Rent of more than £100 per sq ft has been agreed on offices in the West End for the first time since the property crash as the return of confidence among financial occupiers has begun to cause a shortage of prime office space.
Rhone Capital, the private equity group, has agreed to take the top floor at a building in Mayfair at 40 Bruton Street for more than £105 per sq ft, in addition to two lower floors at about £95 per sq ft.
Although a relatively small office, the deal is seen by agents as representative of a wider recovery in West End offices, and in particular for trophy buildings around Mayfair.
It is thought that Rhone has already sublet some of the space, showing the depth of demand. There has been a steep recovery in rents in the West End this year, which is a marked reversal from 2009, when commentators were still forecasting sharp falls for the top-end buildings that were popular with high-flying hedge funds during the boom as such occupiers retreated from the market.
Rents had already dropped by almost a third in 2008 from a peak of about £120 per sq ft.
However, the return of profits in the financial services industry has meant that groups are once again expanding.
Paul Smith, partner at H2SO, which is advising Prupim, the landlord, declined to comment on the letting but confirmed all floors had been placed under offer. CBRE advises Rhone.
Mr Smith added: “There is a lack of quality office space in the West End which is pushing rents much higher for the best buildings in the area.”
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