Sept. 10 (Bloomberg) -- Hedge funds agreed to lease out more than twice as much office space in London’s West End this year as in the whole of 2012 as firms including BlueBay Asset Management LLP and Elliot Management Corp. expanded, U.S. property broker Cushman & Wakefield Inc. said.
Hedge funds added 58,000 square feet (5,390 square meters) of space in the district, up from 25,000 square feet last year, Cushman & Wakefield said in a statement today. The amount of new space leased by private-equity firms was little changed at 45,000 square feet.
BlueBay, Highbridge Capital Management LLC and Elliot Management, which oversee a combined $100 billion of assets, are among money managers that have spurred the surge in leasing, Cushman & Wakefield said. Such firms are getting bigger as cautious investors seek stability in established money managers. Meanwhile, smaller hedges are struggling to raise money and face higher compliance costs.
“There are not a lot of startups that are taking space today and that is a big change from six or seven years ago,” said Henry Peto, a Cushman & Wakefield partner in London. “We are seeing a consolidation of the industry with investors attracted to the more mature and larger hedge funds who’ve been driving the space take up in the West End.”
Hedge funds accounted for 31 percent of the office space leased in the Mayfair and St. James’s neighborhoods this year, Cushman & Wakefield said. Private-equity firms leased about 24 percent of the space.
The rents paid by some firms may have risen to levels that are close to the peak of the last U.K. office-property boom in 2007 because of the competition for space, Cushman & Wakefield said.
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