The chill in the financial markets has raised questions over the sustainability of spiralling West End office rents. Financial Times
Rents have soared following surge in demand from niche financial groups. Research from Jones Lang LaSalle shows that more than 40% of lettings in Mayfair and St James’s have been to hedge funds and private equity groups.
D2 Private, the Irish group that owns St James’s Square, let two floors to Permal Capital, a US fund manager, for up to £135/sq ft, a West End record. Prime West End office space typically costs £95/sq ft, compared with £55/sq ft in the Square Mile.
But some property experts are questioning whether the turmoil in financial markets will cause companies to freeze expansion plans, refuse to pay record rents or even move to cheaper areas.