Job losses in the banking sector in London’s City & Docklands district could have a serious knock-on effect on office take-up in Europe’s financial capital, says Cushman & Wakefield.
In its Banking Letting Activity Update published today Cushman & wakefield said: ‘The banking sector is a major occupier of office space in the key cities of Europe, so obviously any downturn in its activity in the leasing market would impact the overall letting activity in Europe.
'However, London was the only key banking location in Europe to stall in the last quarter of 2007, with activity down 92%.’
Guy Douetil, partner at Cushman & Wakefield and head of the firm’s EMEA Banking Group, said that every 10,000 jobs lost in London will equate to around 1m sq ft less office space needed, but said it was against a ‘backdrop of low supply, unlike during the downturn in 2000’.
Douetiel said overall take up in the final quarter of last year in Europe’s six key banking cities of London, Paris, Frankfurt, Moscow, Budapest and Prague was only marginally down on take up in the fourth quarter of 2006.
Paris had the highest banking take-up in the final quarter last year with 575,174 sq ft similar to the 2006 figure, while London’s was the lowest with 44,575 sq ft of take up.
‘However, the next three to six months will be crucial. If the prevailing sentiment of risk aversion continues, the danger exists that a more severe knock-on effect will feed through to property requirements, although the scale of the effect is unlikely to be on the same level as London’s,’ said Douetiel.