Investment group Sapinda UK is poised to take the top floor of 23 Savile Row, W1, for close to £110 per sq ft, defying reports that hedge funds are being deterred by high Mayfair rents.
It is in final negotiations to take around 10,000 sq ft, including a roof terrace, at the 100,000 sq ft block.
If agreed, the rent will be the highest this cycle and would provide a boost to the proposed £200m disposal of the building.
Several West End agents this week gave contradictory assessments of the attractiveness of the market to hedge funds, with Cushman & Wakefield claiming that some were being forced out of their preferred HQ locations because of soaring rents. It said that five years ago 70% of all hedge funds were based in Mayfair and St James’s but that just half now reside in the area.
Knight Frank disagreed. It said that hedge funds were just as active in the West End last year as they were in the 2006 peak.
Jones Lang LaSalle West End agency director Andrew Barnes added: “Mayfair is one of the most expensive office locations in the world, but some companies, including established hedge funds, will see this as a necessary operating cost for running their business, because they need a presence in the area.”
However, he added that some new funds would seek more cost-effective space outside of core West End, and that the soon-to-complete Shard, SE1, was already attracting attention.
Jonathan Evans, head of West End agency at JLL, which is letting agent on the Shard with Knight Frank, said: “There have been some hedge funds and other West End occupiers, including from the media sector, looking at the building as an option. It is an iconic building but can offer lower rents.”
Rents at the Shard will be between £55 and £75 per sq ft.
H2SO and CBRE are advising 23 Savile Row landlord D2 Private; Savills is acting for Sapinda.
All parties declined to comment.
joanna.bourke@estatesgazette.com
