Deloitte Real Estate's comprehensive study of office occupation over a ten year period from 2004-2014 shows that financial firms now occupy 31% of all office space across central London. This represents the largest share among eight business sectors which include legal, TMT (Technology, Media and Telecoms) and professional to name a few.
The impact of the financial crisis on banks was felt far and wide, many being forced to deal with massive structural and cultural change. As a result, real estate became an issue of importance, as underused and vacant leased space had grown. Our data shows banks have since recorded a reduction in overall floorspace occupied.
In contrast, although still directly exposed to the economic crash, insurance businesses were cushioned from some of the heftier blows dealt to the wider financial sector. As such, they have slowly been increasing their office base within central London, their share rising by 12% since 2004. Additional research shows that with the building of the two City towers (20 Fenchurch Street and The Leadenhall Building), the EC3 postcode has further consolidated its location as the insurance capital, as insurers have taken up the majority of this new space to date.
New offices, new talent
Our recent London Office Crane Survey highlights that of the three million sq ft of space leased in new buildings under construction across London, insurance firms accounted for almost one million sq ft (equivalent to two Gherkins). The insurance sector is still a growing part of London's financial sector, but with unemployment falling and the battle for talent intensifying, it is now facing the need to adapt its image as it competes for staff. As our recent Talent in Insurance research shows, potential employees are interested in the quality of the broader working environment, and not just the financial package on offer.
Real estate can help meet this challenge by providing attractive workplaces that suit expectations of the next generation of employees – a theme that The London Business Footprint series will cover in more depth later in the year.
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