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Europe's banking sector grows to account for 13% of total office take-up
18 Dec, 2007, London
- Turmoil in financial services sector is leading banks to defer their real estate
The banking sector has increased its share of the total office take-up in 15 top European banking locations from 8 per cent at the beginning of the year to 13 per cent at the end of September, according to the latest edition of the EMEA Banking Business Briefing by global real estate consultant Cushman & Wakefield.
Office take-up by the banking sector in these 15 top locations totalled 670,000 sq m over the first three quarters of 2007, 10 per cent up on the same period last year. The third quarter was the most active, with a record 280,000 sq m transacted.
This coincides with a drop in overall office take-up in the 15 locations, which in the first nine months of 2007 reached 6.9 million sq m, 7 per cent down on the same period last year.
Guy Douetil, Partner in charge of Cushman & Wakefield’s EMEA Banking Group, says: “The banking sector accounted for a record amount of take-up of office space in Europe in the first nine months of 2007. With the globalisation of the world’s banking sectors, we are seeing the concentration of activity in a constellation of key banking locations.”
However, following late summer’s credit crunch, the sector is now entering 2008 in a different mode. Guy continues: “It is too early to predict the full effects of the credit crunch, but for the time being we are seeing banks deferring their real estate decisions in the short term. However, we are not seeing a reduction of the amount of office space that they occupy.”
Regarding next year, Guy says: “Demand will be weaker in 2008, but the supply of good-quality office space in the right location is tight. If the effects of the credit crunch filter through to lead to a fall in speculative development, this will mean that the real estate market will enter the next upturn in banking activity in a strong position.”
The EMEA Banking Business Briefing produced by Cushman & Wakefield reveals that the four main traditional banking locations of London, Paris, Frankfurt and Brussels are now joined by Moscow, with these five cities accounting for two-thirds (67 per cent) of all banking take-up in the first three quarters of 2007.
Moscow’s take-up amounted to 84,900 sq m in the first nine months of 2007, coming in third behind London with 117,200 sq m (City & Docklands and the West End) and Paris (Ile de France) with 111,800 sq m, and above Frankfurt, with 81,800 sq m.
Natalia Ignatova, Director, Client Solutions, Cushman & Wakefield Stiles & Riabokobylko, the Russian office of Cushman & Wakefield, says: “Strong revenue growth, in particular in the consumer finance sector, is behind the increase in take-up by the banking sector in Moscow. This is being driven by buoyant consumer confidence and positive economic forecasts, coupled with an increase in merger and acquisition activity as foreign banks look for established local partners as part of their market entrance strategies.”