Banks are betting big on the regions and reshaping the UK’s economic landscape

By BCO Scotland committee chair Peter Kerr:

A quiet revolution is underway in the UK’s office market, and it’s happening outside of London. From Glasgow to Birmingham, major banks are doubling down on their presence in regional cities. This, in turn, is driving up demand for premium sustainable office space in the regions.

According to Savills, the banking sector is already recording its highest regional take-up since 2018, marking a significant shift in geography. A further wave of activity is predicted, driven by 1.8m sq ft of leases expiring in the sector due across the Big Six regional markets by 2030. This trend also stretches beyond the banking sector, with recent findings from CBRE showing that availability in the regional markets decreased by 3% in the second quarter of this year.

Occupiers aren’t just looking for any space. They want grade-A, BCO-compliant buildings that tick all the boxes: ESG compliance, tech-enabled infrastructure, wellness features and proximity to talent. Glasgow, Manchester and Birmingham are emerging as prime targets, offering lower costs, strong transport links and growing innovation hubs.

This shift in demand is reshaping how developers, investors and local authorities think about office-led regeneration. More than just places to work, offices have a vital role to play as anchors for wider urban renewal. When designed well and integrated with transport and public realm improvements, they can unlock stalled developments, attract complementary uses such as retail and leisure and boost civic pride.

This aligns with both national and devolved government strategies. The UK’s “Plan for Change” aims to relocate 12,000 civil service roles from London by 2030, with new campuses planned in Aberdeen and Manchester. These moves are expected to generate £729m in local economic benefits and release 3.5m sq ft of London office space. Meanwhile, the Scottish Government’s National Planning Framework 4 emphasises sustainable, high-quality work environments that support local economies.

Capital attracts capital. The benefits of the presence of JP Morgan’s 270,000 sq ft tech hub in Glasgow and HSBC’s headquarters at 1 Centenary Square in Birmingham, housing 2,500 staff, will go far beyond providing custom for local shops and businesses.

Barclays’ £500m campus on Glasgow’s riverside is a case in point. The BCO Award-winning workplace now houses more than 5,000 employees and has helped catalyse regeneration in the surrounding area. It also demonstrates how large occupiers can integrate social value commitments into their developments. Barclays’ partnership with local employability programmes reflects the office’s role as a wider community asset.

Indeed, major office developments often trigger improvements in public transport, public realm and local services. In line with BCO guidance, the integration of active travel routes and public transport is now a baseline expectation for attracting leading occupiers.

Offices can also help to anchor mixed-use regeneration, integrating retail, leisure and civic uses into business districts. This is demonstrated in Glasgow’s International Financial Services District and Edinburgh’s Haymarket regeneration, where office-led schemes have catalysed broader urban renewal.

Public sector pre-letting is likewise proving to be a powerful tool for growth. It can de-risk speculative developments and encourage clustering, drawing in private sector occupiers. This dynamic is already playing out in cities such as Leeds and Newcastle, where civil service relocations have boosted demand and viability.

Of course, challenges remain. Hybrid working is now the norm and civil service headcount reductions could dampen long-term demand. But the shortage of premium ESG-certified space in regional markets means that the best buildings will continue to attract tenants.

For landlords and developers, regional cities are no longer secondary markets. These locations are central to the UK’s economic future. Unlocking their full potential will require coordinated planning policy, infrastructure investment and occupier incentives. If all of this can come together, we have the opportunity to create thriving, inclusive business districts that support long-term growth.

Banks are investing, occupiers are expanding and cities are responding. If we get this right, regional office markets will not only thrive but help rebalance the UK’s economic map, one building at a time.

Photo credit: Material Source.