Although the global economic crisis has pushed down bank take-up of office in the first half-year by 53%, compared to the first half of '08, the rate of decline has slowed markedly. Whereas previously London saw the biggest drop in activity in the six months to end 1Q09, the UK capital has remained relatively healthy and was the most active European market in 3Q09. Prime office rents are widely accepted to have bottomed out and, with an increasingly limited supply of new available space, banks have begun to react to attractive terms to consolidate operations into one building or upgrade accommodation quality.

With rents in all other major European financial cities yet to bottom out, the trend in London is not likely to spread across the continent until the latter half of 2010 at least, Savills says. With banking take-up subdued in markets such as Paris--where only 1,000 square meters of such deals was transacted in 2Q09--pent-up demand for space is likely to drive take-up much higher once economic conditions become more favourable and banks have clarity over their future.

Cushman & Wakefield's EMEA head Guy Douetil says, "After 12 months of darkness with almost no take-up from the banks, we are beginning to see some light at the end of the tunnel. Banks are now beginning to make major decisions where significant opportunities exist to consolidate or save money in their headquarters locations. London has been the first to benefit and we expect other Western European capitals to follow in 2010."