Relax, London: Brexit Will Cost 25,000 Jobs Max, And That’s Nothing
Brexit is not going to be nearly as bad for the Central London office market as people feared.
That is the analysis of research firm Green Street Advisers in a report on the sector published earlier this month.
Green Street was already one of the more bullish analysts when it came to the impact of Brexit on London, and it has become even more optimistic as the process has unfolded.
In its Central London Office Update it cut the number of financial service jobs it thought London would lose from 40,000 to 20,000-25,000. This is based on the fact that job relocations announced so far amount to about 5,000 by the end of 2019.
The total number of jobs lost from financial services would mean about 2M SF of net office absorption lost for London over a period of seven years, Green Street said.
This is manageable because demand in other sectors like technology is still growing, and net new supply is at about long-term averages.
“A broad range of reasons explain London's popularity with growing industries,” Green Street said. “The combination of English language/law, cultural depth and diversity, strong infrastructure, business-friendly environment and deep pool of talent is unmatched by rival European cities.
“Technology and creative firms have firmly committed to London. And despite major banks' strong rhetoric in moving jobs to European cities, they have continued leasing properties in London.”
The City and Canary Wharf will see vacancy rates increase because that is where the jobs that do go are centralised. They will rise from the current 5.8% and peak at 8.6% in 2020, according to GreenStreet estimates.