Bloomberg reports that Lehman Brothers will soon have enough space to accomodate 8,000 staff in London. The problem is that the firm only currently employs around 2,800 in the capital.
The investment bank is due to relocate to Docklands next year to a 30-story tower. The deal for the new building was signed at a time when the City was in overdrive and no-one foresaw the current industry difficulties. Lehman hired around 1,000 staff in London in 2000 alone and, clearly, with no end in sight to the investment banking boom, more space was thought to be needed.
The firm has been successful in letting out around 100,000 square feet of the 370,000 square feet it has at Broadgate. Unfortunately there is thought to be no escape clause in the Lehman Broadgate lease and the firm will have to continue to pay out millions annually until 2016 unless the buliding is fully sub-let.
As Bloomberg points out, even if the bank is successful in sub-leasing all of its Broadgate premises, it will still have roughly twice as much space as it currently needs. Consideration is likely to be given by the firm to rent out up to 20% of the new Docklands building.
Goldman Sachs and Citigroup are also thought to be trying to ditch space surplus to current requirements.