Many of London’s private investment funds are breaking free from their Mayfair office space to rent as a result of an unsuccessful year and the pressure of cost-cutting.
Office space in Mayfair is being traded for Victoria office space as well as Soho and bustling Oxford Street which means that London’s ‘hedge fund alley’ in Berkeley Street and Curzon Street will see a great decrease in hedge funds situated there.
Research from property consultancy Cushman & Wakefield suggests that occupation of London areas such as Mayfair and St James’ office space has decreased severely, down from 69% five years ago to just 51% at the end of 2011.
Cushman & Wakefield partner, Henry Peto, is of the opinion that, “because they have had a number of years of poor performance investors are putting them under greater scrutiny than in the easy days of 2007 and 2008. That extends to not taking on extravagant offices and spending a lot on the fit-out. That is pertinent to start-ups – you have more leeway if you are established.”
Hedge funds have therefore swapped their £100 per square foot office space to rent in Mayfair and St James’ for a more manageable figure of just £65 per square foot for Oxford Street office space in an effort to cut costs.