Paris and London lead recovery in European banking take-up

The European banking sector has mounted a notable recovery based on its office leasing activity in the last six months, according to the new European Banking Briefing from global real estate adviser Cushman & Wakefield.

Paris and London have led the recovery with total European banking sector take-up of office space totalling over 400,000 m² in the six months to the end of Q1 2010. This is almost double the previous six months’ total and the highest figure since Q4 2008. The rate of take-up has also outperformed the rise in overall office leasing activity with banking now accounting for over 11% of activity, a gain of 2.5% compared to the previous six months.

The rise in take-up was attributed mainly to a number of large transactions in Paris and London which together accounted for 66% of total banking take up in Europe. Paris was the most active banking location in Q4 2009 accounting for 60% of total banking take up while London’s City & Docklands was dominant in Q1 2010 accounting for 39% of the total. The Brussels and Moscow markets were also relatively active with over 42,000 m² and 27,500 m² of banking letting activity recorded over the six-month period.

According to the report, there were nine transactions within Europe that were individually over 10,000 m² which led the recovery in banking letting activity. Of the nine largest recorded transactions, four of them were owner-occupation deals. These four deals accounted for over 130,000 m2, or almost 50% of the largest nine transactions and 32% of total banking take-up over the period.

Guy Douetil, head of Cushman & Wakefield’s EMEA banking group, said: 'Although banks still face significant uncertainty deriving from a number of issues, there is definite improved sentiment in the sector with strong results for some banks and many now in a position to consider longer term business and property strategies. This has been seen with increased take up activity and the recent agreement between UBS and developer British Land to build a new HQ at Broadgate in London is an example of a bank able to commit to a strategy for the future and take advantage of market conditions. As anticipated, activity has picked up first in London and Paris and we expect other key banking centres to follow suit going forward.'