in the UK – were running at around d £120 a sq.ft. Today they are going for £55 a sq.ft.
It’s been reported that some hedge fund managers are relocating to Switzerland. But many appear to have simply vanished off the financial map. Little start-up hedge fund operations, however, are beginning to spring up in London. They often comprise redundant employees or directors of bigger hedge funds which went kaput.
Start-up hedgies can find bargains. The rents are a fraction of what they were in the choicest corners of Mayfair and St. James and lucky tenants can benefit from toys
and gizmos abandoned in their flight by the bigger hedge fund tenants.
In the boom period plasma screen TVs and leather furnishings were a must for image conscious hedge funders. Now – little groups who are appearing from the wreckage – can find themselves the beneficiaries of such largesse.
From the landlords point of view it’s sometimes cheaper to accept lower rents than to be lumbered with empty offices where the rates alone can cost £25,000 a quarter.
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