Regulation forces financials out of Central London

London UKHedge fund and private equity firms are dominating office leasing in core areas of London among the non-banking financial services sector, according to research. The figures, published by property consultants Cushman & Wakefield, show financial services firms rented 240,000 square feet of office space in the first quarter this year, with hedge funds and private equity firms accounting for 41% of this total – or 23% and 18% respectively. However, while the figures indicate financial services occupiers currently pay some of the highest rents in London, cost-conscious firms are increasingly seeking better value for money, locating outside core West End areas. Cushman & Wakefield suggested this change could be attributable to the rising cost of regulation, and the added cost of hiring staff and purchasing to boost compliance and governance capabilities. In the West End alone in 2015, there was an overall 53% increase in take-up from non-banking financial services firms last year. Looking forward, while demand continues to outstrip supply, the firm expects demand to slow in the second quarter of this year as the ‘Brexit’ referendum on June 23 approaches. Once the plebiscite is complete, it will accelerate again. ©2016 fund europe

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