Brexit

Brexit may spur an exodus from London offices, survey finds

Brexit could force businesses to leave London
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Brexit could force businesses to leave London

London's office buildings may become a lot less crowded if the U.K. votes to exit the European Union in its referendum Thursday, a new survey found.

A survey of corporate occupiers found that nearly half expected to review their U.K. business space in both the short- and long-term in the event of a "leave" vote, global property agent JLL said Wednesday.

"A third believed it will reduce leasing activity in the short-term and lead to reduced headcount in the longer term," JLL said in a statement. "Only around one in five think it will have no impact on strategy in the short term, a figure that falls to 13 percent in the longer term."

The survey included 31 occupier respondents, which included major international companies and some of the country's "most significant institutional investors," JLL said, adding that 41 out of 53 property investors surveyed believed London offices were the most vulnerable.

The London office market was seen as the most likely to be affected "by far," as the financial services market is the "most immediately vulnerable" to a Brexit, JLL said.

"The most obvious issue is the potential withdrawal of 'passporting' rights allowing [financial service companies] to offer services throughout the EU from London," JLL said.

Britons will head to the polls on Thursday, June 23, to determine the future of the U.K. within the 28-member trade bloc. A telephone poll conducted by Survation for IG on Monday showed the remain and leave camps were neck-and-neck, compared with a series of weekend polls that suggested momentum tilted in favor of the remain campaign.

The results of JLL's survey jibed with previous comments from large global investment banks.


Photographer | Collection | Getty Images

Earlier this month, the Guardian reported that Citi's U.K. head, James Bardrick, told staff a so-called Brexit might impact the business.

The EU guarantees the free movement of labor, goods and services between its 28 member countries. Bardrick cited the U.K.'s links to the EU single market as one reason for having operations in London, the report said.

"To continue to serve our clients and maintain efficient access to those markets currently enabled through the EU passporting regime, we would likely need to rebalance our operations across the EU," Bardrick said in an email, according to the Guardian.

Citigroup's main U.K. office is in Canary Wharf in London, but it also has offices in Derby in England, Belfast in Northern Island and Edinburgh and Glasgow in Scotland. The U.K. is the headquarters of Citi's Europe, the Middle East and Africa operations.

The bank employs more than 9,000 in the U.K., according to the Guardian.

London is home to 729,600 financial services professionals, a number that is 14.7 percent above the low seen in 2010, according to a survey conducted in October last year by industry body TheCityUK. Across the U.K., this number climbed to 2.2 million employed in financial and related professional services.

Other big global banks appeared to be on the same page as Citigroup.

Recently, JPMorgan chief Jamie Dimon said the bank may cut up to 4,000 U.K. jobs, or as much as 25 percent of its staff there, if the U.K. decided to leave. He said Brexit would be a "terrible deal" for the U.K. economy.

—Katy Barnato and Spriha Srivastava contributed to this story