Goldman Sachs 'to sub-let office'

BELT-tightening at Goldman Sachs has led the US investment bank to put up for sub-letting its new building in prestigious Paternoster Square, according to a leading property magazine.

The building, in the shadows of St Paul's cathedral, is the latest casualty of the two-year bear market that has driven down share prices and dealings throughout the Square Mile.

Property Week magazine says that agent Jones Lang LaSalle could soon be formally instructed on the sub-letting. An ongoing property review at the bank, due to be completed in the next few weeks, is likely to conclude that all or part of the 187,940 square foot Warwick Court building could be sub-let.

Goldman shed some 1000 staff, or 5% of its global workforce, in the second quarter of this year. The group has already offloaded-Procession House at neighbouring Ludgate Hill where it had 95,000 square feet of office space.

Goldman employs 5800 staff in London, most in Peterborough Court and Rivercourt in Fleet Street. Staff in the buildings about to be marketed will be moved to Christchurch Court, next to Paternoster Square.

The sub-letting decision is likely to send shockwaves through the City office market especially as property agent Knight Frank's latest research shows that in the second quarter of this year some four million square feet of offices lay empty. Rents have been under downward pressure as a result.

The City property market is also being hurt by competition from outside its traditional boundaries, such as Canary Wharf.