Paris tops European ranking of office space taken by banks
18 May, 2007, Paris
The banking sector leased more than 917,000 sq m of office space last year in Europe's key banking locations, up 7.9 per cent on 2005, according to the latest edition of the biannual EMEA Banking Business Briefing produced by global real estate consultant Cushman & Wakefield.
Paris tops Cushman & Wakefield's ranking of Europe's top banking locations. Here, banks accounted for 212,900 sq m of take-up. In second position comes the City & Docklands region of London with 179,050 sq m, narrowly beating Frankfurt in third place with 178,600 sq m.
Guy Douetil, who heads Cushman & Wakefield's EMEA Banking Group, comments: "Key players in the banking sector are continuing to expand through organic growth as well as through mergers and acquisitions. This has led to the office take-up by the banking sector in Europe's key locations rising by 31 per cent since 2004, up from 700,000 sq m to last year’s 917,000 sq m."
The second half of 2006 was much more active in comparison with the first half, with take-up 48 per cent higher at more than 547,000 sq m compared with 370,000 sq m in the first half.
As part of its tracking of office letting activity by the banking sector, Cushman & Wakefield also revealed that London and Paris alone accounted for 44 per cent of all banking activity in the office markets of Europe last year. "We are seeing London and Paris emerge as Europe’s top two global banking centres," adds Guy.
Bill Peach, Chairman of Cushman & Wakefield's City of London office, comments about London: "Prime office supply is extremely tight in London, in particular in the City & Docklands, the favoured location for banks. As a result, in order to expand, banks are having to sign pre-lets on new space due to come onto the market in 2008 and 2009, and to satisfy short-term demands by taking overflow space. Such is the confidence in the expansion of the banking sector in London that we are also seeing a return to speculative development, for example, at 30 North Colonnade in Docklands."
Denis Samuel-Lajeunesse, President of Cushman & Wakefield in France, says: "The banking sector, together with the law firms with which the banks work very closely, accounted for almost all of last year's office take-up in Paris’ key business districts in the centre of the city and in La Défense."
The biggest single office 'take-up' in Europe in 2006 was by Société Générale, following the French bank's announcement to develop the 68,000 sq m, 183-metre tall Tour Granit adjoining its head office in La Défense. This was followed by Deutsche Bank leasing 36,000 sq m in Frankfurt's City West district, and then the pre-let of State Street Bank of the US of 33,750 sq m, due to be ready in 2009, in London’s Docklands.
Looking ahead, Guy comments: "Banks will continue to show a high level of activity in Europe's key office markets as the wave of consolidations in the region’s fragmented banking sector continues. However, banks need to be aware that office space meeting their requirements will increasingly be in short supply as we progress through 2007 – so if they want to move this year, it is best to move fast. However, as we enter 2008, the supply pipeline is expected to catch up with demand as new, high-quality schemes are opened across Europe’s key locations."