The European banking sector is gaining strength based on high levels of office leasing activity in the past year, according to a report from commercial real-estate brokers Cushman & Wakefield.

During the period April 2010 to March 2011, take-up of office space by banks across Europe has been 20% above the five-year average. The major banking centres of London, Paris and Frankfurt continue to dominate, accounting for just over 55% of total banking office leasing in Europe over the past year.

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Office leasing was particularly strong in the cities of Warsaw and Prague. Warsaw, which is establishing itself as the regional banking hub for central and eastern Europe, saw take-up soar almost 63% higher than the five-year average.

Matthew Knight, associate at Cushman & Wakefield, said: “The European banking sector is continuing its recovery with a marked improvement in sentiment in the occupational office market. However, banks still face significant uncertainty deriving from a number of issues. Possible restructuring of sovereign debt in Greece will have significant knock-on effects for banks in the country, as well as international banks exposed to Greece, notably German banks with nearly €20bn exposure.”