Banks set to consolidate space globally, grow in London

A majority of banks with a presence in Central London plan to streamline their real estate portfolios over the next two years, CBRE has established.

According to new research by the broker, 72% have consolidation plans in response to the global economic situation, and are looking at implementing more cost-effective and efficient operational measures.

This could be good news for the UK capital as London remains a likely growth area as banks cut elsewhere.

Respondents to CBRE’s latest occupier survey, which included 19 of London’s largest banks, also found that 34% expect to see consolidation of real estate assets in response to an expected rise in M&A activity in the sector. Some 50% said they expected to consolidate their current office space occupied, with just 6% stating that they planned to maintain their current portfolio.

According to the report, other measures which may affect the volume of London office space taken by the sector in the next two years include a trend for large financial institutions to relocate some functions to other, more cost-effective, UK markets which could reduce salary bills by as much as 40%.

The survey confirmed that maintaining a core presence in London was central to future plans, due to its 'unrivalled position' as a global financial centre, wide talent pool, cultural benefits and central timezone between New York and Asian centres.