HSBC’s decision to base its retail banking headquarters in Birmingham could be the first of a string of major relocations out of London prompted by new banking rules.
The bank is in advanced talks to lease 210,000 sq ft at Arena Central Development’s 1.5m sq ft Arena Central scheme to house its newly ringfenced retail operation.
The 2013 Financial Services (Banking Reform) Act requires all banks to set up separate legal entities for their retail banking operations which are individually capitalised and with different management.
The rules are designed to make it easier for the Bank of England to protect consumer deposits in the event of bank failure, but one effect of the new regime has been to prompt banks to consider splitting their physical estates into multiple locations to take advantage of the lower rents and employment costs in the regions.
Around 1,000 HSBC staff are expected to move into the new facility in 2017, many of whom will be relocated from the bank’s headquarters at 8 Canada Square in Canary Wharf, E14.
Wouter Schuitemaker, investment director at Business Birmingham, played a key role in the HSBC talks over the past year. He said: “There is evidence that there is a very strong possibility that we will see further such relocations out of London to Birmingham.”
Ian Martin, former regional head of property finance at Lloyds TSB and now director of Marlborough Property Company, added: “In terms of other banks making such a move, Lloyds hasn’t got that requirement to physically split, but Barclays does.”
lisa.pilkington@estatesgazette.com
