European financial capitals can expect subdued performance in terms of banking office take-up as the wider sector remains on the cusp of significant change, according to Cushman & Wakefield's new European Banking Briefing. The retail banking sector in the UK can also expect to undergo a sea change over the next few years with the arrival of a number of new entrants to the market, the report said.
European financial capitals can expect subdued performance in terms of banking office take-up as the wider sector remains on the cusp of significant change, according to Cushman & Wakefield's new European Banking Briefing. The retail banking sector in the UK can also expect to undergo a sea change over the next few years with the arrival of a number of new entrants to the market, the report said.
Although the global economic crisis has reduced banks’ take-up of office space by 53% in the last six months compared to the previous six months, the rate of decline is markedly slower than before. Whereas the London market previously saw the biggest drop in activity in the six months to the end Q1 2009, the UK capital has remained relatively healthy and was the most active European market in the last six months. Major lettings were concluded including 49,000 m2 to Nomura in the City and 20,000 m2 to Macquarie on the City fringe.
Prime office rents in London are widely accepted to have bottomed out and with an increasingly limited supply of new space coming to market, banks have begun to take advantage of their position to agree attractive terms on new buildings to consolidate a number of buildings into one or to upgrade the quality of their accommodation. Although property costs account for only a small percentage of overalls costs, savings are still available. However, the window of opportunity is closing in order to maximise the savings via renegotiating leases. Cushman & Wakefield expects the better capitalised and the Asian banks in particular to be among the movers over the next 12 months.
