“Bidding war” between office space and residential in Mayfair & St. James’s
A commercial conflict has erupted in two of London’s most desirable areas, with the demand for luxury apartments leading landlords to convert office space in order to cash in – pushing aside the leading rent rates once reserved for Hedge Funds and Financial firms.
Driven by foreign buyers looking to secure luxury homes, the conversion of office space to home space in Mayfair and St. James’s comes at a time when commercial agents report an upcoming decrease in the construction pipeline of prime office space.
With both areas having been historically popular with high-priced financial firms, the insurrection of those seeking to set-up home rather than office has apparently led to a 37% increase in the cost of residential property in the last 5 years – the result of a “bidding war” between want-to-be residents and office tenants according to some reports.
While it would appear that some landlords are choosing homes over offices, it could be those who have resisted the temptation of short-term gain who really stand to benefit – with the diminishing volume of office space available in the area potentially raising long-term rents.
As one of the most desirable office locations in Central London, Mayfair and St. James is also home to a range of serviced office providers – offering businesses the chance to secure prime office space in these areas on a short term licence rather than on a traditional long-term commercial lease.