Heading into H2 2017, European lenders are now more than ever primed to chart a course out of the UK. However, banks are also finding that the European cities on the new destination shortlist (Dublin, Frankfurt, and Amsterdam) each present logistical difficulties, with Frankfurt suffering from a dearth of office space.
Frankfurt has been emerging as one of the best destinations for banking talent from the UK, specifically London, which has been seeing job cuts and layoffs. The German city boasts the infrastructure and talent to satisfy many demands for incoming banks – given its strategic location, Frankfurt has also been floated as a likely landing spot for lenders looking to set up shop in continental Europe.
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However, prospective banks are now finding that the city might not be as enticing as originally thought as available office space seems to be dwindling by the day. This issue was exacerbated recently with Bundesbank’s expansion in the city, sapping nearly 7,000 square meters of office space in Trianon Tower, according to a recent Bloomberg report.
While Frankfurt’s overall office vacancy rate is higher than many other German cities – coming in at 9 percent – its business area lacks access to adequate modern, high-quality blocks of space that are needed to justify a substantial move on the part of European lenders, many of which are looking to relocate tens of thousands of workers.
The dwindling office space could also turn relocation bids into a virtual race, with a first-come-first-serve situation unfolding rapidly. With only six prime office buildings in central Frankfurt currently available, with upwards of 10,000 square meters available to rent, the options for lenders are few and far between.