Rental fees for luxury office space in London declined by nearly a third in 2008. The drop is partially blamed on the ill fortunes of hedge funds which comprise many of this sector’s tenants.
A recent study by a commercial estate agent found that the rent for high-end west London office space fell from an average of £120 per square foot in December 2007 to £85 per square foot a year later. Overall, average rents in the city fell by almost 20 percent in the same period, from £65 to £52.50 per square foot.
Recently the ailing banking system has dominated the headlines due to the controversies over multi-billion pound taxpayer hand-outs and executive bonuses.
However, the hedge fund sector’s former success fuelled a relative disregard for property costs as they acquired sought-after office space, and consequently a larger fall in rents in certain areas of London.