Commercial property growth in regional cities driven by financial services firms

Commercial property markets in regional UK cities are seeing significant growth as major financial institutions rethink their office strategies to focus on high-value client interactions in London while relocating support functions elsewhere. New research from JLL suggests that financial services firms have accounted for more than 440,000 square feet of inward investment in office space across Glasgow, Leeds, Bristol, Manchester, Edinburgh and Birmingham over the last decade. This is more than the space acquired by manufacturing (238,822 sq. ft) and service industries (224,813 sq. ft), though still behind technology, media and telecoms (TMT) and flexible workspace sectors.

Manchester attracted the most investment from financial services companies between 2015 and 2024, with 153,830 square feet of office space, followed by Birmingham (133,587 sq. ft) and Edinburgh (121,400 sq. ft). Many firms are relocating functions such as IT, HR, sales, customer support, and business development to these cities as part of broader real estate strategies.

According to Jonathan Steel, Managing Director, Financial Services at JLL, this trend reflects a drive to use office space more efficiently. “London is a global financial hub and remains the premier location for front-office talent,” he said. “But major institutions are increasingly seizing the opportunity to redeploy functions such as IT, marketing or legal to other parts of the country.”

The research suggests operational costs in regional cities are typically 20 to 40 percent lower than in the capital, offering a clear economic incentive. Notable recent expansions include Vanguard’s move to Manchester in 2024 and Starling Bank’s relocation in 2023. Earlier moves include HSBC in Birmingham (2014), Deutsche Bank (2013) and Goldman Sachs (2022).

While regional growth continues, investment in London remains strong. JLL’s Future of Work survey indicates that 55 percent of financial services organisations plan to increase investment in central business district locations by 2030. Seventy percent expect overall headcount to grow in the next five years.

“Firms are taking advantage of the market to adapt how they deploy their London offices, focussing on ensuring the right people are in London,” Steel said. He added that many global institutions are investing heavily in multi-year programmes to create high-quality workplaces designed to support corporate banking and trading, with an emphasis on hosting clients and enhancing the office experience.