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Mayfair hurt by hedgies' demise
David Rothnie25.11.08
Office rents in Mayfair, the location of choice for London's hedge fund community, slumped in the third quarter as the global financial crisis hit demand.
West End office rents fell in the third quarter for the first time in almost seven years, according to CB Richard Ellis in its global office survey.
The total office occupancy cost in the West End was £139.50 per sq ft a year in the year to 30 September, down 5.1% from a year earlier.
Hedge funds have gone bust after investors withdrew their money following the collapse of Lehman Brothers in September, causing a ripple effect on rents in Mayfair, which is known as hedge fund alley. Rents also fell in midtown Manhattan and Tokyo.
Raymond Torto, CB Richard Ellis' chief economist, predicted the slump will continue for at least the next two quarters. He said: "London's West End or places that are showing declines right now are the leading edge of what's going to happen in the next six months."
