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New research from commercial real estate and investment management firm, JLL, has found that UK Financial Services firms are fuelling commercial property growth in regional cities by relocating parts of their operations to locations outside London.
Over the last decade, the banking and finance sector has accounted for more than 440,720 sq. ft of new office space across Glasgow, Leeds, Bristol, Manchester, Edinburgh and Birmingham in terms of inward investment deals. This was more space than manufacturing sector (238,822) and service industry (224,813), although still less than TMT and flexible office space.
Manchester has attracted the largest square footage of inward investment from financial institutions between 2015 and 2024 (153,830 sq. ft), followed closely by Birmingham (133,587 sq. ft). Edinburgh came in third with 121,400 sq. ft of inward investment. Business development, customer support, sales, IT, technology and HR roles are amongst the functions firms are moving out of London to these cities.
Jonathan Steel, Managing Director, Financial Services at JLL said: “London is a global financial hub and remains the premier location for front-office talent, but major institutions are increasingly seizing the opportunity to redeploy functions such as IT, marketing or legal to other parts of the country in order to use their existing office footprint more efficiently.”
JLL’s data highlights a clear economic incentive for this migration, with operational costs in regional cities proving 20-40 per cent lower than in the capital. This substantial difference enables financial institutions to optimise expenditure and is directly translating into increased demand for regional office space.
Expansion in Manchester includes Vanguard (2024) and Starling Bafocusingnk (2023). Notable deals in Birmingham include HSBC (2014), Deutsche Bank (2013), and Goldman Sachs (2022).
London remains a key hub for client facing staff, following a broader trend across EMEA towards front office talent expansion in prime urban areas. According to JLL’s Future of Work survey, 55 per cent of financial services organisations intend to invest more in key CBD locations by 2030, whilst 70 per cent anticipate their total headcount will increase over the next five years.
Steel continued: “Firms are taking advantage of the market to adapt how they deploy their London offices, focussing on ensuring the right people are in London. Global investment banks are allocating significant capital to multi-year programs aimed at creating exceptional trading and corporate banking workplaces in London and other major financial hubs, with a focus on improving the office experience and creating high-quality spaces to host clients.”
