Press

• Banking sector office leasing levels across Europe 20% above five year average
• Leasing activity in Prague and Warsaw particularly strong
• Chinese banks continuing to expand throughout Europe
• European and US-based international banks more active in Asia Pacific markets

The European banking sector is gaining strength based on high levels of office leasing activity in the last year, according to a report from Cushman & Wakefield. During that time (April 2010 - March 2011), take-up of office space by banks across Europe has been 20% above the five year average.

With over one million sq.m of office space leased, activity levels have bounced back from the low points in 2009 and 2010 when less than half that amount was let. The number of lettings comprising more than 5,000 sq.m was higher in the last six months than the previous six months.

The major banking centres of London, Paris and Frankfurt continue to dominate, accounting for just over 55% of total banking office leasing in Europe over the past year. London was the most active, with nearly 300,000 sq.m of take-up, 27% of the European total. This was heavily skewed by the large UBS pre-let of 65,000 sq.m in Q3 2010.

Office leasing was particularly strong in the cities of Warsaw and Prague. Warsaw, which is establishing itself as the regional banking hub for Central and Eastern Europe, saw take-up soar almost 63% higher than the five year average. Leasing levels in Prague during the last year have been just over 25% above.

Lack of high quality supply in a number of locations across Europe has resulted in the trend of owner occupier continuing. This is particularly true of London and Moscow. With prime rents starting to rise in many European cities, tenants are no longer able to lock-in value through a pre-let as they were six-nine months ago. None of the larger deals between October 2010 and March 2011 were pre-lets unlike two of the largest transactions that took place mid-2010.

Key leasing deals in the European banking sector (April 2010 - March 2011)
City	Submarket	Location	Tenant	Deal type	Size (sq.m.)	Date
London	City & Docklands	25 Bank Street	JP Morgan	Owner occupation	97 545	Q4 2010
Frankfurt	Europaviertel / Messe	Theodor-Heuss-Allee 2	ING Diba	New Lease	38 731	Q4 2010
London	City & Docklands	Building B1, King's Cross Central	BNP Paribas	Owner occupation	32 515	Q4 2010
Moscow/td>	ZAM	ul. Letnikowskaja 2, bud. 4	Bank Otkrytie	Owner occupation	25 038	Q4 2010
Moscow	CTY	Krasnogvardeyskiy 1-y pr., vl. 15 (site 13)	VTB	Owner occupation	16 000	Q1 2011
Milan	Obrzeża centrum	Ferrante Aporti - Block B	State Street Bank	New Lease	9 700	Q4 2010
Madrid	M-30	Isabel Colbrand, 4	BBVA	New Lease	8 900	Q1 2011

The trend of Chinese banks expanding in Europe is continuing as they identify opportunity in a developed but currently undersupplied lending market and take advantage of caution amongst local competition. One of the first movers was the Industrial and Commercial Bank of China (ICBC) which opened offices in London, Moscow, Luxembourg and Frankfurt. ICBC has now announced a further five offices will open in the next year in Paris, Amsterdam, Brussels, Madrid and Milan.

A reverse trend is European and US-based international banks growing their presence in Asia Pacific markets. JP Morgan has pre-committed to expand in Sydney, Lombard Odier and the Spanish bank BBVA recently took space in Hong Kong while Barclays Capital, BNP Paribas and Bank of America have all relocated to permit expansion in Singapore. Other activity includes Bank of America, RBS and HSBC leasing significant space in India. Russia's largest bank Sberbank became the first Russian bank to expand outside Europe, opening an office in India and now looking to establish a foothold in China.

Key leasing deals - European and US-based banks taking space in Asia Pacific (April 2010 - March 2011)
Country	City	Location	Tenant	Deal type	Size (sq.m.)	Date
China	Hong Kong	2 International Finance Centre	BBVA	-	1 413	Q1 2011
China	Hong Kong	Two Exchange Square	Lombard Odier	-	697	Q1 2011
Singapore	Singapore	Marina Bay, Financial Centre, Tower 2	Barclays Capital	Relocation / expansion	23 222	Q1 2010
Singapore	Singapore	Ocean Financial Centre	BNP Paribas	Relocation / expansion	13 935	Q1 2011
India	Mumbai	Nirlon Knowledge Park	Citibank	Relocation / expansion	8 910	Q3 2010
India	National Capital Region	Unitech Infospace	Bank of America	Relocation / expansion	11 148	Q3 2010