Hedge fund demands for London office space drops

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Hedge funds and private equity firms took the least amount of office space in central London since the start of 2012 in the first quarter, according to broker Cushman & Wakefield, as sputtering global growth and increased regulation deterred startups.

Bloomberg News reports that the slump follows four years of growing demand for offices from alternative investment firms who pay some of the highest rents in the U.K. capital, said Elaine Rossall, the broker’s head of central London research.

Investor preference for large hedge funds and the mounting cost of complying with regulations has led to a slowdown in startups. The industry contracted in Europe last year for the first time in at least 15 years, according to data from Eurekahedge.

“There is a degree of caution at present and we are seeing prospective occupiers take a pause and await the outcome of factors such as the Brexit vote,” said Andrew Tyler, head of West End office agency at Cushman & Wakefield. “As such, we would anticipate a slower second quarter. However, the supply shortages remain in the market and I would anticipate accelerated uptake in the second half of the year.”

To access the complete Bloomberg News article hit the link below:

Hedge-Fund Demand for London Offices Drops to Lowest Since 2012

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