Foreigners price hedge funds out of Mayfair
Saturday 09 June 2012
Hedge funds are being priced out of their favoured London homes in Mayfair and St James's as wealthy foreign buyers snap up properties and landlords ramp up rents to levels even the financial elite cannot afford.
With the funds under pressure from investors due to generally declining returns and now trying to cut costs, they are looking to more modest areas of the capital for accommodation.
Bloomberg reported yesterday that properties which might have been offices are being converted into residences costing £2,000 a square foot or more.
The price of luxury homes in the capital has jumped by nearly 40 per cent in the last five years, according to the estate agents Knight Frank.
"It's a wonderful problem to have," said Andrew Lax, co- founder of Lancer Property Asset Management, which oversees Mayfair's Berkeley Square Estate. "Holding the line becomes increasingly difficult."
Data compiled by the Bloomberg news service shows that hedge funds lost nearly 3 per cent of their value in May as they, like many other investors, struggled to cope with the implications of a Greek exit from the euro and Spain's bank crisis.
Even Arki Busson, the hedge fund guru who has found fame due to charity work and relationships with Elle Macpherson and Uma Thurman, has seen his assets tumble from a $14bn (£9bn) peak in 2008 to about $7bn now.
It is likely that he can still afford to keep his office above Green Park Tube station in London, however.
The shortage of property in Mayfair has been exacerbated by the banking crisis. Banks have hacked back on their lending to property ventures, so new buildings are scarce.
Data from property consultancy Cushman & Wakefield show that half of all hedge fund managers in central London are now based in either Mayfair or St James's. Five years ago that figure was 70 per cent.
Some industry insiders say that investors are increasingly less impressed by lavish offices in expensive bits of town in any case, and would rather see the people who are managing their fortunes have less obvious expenses.
- 1 Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
- 2 Moscow voted the world's unfriendliest city
- 3 The excuses your boss is most likely to believe when you call in sick
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The one chart that shows how George Osborne is almost certainly going to be our next Prime Minister
The excuses your boss is most likely to believe when you call in sick
Bono's group has made more money from Facebook investment than from all his music
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...