Hedge Funds Lead Chase For London Space As More Deals Soar Past £100 Per SF
Hedge funds and private equity firms including Winton and Blackstone helped break through London office leasing records in 2022.
More than 1.3M SF of London office space was leased at rents higher than £100 per SF in 2022, according to data compiled by adviser CBRE, Bloomberg reported.
Leasing in the West End was at its strongest since 2000, the agent’s data showed.
It was also a record year for high-value deals outside traditionally premium districts. In total, 13 deals outside the West End achieved rents of more than £100 per SF, almost double the seven previously recorded by CBRE in total since it began collecting the data in 1984.
Across the whole London market, take-up for 2022 totalled 12.3M SF, 28% above 2021. Banking and financial firms represented the largest sector and accounted for 28% of all space taken. Professional services such as law firms, and the creative industries, each accounted for 17% of the total.
A severe shortage of new workspace meeting sustainability standards has also focused the market on chasing sustainable offices, CBRE said.
This supports recent research from JLL that showed that sustainable buildings were trading at a 20% premium as investors and occupiers future-proof their plans.
With many hedge funds performing strongly in 2022, investment giants continued to dominate space acquisition and Winton will move into its new Knightsbridge headquarters at One Hooper’s Court this year, a new development opposite upscale department store Harvey Nichols.
The group has leased the top two floors of the building at a rent of more than £100 per SF, according to Bloomberg.
Blackstone agreed a deal last year to rent soon-to-be-redeveloped Landsdown House on Berkeley Square. The private equity firm will lease the 226K SF, 10-floor building when work completes in 2028.
“This data shows that there is still appetite for good-quality office space in London’s West End, even in the face of strong economic headwinds,” CBRE Executive Director Rob Madden said.