Banks Get Serious About Moving Jobs to Frankfurt on BrexitBy
Realtor says some lenders have already reserved space in city
Frankfurt has lower cost-of-living than other European cities
International banks are getting serious about moving staff to Frankfurt after last year’s Brexit vote spurred competition among European cities to lure jobs away from London.
“Nothing concrete happened last year, but that all changed in the first quarter of this year,” said Carsten Ape, head of office leasing for Germany at U.S. property broker CBRE Group Inc. “Banks are now looking in earnest at specific locations.”
The uncertainty triggered by Britain’s decision to leave the European Union has prompted banks to consider setting up new hubs in the EU to secure continued access to the bloc. Goldman Sachs Group Inc. and Citigroup Inc. are considering choosing Frankfurt as their EU base, people with knowledge of the situation said in January.
Part of Frankfurt’s appeal is that it’s the cheapest major financial center in the European Union to live and work, according to property broker Savills Plc. The combined annual cost of renting an apartment and the per-employee office space expense totaled just under 30,000 euros ($33,000) in the German city, less than half that of Paris.
“There won’t be enough for everyone,” said Juergen Schmid, who leads Savills’ property-investment business in Frankfurt. “That will in turn increase the demand for offices in less attractive locations, and the rent that can be charged for them.”
Frankfurt, Dublin and Madrid are among European cities that are jockeying for position as banks consider where to establish a base on the continent. JPMorgan Chase & Co. is scouting for office space in both Frankfurt and Dublin, people with knowledge of the matter said in March, while Standard Chartered Plc and Barclays Plc are also considering the Irish capital.
As many as 4,000 London jobs at Deutsche Bank AG could be at risk of being moved to other locations as the U.K. leaves the EU, the German lender’s chief regulatory officer said on Wednesday in Frankfurt. The U.K. capital could lose 10,000 banking jobs and 20,000 financial-services positions, according to the Bruegel think tank.
In Frankfurt, many prospective tenants from the financial-services industry are looking for large, well-designed buildings in prime locations, Ape said. Benjamin Remy, who’s responsible for Savills’ office-leasing business in Frankfurt, has also seen a pick-up in demand.
“Some large banks have actually reserved some office space already,” said Stephan Braeuning, head of office letting at Colliers International Group Inc.’s Frankfurt branch. “Nothing’s been signed yet, though.”