Moves by Credit Suisse Group, Barclays and Morgan Stanley were planned before Covid-19 hit
London — The giants of Wall Street and European banking are giving up their stronghold on London.
“Larger banks are clearly a higher risk for landlords,” said Rogier Quirijns, head of European real estate at Cohen & Steers, who oversees more than $2bn of property funds. “For London, there are the threats of recession and a possible no-deal Brexit to deal with, and I expect Covid-19 will most likely accelerate those risks.”
As well as job losses, the future of the office itself is on lenders’ minds. It’s taken the arrival of a deadly pandemic to convince bosses that working from home can be effective and relatively easy, and that’s provided a timely opportunity for an industry neck-deep in cost rationalisations. Real estate bosses are playing it typically cool. While global lockdowns threaten office values and many rental payments will be missed, they’re still counting on global firms chasing trophy headquarters. The industry is also betting that being homebound has made people appreciate human interaction even more.
Nearby Credit Suisse is looking to sublet up to nine floors of its London base, according to a listing from broker CBRE. With headquarters just across the road, Morgan Stanley has hired broker Cushman & Wakefield to undertake a review of its entire London real estate footprint, said a person familiar with the matter.
Deutsche Bank, which has occupied about a dozen buildings mainly in the city in recent years, will be leaving most of those properties. The German lender will move into Land Securities’ new development at 21 Moorfields after it’s completed in 2021. The bank last year announced a strategy to shed hundreds of billions of dollars of unwanted assets and cut as many as 18,000 jobs.
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