The Content Maker

With hedge funds from Mayfair and St. James diving due to the recession, the cost of renting office space in these two business districts has come down rapidly.

The year 2007 was boom time for the real estate business, with lets in hedge markets soaring to a peak of £120 per sq ft, report property managers. Now the rates have dropped to £55 which is the all-time low rate for hedge funds. With the onset of recession, businesses went bankrupt and left behind many vacancies, which has led to the present decline in rents.

According to international property consultants King Sturge, the area has witnessed a drastic fall in quarterly rent. From £144,000 per 5,000 sq ft, it has fallen to an alarming £69,000. James Beckham, a partner at King Sturge, commented that the area is witnessing a rising number of hedge fund vacancies, and hence the rents have dived like never before.

King Sturge did a roaring business in office space letting during 2007, when they successfully let a total of 870,000 sq ft of space to 77 companies. But the celebrations were over for the company by 2008, when only 48 companies took a total of just 595,000 sq ft of office space.

But the good news is that with owners slashing rent prices, empty office spaces across London are again attracting businesses and office fitout plans are again too being considered and put into action. Property owners, to avoid the risk of losing business are accepting smaller rents. But the leases this time are short-term, so that owners can raise prices once business in the area starts looking up and competition grows.